BETE: ProShares Bitcoin & Ether Equal Weight Strategy ETF

The ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE) is a crypto-related fund designed to provide exposure to Bitcoin and Ether. While it offers a high distribution yield, it has recently experienced a significant share-price decline.

What the Numbers Show

The current price of BETE is $40.10. Based on an estimated price from roughly one year ago of $81.91, the fund has seen a steep drop.

The performance data shows a difference between price return (the change in share price) and total return (which includes distributions):

• Year-to-Date: The price return is -12.84%, while the total return is -12.15%.

• One-Year: The price return is -51.04%, while the total return is -39.32%.

• Three-Year: The price return is -0.75%, while the total return is 92.28%.

Income and Distribution Explanation

BETE pays distributions usually every month. Over the last 12 months, it has made 12 payments totaling $11.27 per share. This results in a distribution yield of approximately 28.11%.

It is important for new investors to remember that a high distribution yield alone can be misleading. A fund can pay out a high percentage of cash while the actual share price is falling. In this case, the one-year total return (-39.32%) is lower than the distribution yield, meaning the cash payments did not offset the drop in share price over that period.

Price and NAV Erosion Explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, the data shows a "severe erosion-risk flag" is active. This was triggered because the fund has an erosion score of 10 and an erosion label of "Severe price erosion." This indicates that the share price has deteriorated substantially.

Pros

• High Cash Flow: The fund provides frequent monthly distributions and a high distribution yield.

• Long-term Total Return: The three-year total return is positive at 92.28%.

Cons

• Significant Price Drop: The share price has fallen over 51% in the last year.

• High Risk: The fund has a severe erosion-risk flag and an income rating grade of "F."

Beginner Takeaway

BETE is a high-income ETF that focuses on cryptocurrency. While it pays out a large amount of cash to investors, the share price has declined sharply over the past year. This highlights the risk that high distributions do not always guarantee the preservation of your original investment.