ETF Education Report: ARMG

What this ETF is trying to do

The LEVERAGE SHARES 2X LONG ARM DAILY ETF (ARMG) is a type of investment called a leveraged ETF. This means it is designed to move in a specific direction relative to its target. It is not an "inverse" ETF, which means it does not move in the opposite direction; instead, it seeks to amplify certain movements.

What the numbers show

The current price of ARMG is $22.84. To understand how the price has changed, we can look at an estimated price from roughly one year ago, which was approximately $12.69.

Here is how the performance looks based on the data:

• Year-to-Date (YTD) Price Return: The share price has increased by approximately 300.70%.

• Year-to-Date (YTD) Total Return: The total return is also approximately 300.70%.

• One-Year Price Return: The share price increased by approximately 80.05% over the last year.

• One-Year Total Return: The total return for the last year was approximately 88.56%.

Note that "price return" only tracks the change in the share price, while "total return" includes the impact of distributions. In this case, the total return is higher than the price return over the last year.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. ARMG has a distribution yield of approximately 1.21%. This number describes the cash distributions relative to the ETF's price. The data shows that distributions for this fund are irregular or happen less frequently, with one payout recorded in the last 12 months.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases significantly over time. StockValueFinder uses an "erosion-risk score" to measure this risk. For ARMG, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF has shown significant positive price returns both year-to-date and over the last year.

• The erosion-risk measurement is rated as "good."

Cons

• This is a leveraged ETF, which means it can be more volatile than standard funds.

• The distribution frequency is irregular.

Top Holdings

The following is the top holding for this ETF (holdings can change over time):

• FIRST AMERICAN TREASURY OBLIGS X: 10.09%

Beginner takeaway

When looking at ETFs like ARMG, it is important to distinguish between price return and total return. While the share price has grown significantly, leveraged funds behave differently than traditional investments. Additionally, while distributions provide cash, a high yield alone does not tell the whole story of how an investment is performing.