ETF Education Report: Ellsworth Growth and Income Fund Ltd (ECF-P-A)

What this ETF is trying to do

The Ellsworth Growth and Income Fund Ltd (ECF-P-A) is an Exchange Traded Fund (ETF). Based on its name, it focuses on a combination of growth and providing income to its investors.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price changes and any cash distributions (dividends) paid out.

For ECF-P-A, the numbers show different results depending on how you look at them:

• Year-to-Date (YTD): The price return is approximately -11.81%, while the total return is approximately -7.48%.

• One Year: The price return is approximately -13.90%, while the total return is approximately -8.30%.

• Three Years: The price return is approximately -14.26%, but the total return is positive at approximately 2.67%.

To visualize the price change, the estimated price from roughly one year ago was $21.86. The current price is $18.82.

Income and distribution explanation

This ETF has a distribution yield of approximately 6.97%. This means the fund has paid out cash distributions relative to its current price. Over the last 12 months, it made four distributions. These payments usually happen on Thursdays.

It is important to remember that a high distribution yield does not mean you are earning that same amount as your total return. Total return is the most complete way to see how the investment performed overall.

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 share price does not always mean the NAV is dropping, we use an "erosion score" 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 is not a "severe erosion-risk flag."

Pros

• The fund provides a distribution yield of approximately 6.97%.

• Over a three-year period, the total return was positive at approximately 2.67%, even though the share price itself declined.

Cons

• The one-year and year-to-date price returns have been negative.

• The fund shows "mild price erosion" according to its erosion score.

Beginner takeaway

When looking at funds like ECF-P-A, always look at the total return rather than just the price or just the yield. The total return shows you the full picture by combining share price changes and cash payments. High yields can look attractive, but they should always be compared to the share price movement to understand the actual performance.