Understanding the BlackRock Short-Term California Muni Bond ETF (CALI)

What this ETF is trying to do

The BlackRock Short-Term California Muni Bond ETF (ticker: CALI) is an exchange-traded fund. While the specific holdings are not listed in this report, this type of ETF generally focuses on municipal bonds from California that have short-term maturities.

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 only tracks how much the share price itself has changed.

• Total Return: This includes both the change in share price and the money paid out to investors through distributions.

For CALI, the numbers show a difference between these two:

• Year-to-Date (YTD): The price return is approximately -1.32%, but the total return is approximately 0.48%.

• One Year: The price return was approximately -1.52%, while the total return was approximately 0.96%.

• Three Year: The price return was approximately 0.12%, while the total return was approximately 8.82%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $50.56. The current price is $49.80. This shows that while the share price has gone down slightly, the total return (which includes distributions) has remained positive.

Income and distribution explanation

This ETF provides cash to investors through distributions. The distribution yield is approximately 2.52%. These payments usually happen monthly, with the most recent trailing distributions totaling about $1.26 per share.

It is important to remember that a distribution yield tells you how much cash was paid out relative to the price, but it is not the same thing as your 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). A falling share price does not always mean NAV erosion is happening.

In this case, the fund has an erosion-risk score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The fund has a history of positive total returns over the one-year and three-year periods.

• It provides regular monthly distributions.

• The erosion-risk measurements suggest the fund is currently stable.

Cons

• The share price (price return) has shown slight declines over the last year and year-to-date.

Beginner takeaway

When looking at CALI, notice that the share price has moved down slightly, but the total return is positive. This happens because the cash distributions help make up for the drop in share price. Always look at "total return" to see the full picture of how an investment has performed.