What this ETF is trying to do

The FIRST TRUST SSI STRATEGIC CONVERTIBLE SECURITIES ETF (ticker: FCVT) is an exchange-traded fund (ETF). Based on its name, this fund focuses on convertible securities. These are types of investments that can be changed into shares of a company's stock.

What the numbers show

To understand how this ETF has performed, we look at two different types of measurements: price return and total return.

Price Return measures only the change in the share price. For example:

• The year-to-date (YTD) price return is 13.77%.

• The one-year price return is 11.56%.

• The three-year price return is 59.82%.

Total Return measures the overall return, which includes both the share-price change and any distributions (like cash payments) the fund paid out. For example:

• The YTD total return is 14.72%.

• The one-year total return is 12.88%.

• The three-year total return is 68.25%.

The current price of the ETF is $48.96. The estimated price from roughly one year ago was $43.89. Over a five-year period, the total return was 29.52%.

Income and distribution explanation

This ETF provides distributions to investors. The distribution yield is 1.12%. This means that for every dollar the ETF costs, it pays out about 1.12% in cash distributions.

The fund usually pays these distributions on a monthly basis. Over the last 12 months, there were 12 payouts, with a trailing distribution of $0.55 per share. It is important to remember that while these distributions provide cash income, they do not guarantee that the original money invested will stay the same. A high distribution yield does not automatically mean an investor earned that full amount as a total return.

NAV erosion explanation

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

For FCVT, the erosion score is 100, and the label states "No price erosion detected." Additionally, there is no severe erosion-risk flag for this ETF. This suggests that the fund has not shown signs of significant value loss in its underlying assets based on these specific measurements.

Pros

• The ETF has shown positive price returns over one year, three years, and five years.

• There is no detected price erosion, which indicates the underlying value of the holdings has remained stable according to the erosion score.

• It provides regular monthly distributions for investors seeking income.

Cons

• Distributions are not a guarantee that the principal (the original amount invested) will be preserved.

• Total returns and price returns differ, which is important for investors to track when looking at how their money is growing versus how much cash they are receiving.

Beginner takeaway

The FIRST TRUST SSI STRATEGIC CONVERTIBLE SECURITIES ETF has shown positive growth in both its share price and its total return over the last three years. It provides a monthly distribution yield of 1.12%. While it offers regular income, investors should remember that distributions do not guarantee that the share price will stay the same or that the original investment value will be protected.