What this ETF is trying to do

The Invesco BulletShares 2030 Municipal Bond ETF (BSMU) is an exchange-traded fund. Based on its name, it focuses on municipal bonds that are set to mature around the year 2030.

What the numbers show

When looking at an ETF, it is important to understand the difference between price return and total return. Price return only tracks how much the share price moves. Total return includes both the price movement and any cash payments (distributions) made to investors.

Here is what the data shows for BSMU:

• Year-to-Date (YTD): The price return is approximately -4.95%. However, the total return is -2.91%.

• One Year: The price return was approximately -4.54%, while the total return was approximately -1.84%.

• Three Years: The price return was approximately 0.65%, but the total return was much higher at approximately 9.67%.

• Five Years: The five-year total return was approximately -5.62%.

To visualize the price change, the estimated price from roughly one year ago was $21.93. The current price is $20.93.

Income and distribution explanation

This ETF provides cash payments to investors, known as distributions. The distribution yield is approximately 2.92%. This number describes the cash payments relative to the current ETF price.

The data shows that BSMU usually pays out monthly, with 12 payments made over the last year. Most of these payments occurred on Mondays. While these distributions provide cash income, they are not the same as total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the value of the fund's underlying assets. It is important to remember that a falling share price does not always mean the NAV is eroding.

For BSMU, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• Total Return vs. Price Return: In the three-year period, the total return (9.67%) was significantly higher than the price return (0.65%), showing that distributions added value to the overall return.

• Regular Income: The fund has a history of monthly distributions.

Cons

• Recent Price Declines: Both the year-to-date and one-year price returns have been negative.

• Negative Long-term Total Return: The five-year total return is currently negative.

Beginner takeaway

When studying BSMU, remember that the share price and the total return tell different stories. The share price has been falling recently, but the total return is often higher because of the cash distributions paid out to investors. Always look at both numbers to get a full picture of how an ETF is performing.