ETF Education Report: Calamos Convertible and High Income Fund (CHY)

What this ETF is trying to do

The Calamos Convertible and High Income Fund (CHY) is an ETF traded on the NASDAQ. While the specific investment strategy is not detailed in the provided data, the name suggests it focuses on convertible securities and generating income.

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. For CHY, the one-year price return was approximately 8.30%. The year-to-date (YTD) price return was approximately 9.64%.

• Total Return: This is a broader measure that includes both the share price changes and the distributions (cash payments) made to investors.

The total return numbers for CHY are higher than the price return numbers. For example, the one-year total return was approximately 19.51%, while the price return for that same period was 8.30%. Over three years, the total return was approximately 49.73%, compared to a price return of approximately 9.73%.

Based on an estimated price from roughly one year ago of $11.45, the current price is $12.40.

Income and distribution explanation

This ETF focuses on providing cash to investors. The distribution yield is approximately 9.68%. This means the amount of cash distributed is quite high relative to the ETF's price. These distributions usually happen monthly, with Friday being the most common day for payments. In the last 12 months, there were 12 distributions totaling $1.20 per share.

It is important to remember that a high distribution yield does not guarantee the same level of total return. Investors should always look at the total return to see how the fund performed overall.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases over time. StockValueFinder uses an "erosion-risk score" to help monitor this. For CHY, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The fund has shown positive price returns over the one-year, three-year, and year-to-date periods.

• The total returns are significantly higher than the price returns, reflecting the impact of distributions.

• The erosion-risk measurement is rated as "good."

Cons

• High distribution yields can sometimes be misleading if the share price is not stable, though this specific fund has shown positive price growth.

• No top holdings were provided in the current data to show exactly where the money is invested.

Beginner takeaway

CHY is an ETF that provides both share-price growth and regular cash distributions. When studying this fund, notice how the total return is much higher than the price return; this happens because the total return accounts for the cash paid out to investors. Always distinguish between the price of a share and the total value an investor receives.