ETF Education Report: ISHARES MSCI PERU AND GLOBAL EXPOSURE ETF (EPU)

What this ETF is trying to do

The ISHARES MSCI PERU AND GLOBAL EXPOSURE ETF (ticker: EPU) is an exchange-traded fund that focuses on companies related to Peru and global exposure. It holds a variety of different companies in its portfolio.

What the numbers show

The current price of EPU is $91.18. To understand how the value has changed, we can look at different timeframes:

• Year-to-Date (YTD): The share-price return is approximately 26.03%. The total return (which includes distributions) is approximately 28.07%.

• One Year: The share-price return is approximately 45.40%. The total return is approximately 48.37%.

• Three Years: The share-price return is approximately 212.69%. The total return is approximately 250.79%.

An estimated price from roughly one year ago was $62.71. This shows that the share price has grown significantly over the last 12 months.

Income and distribution explanation

Some investors look for "distributions," which are cash payments made by the ETF. EPU has a distribution yield of approximately 1.87%. Over the last 12 months, the trailing distributions were approximately $1.71 per share. The data shows that these payments happen irregularly or less frequently, with two payouts recorded in the last year.

It is important to remember that a distribution yield is not the same as total return. Total return tells you the full picture of how much value was gained, including both price changes and cash payments.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases over time. Some investors worry about this because they want to keep their original investment amount stable. For EPU, the erosion-risk score is 100, and the label indicates "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag.

Top Holdings

The following are the top holdings in this ETF (note that this list is partial):

• CREDICORP LTD: 23.91%

• SOUTHERN COPPER CORP: 22.33%

• COMPANIA DE MINAS BUENAVENTURA SAA ADR: 4.04%

• HOCHSCHILD MINING PLC: 3.80%

• VOLCAN COMPANIA MINERA SAA PARTICIPATING PREFERRED: 3.21%

• INTERCORP FINANCIAL SERVICES INC: 3.15%

• PARQUE ARAUCO SA: 2.92%

• FERREYCORP SAA: 2.88%

• SOCIEDAD MINERA CERRO VERDE SAA: 2.75%

• INTERCONEXION ELECTRICA SA ESP: 2.74%

Pros

• The ETF has shown strong positive price returns over the one-year and three-year periods.

• The total return is higher than the price return, meaning distributions added value.

Cons

• Distributions are irregular and do not happen on a set schedule.

Beginner takeaway

When looking at EPU, it is helpful to distinguish between the share-price return (how much the price went up) and the total return (the price increase plus any cash paid out). This ETF has shown significant growth in its share price over the last few years and currently shows no signs of price erosion.