ETF Education Report: MFS High Yield Municipal Trust (CMU)

What this ETF is trying to do

MFS High Yield Municipal Trust (CMU) is an ETF traded on the NYSE. While the specific investment strategy is not detailed in the provided data, the name suggests it focuses on high-yield municipal bonds.

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and the cash distributions paid out to investors.

Here is what the data shows for CMU:

• Year-to-Date (YTD): The price return is approximately -4.27%. However, the YTD total return is 0.52%. This means that even though the share price dropped, the total return was positive because of distributions.

• One-Year: The one-year price return was approximately 0.60%. The one-year total return was much higher at approximately 9.28%.

• Three-Year: The three-year price return was approximately 7.69%, while the three-year total return was approximately 28.42%.

To look at the price movement, we can use an estimated price from roughly one year ago, which was $3.34. The current price is $3.36.

Income and distribution explanation

This ETF has a distribution yield of approximately 8.46%. This number describes the cash distributions relative to the ETF's price. The fund usually pays out distributions monthly, with 13 distributions recorded over the last 12 months. Most of these payments occurred on Tuesdays.

It is important to remember that a high distribution yield does not mean an investor earned that exact percentage as their total return. Distributions provide cash income, but they do not guarantee that your original investment (your principal) will stay the same value.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly over time. If an ETF's share price falls drastically, it can sometimes be a sign of erosion.

For CMU, the erosion-risk score is 100, and the label is "No price erosion detected." The erosion severity is listed as "good," and there is no severe erosion-risk flag.

Pros

• The fund has provided a positive total return over the last year and three years.

• It offers a high distribution yield for investors seeking regular cash payments.

Cons

• The year-to-date price return is negative, meaning the share price has declined recently.

• There is no data provided regarding specific top holdings to show what the fund owns.

Beginner takeaway

When looking at ETFs like CMU, always look at the total return rather than just the price return or the yield. A high yield can look attractive, but if the share price is falling quickly, it can impact your overall investment. In this case, the total return has remained positive even when the price return was negative.