Understanding the Frontier Asset Core Bond ETF (FCBD)

What this ETF is trying to do

The Frontier Asset Core Bond ETF, known by its ticker symbol FCBD, is an exchange-traded fund (ETF) that focuses on bonds. Based on its top holdings, the fund invests in various types of bond funds, including intermediate-term Treasury ETFs and floating rate Treasury ETFs.

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 FCBD, the year-to-date (YTD) price return is approximately -3.67%. The one-year price return is approximately -4.23%.

• Total Return: This includes the share price change plus any cash distributions paid out to investors. The YTD total return is approximately -1.17%, and the one-year total return is approximately -0.29%.

Because the total return numbers are higher than the price return numbers, it shows that the cash distributions helped offset some of the share-price decline.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $25.64. The current price is $24.56.

Income and distribution explanation

This ETF provides cash to investors through distributions. The current distribution yield is approximately 4.16%. This number describes the cash paid out relative to the current ETF price. Over the last 12 months, the trailing distributions were approximately $1.02 per share. These payments usually happen quarterly.

It is important to remember that a high distribution yield does not mean an investor earned 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. While a falling market price can sometimes look like erosion, they are not the same thing.

For FCBD, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present. This suggests that the fund's price movement is currently considered stable by these specific risk measurements.

Top Holdings

The fund holds 7 total holdings. The top holdings include:

• Vanguard Intmdt-Term Trs ETF (24.40%)

• TCW Flexible Income ETF (23.99%)

• JPMorgan Core Plus Bond ETF (18.04%)

• WisdomTree Floating Rate Treasury ETF (10.10%)

• Regan Floating Rate MBS ETF (10.09%)

• JPMorgan Ultra-Short Income ETF (6.59%)

• iShares Investment Grade Systmtc Bd ETF (5.19%)

*Note: Holdings can change over time.*

Pros

• The fund provides regular cash distributions (usually quarterly).

• The erosion-risk measurements suggest a stable price trend.

Cons

• Both the YTD and one-year price returns have been negative.

• The total return has also been negative over the last year.

Beginner takeaway

When looking at bond ETFs like FCBD, remember that there is a difference between the share price and the total return. While the share price may go down, the cash distributions (yield) can help improve the total return. Always look at the total return to see the full picture of how the investment performed.