ETF Education Report: Invesco CurrencyShares Japanese Yen Trust (FXY)

What this ETF is trying to do

The Invesco CurrencyShares Japanese Yen Trust (FXY) is an exchange-traded fund (ETF). Based on its name, this fund is designed to track the value of the Japanese Yen. Instead of buying stocks in companies, this type of fund focuses on the movement of a specific currency.

What the numbers show

The current price of FXY is $57.63. To understand how the price has changed, we can look at its performance over different periods:

• Year-to-Date (YTD): The YTD price return is approximately -1.77%.

• One Year: The one-year price return is approximately -7.18%. We can estimate the price was roughly $62.09 about one year ago.

• Three Years: The three-year price return is approximately -10.16%.

It is important to note that "price return" only measures the change in the share price. In this specific case, the YTD total return and the one-year total return are also reported as -1.77% and -7.18%, respectively. Total return is a measure that includes both price changes and any distributions.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash, known as distributions. For FXY, the distribution yield is 0%. No distributions were detected over the last 12 months. This means the fund has not been providing cash income to shareholders during this period.

NAV erosion explanation

"NAV" stands for Net Asset Value, which is the actual value of the assets held by the fund. "NAV erosion" is a term used when the value of those underlying assets declines.

The StockValueFinder data shows an erosion-risk score of 75, which is labeled as "mild price erosion." This is an erosion-risk measurement rather than proof that the NAV has definitely collapsed. A mild erosion-risk score suggests there has been some price deterioration, but it does not trigger a severe erosion-risk flag.

Pros

• The fund provides a way to track the Japanese Yen through a single ticker on the NYSE.

• There is no reported "severe erosion-risk flag" for this ETF.

Cons

• The share price has experienced a decline over the last year and the last three years.

• The fund does not currently provide a distribution yield (income).

Beginner takeaway

When looking at an ETF like FXY, it is important to distinguish between price return and total return. Price return tells you how much the share price moved, while total return includes any cash paid out. Because this fund has a 0% distribution yield, the total return and the price return are the same in this instance. Always remember that a falling share price means the value of your investment in the fund is decreasing.