ETF Education Report: Eaton Vance Senior Floating-Rate Trust (EFR)

What this ETF is trying to do

EFR is an Exchange Traded Fund (ETF) traded on the NYSE. While the specific investment strategy isn't detailed in the data, it is categorized as an asset-type ETF.

What the numbers show

When looking at how this fund has performed, it is important to look at two different things: price return and total return.

• Price Return: This only measures how much the share price has changed.

• Total Return: This includes both the change in share price and the money paid out through distributions.

According to the data:

• Year-to-Date (YTD): The price return is approximately -7.00%. However, the total return is -1.31%.

• One Year: The price return was approximately -9.20%, while the total return was -1.50%.

• Three Years: The price return was approximately -12.87%. Interestingly, the three-year total return was 15.68%.

To visualize the price change, an investor's share price was estimated to be roughly $11.41 one year ago, compared to the current price of $10.36.

Income and distribution explanation

This ETF provides regular cash payments, known as distributions. The current distribution yield is approximately 8.49%. These payments usually happen monthly, with 12 distributions recorded over the last year.

It is important to remember that a high distribution yield does not mean you are earning that same amount in total return. As seen in the one-year data, even with an 8.49% yield, the total return was actually negative (-1.50%) because the share price dropped significantly.

NAV erosion explanation

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

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

Pros

• The fund has a history of providing regular monthly distributions.

• Over a three-year period, the total return (which includes distributions) was positive at 15.68%, even though the share price itself went down.

Cons

• The fund has experienced a share-price decline over the last year and the last three years.

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

Beginner takeaway

When looking at ETFs like EFR, don't look at the distribution yield alone. A high yield can sometimes hide a falling share price. Always compare the price return (the cost of the share) with the total return (the price change plus the cash you received) to get a clearer picture of how the investment has performed.