What this ETF is trying to do

The BondBloxx BBB Rated 1-5 Year Corporate Bond ETF (ticker: BBBS) is an exchange-traded fund. Based on its name, it focuses on corporate bonds that have a "BBB" rating and a timeframe of one to five years.

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 BBBS, the year-to-date (YTD) price return is approximately -3.46%. The one-year price return is approximately -3.72%.

• Total Return: This includes the share price change plus any cash distributions (dividends) paid out. The YTD total return is approximately -0.17%. However, the one-year total return is positive at approximately 0.78%.

To visualize the price change, you can look at the estimated price from roughly one year ago, which was $51.62. The current price is $49.70. If you had invested $10,000 based on that estimated price, the share value alone would have decreased due to the negative price return.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the distribution yield. For BBBS, the distribution yield is approximately 4.69%. This ETF usually pays out monthly, with 12 payments recorded over the last year.

It is important to remember that a high distribution yield is not the same as total return. While distributions provide cash, they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. StockValueFinder uses an erosion-risk score to measure this risk.

BBBS has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is described as "good," and there is no severe erosion-risk flag for this ETF. This suggests that the fund's value has not shown signs of significant deterioration according to these specific measurements.

Pros

• The ETF provides a distribution yield of approximately 4.69%.

• The one-year total return is positive (approximately 0.78%), even though the share price itself went down.

• The erosion-risk score suggests a stable trend.

Cons

• The share price has seen a decline, with a one-year price return of approximately -3.72%.

• The year-to-date total return is currently negative (approximately -0.17%).

Beginner takeaway

When studying BBBS, notice how the total return can be different from the price return. Even though the share price dropped over the last year, the total return was positive because of the cash distributions. Always look at both numbers to get a full picture of how an ETF is performing.