ETF Education Report: ELDRIDGE BBB-B CLO ETF (CLOZ)

What this ETF is trying to do

The ELDRIDGE BBB-B CLO ETF (ticker: CLOZ) is an exchange-traded fund listed on the NYSE. While specific holdings are not listed in this report, ETFs like this generally aim to provide exposure to specific types of debt investments.

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 measures how much the share price has gone up or down.

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

For CLOZ, the numbers show:

• Year-to-Date (YTD): The price return is approximately -0.57%, but the total return is approximately 4.11%.

• One Year: The price return is approximately -1.95%, while the total return is approximately 5.25%.

• Three Year: The price return is approximately 0.57%, while the total return is much higher at approximately 27.84%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was about $26.85. The current price is $26.33. This shows that while the share price has dipped slightly, the total return remains positive due to distributions.

Income and distribution explanation

This ETF provides regular cash payments, known as distributions. The distribution yield is approximately 7.10%. This means the amount of cash paid out is about 7.10% relative to the current share price. These payments usually happen monthly, with Tuesday being the most common day for distributions.

It is important to remember that a high distribution yield does not mean the investor earned that exact percentage as their total return. You must look at the "total return" figure to see how the price changes and distributions worked together.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. StockValueFinder uses an "erosion-risk score" to measure this risk.

CLOZ has an erosion 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. This suggests the fund's price movement is not currently showing signs of significant structural decay.

Pros

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

• It provides a regular monthly distribution yield of approximately 7.10%.

Cons

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

Beginner takeaway

For new investors, the main lesson here is to look beyond just the share price or just the dividend yield. While the share price of CLOZ has moved down slightly, the total return has been positive because of the cash distributions. Always check the total return to see the full picture of how an ETF is performing.