Understanding the AMAX ETF

What this ETF is trying to do

The Adaptive Hedged Multi-Asset Income ETF (ticker: AMAX) is an exchange-traded fund listed on the NYSE. While the specific investment strategy isn't detailed in the data, its name suggests it focuses on providing income through a variety of different assets.

What the numbers show

When looking at an ETF, it is important to separate "price return" from "total return."

• Price Return: This only tracks how much the share price itself has changed. For AMAX, the one-year price return was approximately -6.51%, and the year-to-date (YTD) price return was approximately -2.74%.

• Total Return: This includes both the price changes and the cash distributions paid out to investors. Because of the cash payments, the total return numbers are higher than the price returns. For example, the one-year total return was approximately 4.69%, and the YTD total return was approximately 5.36%. Over three years, the total return was approximately 35.48%.

To visualize the price change: an investor's share price was estimated to be roughly $8.22 one year ago, and the current price is $7.68.

Income and distribution explanation

This ETF focuses on providing cash to investors. The distribution yield is approximately 11.61%. This means the amount of cash paid out is quite high relative to the ETF's price. These payments usually happen monthly, with Thursday being the most common day for distributions. Over the last 12 months, the total trailing distributions were approximately $0.89 per share.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. StockValueFinder uses an "erosion-risk score" to measure this risk. AMAX has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and does not mean the fund's value has definitely collapsed, but it suggests there has been some decline in share price.

Pros

• The ETF provides a high distribution yield of approximately 11.61%.

• The total return over three years has been positive at approximately 35.48%.

Cons

• The share price has seen a decline, with a one-year price return of approximately -6.51%.

• There is a "mild" erosion-risk score of 75.

Beginner takeaway

When looking at ETFs like AMAX, remember that a high distribution yield does not mean the investor's total value is growing at that same rate. Always look at the total return to see how much you actually earned after including both price changes and cash payments. High income is one part of the picture, but the declining share price is another important part to watch.