ETF Education Report: Carlyle Credit Income Fund (CCIF)

What this ETF is trying to do

The Carlyle Credit Income Fund (CCIF) is an exchange-traded fund (ETF) listed on the NYSE. While the specific investment strategy is not detailed in the data, the fund focuses on providing regular cash distributions to its investors.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For CCIF, the share price has declined significantly. The year-to-date (YTD) price return is approximately -51.17%. Over the last year, the one-year price return was approximately -58.59%. Looking further back, the three-year price return was approximately -71.16%.

• Total Return: This includes both the price changes and the cash distributions. The YTD total return is approximately -40.72%. The one-year total return was approximately -46.48%, and the three-year total return was approximately -47.97%.

To visualize the price change, an investor's $10,000 investment in share price alone would have been worth approximately $5,530.00 one year ago, compared to the current price of $2.29 per share.

Income and distribution explanation

CCIF has a very high distribution yield of approximately 41.27%. This means the fund pays out a large amount of cash relative to its share price. These distributions usually happen monthly, with Tuesday being the most common day for payments.

It is important to remember that a high distribution yield does not mean the investor earned that percentage as a total return. While these payments provide cash income, they do not guarantee that the value of your original investment will stay the same.

NAV erosion explanation

This ETF has a severe erosion-risk flag. This means that StockValueFinder's screening rules detected significant price deterioration. The fund has an erosion-risk score of 10, which is labeled as "Severe price erosion."

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). While a falling market price is a "share-price decline," the severe erosion score and flag serve as warnings regarding the stability of the fund's value.

Pros

• The fund provides a high distribution yield, which can provide regular cash income.

• Distributions are frequent, occurring usually on a monthly basis.

Cons

• The fund shows significant share-price declines over the one-year and three-year periods.

• There is a severe erosion-risk flag and a high erosion-risk score.

• The total return has been negative over the one-year, three-year, and five-year periods.

Beginner takeaway

High yields can be tempting, but they can also be misleading. In the case of CCIF, the high distribution yield has occurred alongside a significant decline in share price. When evaluating an ETF, always look at the total return rather than just the yield to see how much value is actually being gained or lost.