ETF Education Report: Brown Advisory Flexible Equity ETF (BAFE)

What this ETF is trying to do

The Brown Advisory Flexible Equity ETF (ticker: BAFE) is an exchange-traded fund. An ETF is a way to invest in many different companies at once through a single share. This specific fund holds 45 different companies.

What the numbers show

The current price of one share is $30.22. Looking back at the past year, we can see how the price has moved:

• Price Return: The one-year price return was approximately 11.97%. This number only tracks how much the share price itself changed.

• Total Return: The one-year total return was approximately 12.30%. Total return is a more complete number because it includes both the price change and any cash distributions paid out.

• Year-to-Date (YTD): So far this year, the YTD price return and total return are both approximately 10.62%.

To give you an idea of the price movement, the estimated price from roughly one year ago was about $26.99.

Income and distribution explanation

Some investors look for "distributions," which are cash payments made by the ETF. BAFE has a distribution yield of approximately 0.27%. This means the cash paid out is small compared to the share price. The fund has a distribution frequency described as "irregular" or "less frequent," 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 a fund decreases significantly over time. It is important for investors to watch this because if the value of the fund's holdings drops, it can affect the share price. For BAFE, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the largest companies held by this fund (note that this is a partial list):

• Taiwan Semiconductor Manufacturing Co Ltd ADR: 7.59%

• Microsoft Corp: 6.27%

• Meta Platforms Inc Class A: 4.66%

• Amazon.com Inc: 4.48%

• Visa Inc Class A: 4.20%

• Alphabet Inc Class A: 3.84%

• Nvidia Corp: 3.76%

• Mastercard Inc Class A: 3.73%

• Alphabet Inc Class C: 3.65%

• Berkshire Hathaway Inc Class B: 3.09%

Pros

• The fund has shown positive price returns over the last year.

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

Cons

• The distribution yield is relatively low.

• The fund's distributions are irregular rather than happening on a set schedule.

Beginner takeaway

When looking at an ETF like BAFE, it is helpful to look at both the price return and the total return. The total return gives you a better picture of how much value was actually created, including cash payments. Also, always remember that while distributions provide cash, they are different from the growth of the share price itself.