ETF Education Report: FGSI

What this ETF is trying to do

The FT VEST Growth Strength & Target Income ETF (ticker: FGSI) is an exchange-traded fund listed on the NASDAQ. While the specific investment strategy isn't detailed in the data, the name suggests it focuses on growth and providing a target level of income to its investors.

What the numbers show

When looking at an ETF, it is important to understand 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 FGSI, the one-year price return was approximately -3.05%. This means the share price went down over the last year. However, the one-year total return was approximately 6.17%. This shows that when you include the distributions, the overall return was positive.

Year-to-date (YTD), the price return is approximately 1.27%, while the YTD total return is higher at approximately 7.84%. To give you an idea of the price movement, the current price is $20.36, while the estimated price from roughly one year ago was approximately $21.00.

Income and distribution explanation

This ETF has a distribution yield of approximately 9.05%. This number describes the cash distributions relative to the ETF's price. The fund has made 13 distributions over the last 12 months, and these usually happen on a monthly basis.

It is important to remember that a high distribution yield does not mean an investor earned that same percentage as their total return. Distributions provide cash income, but they are different from the overall growth of your investment.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes be related to erosion, they are not the same thing.

StockValueFinder uses an "erosion-risk score" to measure this risk. FGSI has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag for this ETF.

Pros

• The fund provides a high distribution yield of approximately 9.05%.

• The total return has been positive over the last year (6.17%), even though the share price declined.

• The erosion-risk measurements suggest the fund is currently stable.

Cons

• The one-year price return was negative (-3.05%), meaning the share price itself lost value over that period.

• The income rating grade is a "C."

Beginner takeaway

When looking at FGSI, it is helpful to distinguish between the share price and the total return. While the share price went down over the last year, the total return was positive because of the cash distributions. High yields can be attractive for income, but investors should always look at the total return to see how the investment is performing overall.