Understanding the PACER Aristotle Pacific Floating Rate High Income ETF (FLRT)

What this ETF is trying to do

The PACER Aristotle Pacific Floating Rate High Income ETF (ticker: FLRT) is an exchange-traded fund listed on the NYSE. While specific holdings are not listed in this report, the fund's name suggests it focuses on providing high income through floating-rate assets in the Pacific region.

What the numbers show

When looking at an ETF, it is important to understand the difference between price return and total return.

• Price Return only tracks how much the share price itself has changed.

• Total Return includes both the change in share price and the money paid out through distributions.

For FLRT, the numbers show a difference between these two:

• Year-to-Date (YTD): The price return is approximately -1.20%, but the total return is +3.48%.

• One Year: The price return is approximately -1.67%, while the total return is +5.09%.

• Three Years: The price return is approximately -0.38%, but the total return is +24.20%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $47.36. The current price is $46.57. This shows that while the share price has gone down slightly, the total return (which includes dividends) has been positive.

Income and distribution explanation

This ETF is designed to provide cash to investors. The distribution yield is approximately 7.25%. This number describes the cash distributions relative to the ETF's price.

The fund typically pays out money monthly, with a count of 13 distributions over the last 12 months. Most of these payments have occurred on Thursdays. It is important to remember that a high distribution yield does not mean the investor earned that exact percentage as their total return; you must look at the "total return" figure to see the full picture.

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 a sign of erosion, it is not proof of it.

StockValueFinder uses an erosion-risk score to measure this risk. FLRT has an erosion score of 94, which is labeled as "Stable / sideways" with a "good" severity rating. There is no severe erosion-risk flag for this ETF.

Pros

• Positive Total Returns: Even when the share price has dipped, the total return (including distributions) has been positive over the one-year and three-year periods.

• Consistent Income: The fund has a history of frequent distributions.

Cons

• Price Fluctuations: The share price has seen slight declines over the one-year and three-year periods.

• Yield vs. Price: Investors should be aware that the share price can decline even while the fund is paying out a high yield.

Beginner takeaway

For new investors, the most important lesson here is to look at total return rather than just the share price or the yield alone. FLRT's share price has moved down slightly, but because it pays out regular distributions, its total return has remained positive over the last three years. Always remember that a high yield is not a guarantee of profit.