ETF Report: Dimensional Global Credit ETF (DGCB)

What this ETF is trying to do

The Dimensional Global Credit ETF (DGCB) is an exchange-traded fund listed on the NASDAQ. While specific details about its exact strategy are not provided in this data, it is categorized as an ETF.

What the numbers show

The current price of DGCB is $51.96. To understand how the price has moved, we can look at its "price return," which only tracks the change in the share price.

• Year-to-Date (YTD) Price Return: The share price has dropped by approximately 4.19% so far this year.

• One-Year Price Return: Over the last year, the share price decreased by approximately 6.50%.

It is also helpful to look at "total return." Total return is different because it includes both the price changes and the money paid out to investors through distributions.

• YTD Total Return: This is approximately -1.58%.

• One-Year Total Return: This is approximately -1.22%.

Because the total return numbers are higher (less negative) than the price return numbers, it shows that the distributions helped offset some of the share-price decline.

Income and distribution explanation

Some investors look at ETFs for regular cash payments, known as distributions. DGCB has a distribution yield of approximately 5.76%. This number describes the cash distributions relative to the ETF's price. In the last 12 months, there were 7 distributions, which usually happen on a quarterly basis.

It is important to remember that a high distribution yield does not mean an investor earned that percentage as their total return. You must look at the total return to see the full picture of how the investment performed.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund declines. While a falling market price is not the same thing as NAV erosion, we use "erosion-risk scores" to measure this risk.

DGCB has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and is not a guarantee that the fund's value has collapsed. There is no "severe erosion-risk flag" for this ETF.

Pros

• The ETF provides a distribution yield of approximately 5.76%.

• The total return is higher than the price return, meaning distributions are helping to cushion the share-price decline.

Cons

• The ETF has experienced a share-price decline over the last year.

• The erosion score indicates "mild price erosion."

Beginner takeaway

When looking at an ETF like DGCB, it is important to distinguish between the share price and the total return. While the share price has gone down, the cash distributions have helped improve the overall total return. Always remember that high yields can exist even when the share price is falling.