ETF Education Report: NESTYIELD DYNAMIC INCOME ETF (EGGY)

What this ETF is trying to do

The NESTYIELD DYNAMIC INCOME ETF (EGGY) is an exchange-traded fund listed on the NYSE. Based on its name and data, it focuses on providing income to investors. It holds a variety of different assets, including stocks from companies like Seagate Technology Holdings PLC and Bloom Energy Corp Class A.

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. For EGGY, the one-year price return was approximately -13.79%. This means the cost of a single share dropped over the last year. The current price is $35.52, while the estimated price from roughly one year ago was approximately $41.20.

• Total Return: This measures the share price change *plus* any cash distributions received. Even though the share price went down over the last year, the one-year total return was approximately 18.73%. This shows that the cash paid out helped offset the drop in share price.

Year-to-date (YTD), the price return is approximately 1.31%, while the YTD total return is much higher at approximately 27.45%.

Income and distribution explanation

EGGY has a high distribution yield of approximately 32.56%. This number describes the cash distributions relative to the ETF's price. The fund usually pays out money monthly, with 12 payouts recorded over the last year.

It is very important to remember that a high distribution yield does not mean an investor earned that same percentage as their total return. While these payments provide cash income, they are separate from the movement of the share price.

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. EGGY has an erosion score of 75, which is labeled as "mild price erosion." While the share price has declined, there is no severe erosion-risk flag present for this ETF.

Pros

• The fund provides a high distribution yield, which can provide regular cash income.

• The total return has been positive over the last year, even though the share price fell.

Cons

• The share price has experienced a decline (a negative price return).

• There is a "mild" erosion-risk score, meaning the price has shown some downward movement.

Beginner takeaway

High yields can be exciting, but they can also be misleading. An investor should always look at both the price return (how much the share price moves) and the total return (the full picture including cash payments). In the case of EGGY, the total return was positive because the distributions helped make up for the falling share price.

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*Disclaimer: This report is for educational purposes only. It does not provide financial advice and does not recommend buying, selling, or holding any security.*