Share-split context: A reverse split was recorded on Sep 9, 2024 with coefficient 0.166667. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: abrdn Asia-Pacific Income Fund Inc (FAX)

What this ETF is trying to do

The abrdn Asia-Pacific Income Fund Inc (ticker: FAX) is an exchange-traded fund (ETF) listed on the AMEX. Based on its name, this fund focuses on providing income from assets within the Asia-Pacific region.

What the numbers show

When looking at an ETF, it is important to separate "price return" from "total return." Price return only tracks how the share price changes. Total return includes both the price change and any cash distributions paid out to investors.

Because this ETF has a history of reverse splits, we use split-adjusted returns to see how the value has changed. A reverse split is when multiple old shares are combined into fewer new shares, which causes the price per share to rise mechanically.

Here is how the performance looks:

• Year-to-Date (YTD): The price return is approximately -16.62%. However, the YTD total return is approximately -7.97%.

• One-Year: The price return is approximately -19.05%, while the one-year total return is approximately -7.73%.

• Three-Year: The price return is approximately -13.70%, but the three-year total return is approximately 26.05%.

• Five-Year: The five-year total return is approximately -9.07%.

Income and distribution explanation

This ETF has a high distribution yield of approximately 15.36%. This means the fund pays out a large amount of cash relative to its share price. These distributions usually happen monthly, with Friday being the most common day for payments. Over the last 12 months, there were 12 payouts totaling approximately $1.97 per share.

It is important to remember that a high distribution yield does not guarantee an investor will earn that same percentage as a total return.

NAV erosion explanation

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

This ETF has an erosion score of 55, which is labeled as "moderate price erosion." While there is no severe erosion-risk flag present, the data shows moderate risk regarding how the share price has moved.

Pros

• The fund offers a high distribution yield of approximately 15.36%.

• It provides regular monthly income.

• The three-year total return has been positive at approximately 26.05%.

Cons

• The share price has seen declines (price returns) in the year-to-date, one-year, and three-year periods.

• There is a moderate erosion-risk score of 55.

• The five-year total return is negative at approximately -9.07%.

Beginner takeaway

When looking at high-income ETFs like FAX, it is vital to look at the total return, not just the distribution yield. A high yield can provide cash, but if the share price is falling significantly, it can impact the overall value of the investment. Always distinguish between the cash you receive and the change in the share price itself.