ETF Education Report: VANECK DIGITAL TRANSFORMATION ETF (DAPP)

What this ETF is trying to do

The VANECK DIGITAL TRANSFORMATION ETF (ticker: DAPP) is an exchange-traded fund that focuses on companies involved in digital transformation. Based on its top holdings, the fund includes companies like Block Inc Class A and Bitmine Immersion Technologies Inc. These holdings represent a portion of the fund's total portfolio, which contains 20 different companies. Please remember that holdings can change over time.

What the numbers show

The current price of one share is $17.82. When looking at how the price has moved over different periods, we see very different results:

• Year-to-Date (YTD): The price return is approximately 7.80%.

• One Year: The one-year price return was a decline of approximately 30.96%. To help visualize this, the estimated price from roughly one year ago was $25.81.

• Three Year: The three-year price return was a significant increase of approximately 232.46%.

• Five Year: The five-year total return was a decline of approximately 20.12%.

It is important to note that "price return" only tracks the change in the share price. When total return data is provided, it includes other factors like distributions. For this ETF, the YTD and one-year total returns match the price returns exactly.

Income and distribution explanation

Some investors look for ETFs that pay them regular cash, known as distributions. This ETF has a distribution yield of 0%. No distributions have been detected in the last 12 months. Because there are no payouts, this fund is not currently providing cash income to investors.

NAV erosion explanation

"NAV erosion" is a term used to describe a decline in the value of the fund's underlying assets. StockValueFinder uses an "erosion-risk score" to measure this risk.

This ETF has an erosion score of 30, which is labeled as "Significant price erosion." Because of the split-adjusted price trends and this score, the fund has triggered a severe erosion-risk flag. This is a warning measurement regarding price deterioration; it does not mean the fund's value has definitely collapsed, but it indicates a high level of risk regarding price stability.

Pros

• The fund has shown very strong three-year total returns of approximately 245.13%.

• The year-to-date price return is currently positive at approximately 7.80%.

Cons

• The fund has a severe erosion-risk flag.

• There has been a significant one-year price decline of approximately 30.96%.

• The fund does not currently provide any cash distributions or income.

Beginner takeaway

When looking at an ETF like DAPP, it is important to look at more than just one time period. While the three-year returns have been very high, the one-year performance and the severe erosion-risk flag suggest that the share price has experienced significant downward movement recently. Always remember that a high return in the past does not guarantee what will happen in the future.