ETF Education Report: FM COMPOUNDERS EQUITY ETF (FMCE)

What this ETF is trying to do

The FM COMPOUNDERS EQUITY ETF (ticker: FMCE) is an exchange-traded fund listed on the NYSE. An ETF is a basket of different investments bundled together into one single product. This specific fund holds 31 different assets. Based on its top holdings, it includes a mix of large companies and government money market funds.

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 only measures how much the share price itself has changed.

• Total Return: This includes both the change in share price *and* any cash distributions (dividends) paid out to investors.

For FMCE, the numbers show:

• Year-to-Date (YTD): The price return is approximately 10.31%, while the total return is approximately 10.45%.

• One-Year: The price return was approximately 7.07%, while the total return was approximately 10.36%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $27.06. The current price is $28.98.

Income and distribution explanation

Some investors look for "yield," which is the cash an ETF pays out. FMCE has a distribution yield of approximately 2.80%. Over the last 12 months, it made two distributions totaling approximately $0.81 per share. The data shows these payments happen on an irregular or less frequent basis, often appearing on Tuesdays or Wednesdays.

It is important to remember that a distribution yield is not the same as total return. While distributions provide cash, they are separate from the growth of the share price.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases significantly over time. StockValueFinder uses an "erosion-risk score" to help monitor this. For FMCE, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in this fund (note that this list is partial):

• GOLDMAN SACHS FS GOVERNMENT INSTL (13.67%)

• INTEL CORP (5.45%)

• MICROSOFT CORP (5.42%)

• KKR & CO INC ORDINARY SHARES (5.22%)

• AMAZON.COM INC (4.55%)

• GE AEROSPACE (4.45%)

• HONEYWELL INTERNATIONAL INC (4.44%)

• VISA INC CLASS A (4.28%)

• BERKSHIRE HATHAWAY INC CLASS B (4.02%)

• SALESFORCE INC (3.32%)

*Holdings can change over time.*

Pros

• The fund has shown positive price returns and total returns over the last year.

• It currently shows no detected price erosion.

Cons

• Distributions are irregular and do not happen on a set schedule.

Beginner takeaway

When studying FMCE, notice the difference between its price return and its total return. The total return is higher because it accounts for the cash distributions paid to shareholders. Always remember that while dividends provide income, they are different from the growth of the share price itself.