ETF Education Report: Herzfeld Credit Income Fund Inc (CUBA)

What this ETF is trying to do

Herzfeld Credit Income Fund Inc (ticker: CUBA) is an exchange-traded fund (ETF) listed on the NASDAQ. While the specific investment strategy is not detailed in the provided data, the fund's name suggests it focuses on credit and income.

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 price changes and the money paid out through distributions.

• Year-to-Date (YTD): The YTD price return is approximately 7.92%. However, the YTD total return is higher at approximately 18.16%.

• One Year: The one-year price return is approximately 8.39%. The one-year total return is much higher at approximately 30.49%. To see how the price changed, we can look at an estimated price from roughly one year ago, which was approximately $2.32. The current price is $2.52.

• Three Years: Over the last three years, the price return was -37.00%. The three-year total return was 4.40%.

Income and distribution explanation

This ETF has a distribution yield of approximately 18.45%. This number describes the cash distributions relative to the current ETF price. Over the last 12 months, the trailing distributions totaled $0.465 per share. The data shows that these distributions happen on an irregular or less frequent basis, with a payout count of 2 in the last year.

It is important to remember that a high distribution yield does not mean an investor earned that same 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. While a falling market price is a "share-price decline," it does not automatically prove that the Net Asset Value (NAV) has declined.

In this specific case, there is no severe erosion-risk flag. The erosion score is not available because the fund has a history of stock splits.

Pros

• The one-year total return is positive at approximately 30.49%.

• The fund offers a high distribution yield of approximately 18.45%.

Cons

• The three-year price return shows a significant decline of -37.00%.

• Distributions are irregular and less frequent.

Beginner takeaway

When looking at ETFs like CUBA, always look at the "total return" rather than just the "price return." The total return gives a better picture of how much money was actually made when you include the cash distributions. Also, be careful with high yields; a very high distribution yield can exist even if the share price is changing.