What this ETF is trying to do

The BondBloxx BBB Rated 10+ Year Corporate Bond ETF (BBBL) is an exchange-traded fund. Based on its name, it focuses on corporate bonds that have a "BBB" rating and are long-term, meaning they have a maturity of 10 years or more.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This measures only the change in the share price. For BBBL, the one-year price return was approximately -12.34%. The year-to-date (YTD) price return was approximately -9.78%.

• Total Return: This includes the share price change plus any cash distributions paid out to investors. The one-year total return was approximately -7.19%, and the YTD total return was approximately -5.82%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $49.72, while the current price is $43.58.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash, known as distributions. BBBL has a distribution yield of approximately 6.21%. This means the cash paid out is about 6.21% of the current share price. These distributions usually happen monthly, with 12 payments recorded over the last year.

It is important to remember that a high distribution yield does not mean you are making a profit. As shown in the total return numbers above, even with cash payments, the overall value can still go down if the share price drops significantly.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. While a falling market price does not always mean the NAV has dropped, we use an "erosion-risk score" to measure this risk.

BBBL has an erosion score of 75, which is labeled as "mild price erosion." This indicates a mild level of risk regarding price deterioration.

Pros

• The ETF provides regular cash distributions, which occur most frequently on Mondays.

• The total return is higher than the price return, meaning the distributions helped offset some of the share-price decline.

Cons

• The ETF has experienced a share-price decline over the last year and year-to-date.

• The total return has been negative for both the one-year and year-to-date periods.

Beginner takeaway

When studying BBBL, remember that price and income are two different things. While the ETF pays a 6.21% distribution yield, the share price has fallen. Always look at the total return to see how both the price changes and the cash payments work together.