ETF Education Report: Hartford Dynamic Bond ETF (DYNB)

What this ETF is trying to do

The Hartford Dynamic Bond ETF (ticker: DYNB) is an exchange-traded fund listed on the NASDAQ. While the specific investment strategy is not detailed in the provided data, it is classified as an ETF and is not a leveraged or inverse fund.

What the numbers show

When looking at an ETF, 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 any cash distributions paid out to investors.

Based on the data provided:

• Year-to-Date (YTD): The price return is approximately -5.27%. However, the YTD total return is approximately -2.46%.

• One-Year Performance: The one-year price return is approximately -5.87%. The one-year total return is approximately -2.08%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $40.02, and the current price is $37.67. This shows a decline in the share price over that period.

Income and distribution explanation

Some investors look at ETFs for regular cash payments, known as distributions. This ETF has a distribution yield of approximately 4.13%. The trailing distributions are approximately $1.56 per share. These payments usually happen monthly, with 12 payments recorded over the last year.

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" figure to see how the share price and distributions worked together.

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 not the same thing as NAV erosion, we use "erosion scores" to measure risk.

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

Pros

• The ETF provides regular cash distributions, which occur usually on a monthly basis.

Cons

• The ETF has experienced both share-price declines and negative total returns over the last year.

• The erosion-risk score indicates "mild price erosion."

Beginner takeaway

When studying an ETF like DYNB, always distinguish between the share price and the total return. A falling share price can be partially offset by cash distributions, which is why the total return figure is often different from the price return figure. Additionally, keep in mind that a distribution yield tells you about cash payments, but it does not guarantee that the value of your original investment will stay the same.