Understanding the EXG ETF

What this ETF is trying to do

The Eaton Vance Tax-Managed Global Diversified Equity Income Fund (ticker: EXG) is an ETF listed on the NYSE. While the specific investment strategy details are not provided in this report, the name suggests it focuses on global equity income.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return."

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

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

For EXG, the numbers show a difference between these two:

• Year-to-Date (YTD): The price return is approximately -0.10%, but the total return is 6.28%.

• One Year: The price return was about 6.13%, while the total return was much higher at 15.38%.

• Three Years: The price return was approximately 27.27%, and the total return was 66.27%.

To visualize the price change, we can look at an estimated example. The current price is $9.52. An estimated price from roughly one year ago was approximately $8.97.

Income and distribution explanation

This ETF is known for providing regular cash payments, called distributions. The distribution yield is approximately 8.28%. This means the amount of cash paid out is high relative to the ETF's price. These distributions usually happen monthly, with 12 payments recorded over the last year.

It is important to remember that a high distribution yield does not mean an investor earned that exact percentage as their total return. You must look at the "total return" figure to see how much value was actually created including those payments.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. Some investors worry that high payouts might cause this. However, for EXG, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this fund.

Pros

• The ETF has a high income rating of A+.

• The total returns over one, three, and five years have been positive.

Cons

• The year-to-date price return is currently slightly negative (-0.10%).

• The top holdings data was not supplied in this report, so the specific companies owned by the fund are unknown here.

Beginner takeaway

EXG focuses on providing regular income through monthly distributions. When studying this ETF, notice that the total return is significantly higher than the price return. This happens because the total return accounts for the cash distributions you receive, whereas the price return only tracks the movement of the share price.