Understanding the iShares MSCI Indonesia ETF (EIDO)

What this ETF is trying to do

The iShares MSCI Indonesia ETF (ticker: EIDO) is an exchange-traded fund designed to provide exposure to the Indonesian market. It is categorized as a standard ETF, meaning it is not leveraged or inverse.

What the numbers show

The data shows that EIDO has experienced a significant decline in its share price over various timeframes.

• Year-to-Date (YTD): The price return is approximately -36.42%.

• One Year: The price return is approximately -32.63%.

• Three Years: The price return is approximately -45.56%.

It is important to distinguish between price return and total return. Price return only tracks the change in the share price. Total return includes both the price change and any distributions (cash payments) received.

For EIDO, the total returns are slightly higher than the price returns because they include distributions. For example, the one-year total return is approximately -30.76%, while the one-year price return is -32.63%. Over three years, the total return was approximately -39.10%, compared to a price return of -45.56%.

Based on estimated data, the price roughly one year ago was $17.65, compared to the current price of $11.89.

Income and distribution explanation

EIDO provides cash distributions to investors. The trailing distributions are approximately $0.41 per share, resulting in a distribution yield of approximately 3.44%.

The frequency of these payments is described as "irregular" or "less frequent," with three payouts recorded over the last 12 months. While distributions provide cash income, they are not a guarantee of overall profit, especially when the share price is declining.

NAV erosion explanation

This ETF has a severe erosion-risk flag. This means that StockValueFinder's screening rules detected substantial price deterioration. The fund has an erosion score of 30, which is labeled as "significant price erosion."

It is important to understand the difference between price erosion and NAV erosion. Price erosion refers to the falling market price of the ETF shares. NAV (Net Asset Value) erosion refers to a decline in the actual value of the underlying assets. The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Pros

• Provides a way to invest in the Indonesian market through a single ticker.

• Offers a distribution yield of approximately 3.44%.

Cons

• The ETF has shown significant share-price declines over the last year and three years.

• There is a severe erosion-risk flag due to significant price deterioration.

• The distribution frequency is irregular.

Beginner takeaway

When researching EIDO, it is important to look at both the distribution yield and the total return. While the ETF pays out cash, the share price has declined significantly over the past year and three years. The "severe erosion-risk flag" serves as a warning that the share price has dropped substantially. Always remember that a high distribution yield does not make up for a falling share price; you must look at the total return to see the full picture.