FMQQ: FMQQ THE NEXT FRONTIER INTERNET ETF

What this ETF is trying to do

FMQQ, known as the FMQQ THE NEXT FRONTIER INTERNET ETF, is an exchange-traded fund that focuses on the internet sector. It holds a variety of companies involved in digital services and technology. Based on its top holdings, the fund has exposure to companies like MercadoLibre Inc (7.72%), Nu Holdings Ltd (7.28%), and Sea Ltd ADR (7.01%). Because the holdings list provided is partial, these represent the largest companies in the fund rather than all of them. Please note that holdings can change over time.

What the numbers show

The performance of this ETF shows different results depending on how you measure it.

• Price Return: This measures only the change in the share price. The year-to-date (YTD) price return is -9.16%. Over the last year, the price return was -16.07%. However, looking back three years, the price return was positive at 22.69%.

• Total Return: This includes both price changes and distributions. The YTD total return is -9.16%. The one-year total return was -15.55%, which is slightly different from the price return. Over three years, the total return was 24.13%.

To give you an idea of price movement, the estimated price from roughly one year ago was $15.00, while the current price is $12.56.

Income and distribution explanation

This ETF provides a distribution yield of approximately 0.67%. The trailing distributions were $0.0846 per share. It is important to understand that a distribution yield is not the same as a total return. Distributions are cash payments, but they do not guarantee that your original investment will stay the same value. In this case, the distribution frequency is described as "irregular" or "less frequent," with only one payout recorded in the last 12 months.

NAV erosion explanation

Some investors look for "NAV erosion," which is when the Net Asset Value (the actual value of the fund's assets) decreases over time. The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Regarding price erosion, the fund has an erosion-risk score of 55, which is labeled as "moderate price erosion." This means the market price has shown some signs of declining. However, there is no "severe erosion-risk flag" for this ETF.

Pros

• The fund has shown a positive total return of 24.13% over a three-year period.

• It provides access to various international internet and technology companies.

Cons

• The fund has experienced a share-price decline over the last year (-16.07%).

• The five-year total return is -48.64%.

• The distribution yield is relatively low, and the payout frequency is irregular.

Beginner takeaway

When looking at FMQQ, it is important to distinguish between price return and total return. While the fund has seen significant growth over three years, it has faced share-price declines in the shorter term (one year and YTD). Additionally, while the fund pays distributions, the yield is low and does not happen on a regular schedule. Always remember that high yields or past performance do not guarantee future results.