ETF Education Report: The Future Fund Long/Short ETF (FFLS)

What this ETF is trying to do

The Future Fund Long/Short ETF (FFLS) is an exchange-traded fund listed on the NYSE. Based on its name and holdings, it seeks to invest in various companies. Its top holdings include a US Dollar Broker (46.71%), Amazon.com Inc (5.09%), Alphabet Inc Class A (3.70%), and NVIDIA Corp (3.65%). Please note that these are "Top Holdings" and the full list is not shown here. Holdings can change over time.

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.

• Total Return: This includes the change in share price plus any cash distributions (dividends) paid out.

For FFLS, the numbers show different results depending on the time frame:

• Year-to-Date (YTD): The YTD price return is approximately 0.44%. For this specific period, the total return is also 0.44%.

• One Year: The one-year price return was approximately -8.85%. However, the one-year total return was approximately -2.85%. This shows that while the share price dropped significantly, the total return was slightly higher because of distributions.

• Three Year: The three-year price return was approximately 19.57%, while the three-year total return was approximately 31.68%.

An estimated price from roughly one year ago for this ETF was $25.58. The current price is $23.32.

Income and distribution explanation

This ETF has a distribution yield of approximately 6.55%. This number describes the cash distributions relative to the ETF price. It is important to remember that a high distribution yield does not mean an investor earned that same percentage as their total return.

The trailing distributions were $1.53. The distribution frequency is described as "irregular" or "less frequent," with one payout recorded in the last 12 months.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of an ETF's underlying assets declines. While a falling market price does not always mean the NAV has declined, we use an "erosion-risk score" to measure this risk.

FFLS has an erosion score of 75, which is labeled as "mild price erosion." This is considered a mild level of risk, and there is no severe erosion-risk flag present for this ETF.

Pros

• The three-year total return has been positive at approximately 31.68%.

• The ETF provides a distribution yield of approximately 6.55%.

Cons

• The one-year price return has been negative at approximately -8.85%.

• The distribution frequency is irregular rather than regular.

Beginner takeaway

When looking at FFLS, it is helpful to distinguish between the share price and the total return. While the share price may go down, distributions can affect the overall total return. Additionally, always look at the erosion-risk score to understand how much the price has fluctuated over time. High yields can be helpful for income, but they do not guarantee that the share price will stay stable.