ETF Education Report: Blackstone Long-Short Credit Income Fund (BGX)

What this ETF is trying to do

The Blackstone Long-Short Credit Income Fund (BGX) is an ETF listed on the NYSE. While the specific investment strategy details are not provided in this report, the fund's name suggests it focuses on credit income through long and short positions.

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.

• Total Return: This includes both the share price changes and any cash distributions (dividends) paid out.

For BGX, the numbers show different results depending on how you measure them:

• Year-to-Date (YTD): The price return is approximately -9.43%, while the total return is approximately -4.01%.

• One Year: The price return was approximately -11.56%, while the total return was approximately -3.45%.

• Three Years: The price return was approximately -6.96%, but the total return was a positive 22.97%.

To visualize the price change, if you had bought one share at the estimated price from roughly one year ago ($11.94), that single share would be worth $10.56 today.

Income and distribution explanation

This ETF has a distribution yield of approximately 9.22%. This means the fund pays out a significant amount of cash relative to its share price. These distributions usually happen monthly, with the most common payout day being Tuesday. Over the last 12 months, there were 12 distributions totaling approximately $0.97 per share.

It is important to remember that a high distribution yield does not guarantee an investor will earn that same percentage as a total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes look like erosion, they are not always the same thing.

StockValueFinder uses an "erosion-risk score" to measure this risk. BGX has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and not a definitive proof that the fund's value has collapsed. There is no severe erosion-risk flag for this ETF.

Pros

• The fund provides a high distribution yield of approximately 9.22%.

• Over a three-year period, the total return was positive at approximately 22.97%.

Cons

• The share price has seen declines over the last year and year-to-date.

• There is a "mild" erosion-risk score of 75.

Beginner takeaway

When looking at BGX, notice that the total return is higher than the price return. This happens because the cash distributions help offset some of the share-price declines. However, high yields can sometimes be accompanied by falling share prices, so it is important to look at both the income and the price movement together.