ETF Education Report: WisdomTree Enhanced Commodity Strategy Fund (GCC)

What this ETF is trying to do

The WisdomTree Enhanced Commodity Strategy Fund (ticker: GCC) is an exchange-traded fund (ETF). While the specific strategy details are not listed, the fund holds assets like treasury-related products. Based on its name, it focuses on commodity strategies.

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 measures only the change in the share price.

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

For GCC, the numbers show growth over different time periods:

• Year-to-Date (YTD): The price return is approximately 25.77%. In this case, the total return is also approximately 25.77%.

• One Year: The price return was approximately 23.05%, while the total return was higher at approximately 31.46%.

• Three Years: The price return was approximately 53.49%, while the total return was approximately 75.97%.

To give you an idea of price movement, the estimated price from roughly one year ago was $21.62. The current price is $26.60.

Income and distribution explanation

Some investors look for "income," which is cash paid out by the ETF. GCC has a distribution yield of approximately 5.28%. This means the cash distributions are about 5.28% of the current share price. Over the last 12 months, the trailing distributions were approximately $1.40 per share. These payments happened on an irregular schedule, with two payments made in the last year.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF steadily declines. It is important to note that a falling share price does not always mean NAV erosion is happening.

For this fund, the erosion-risk score is 100, and the label states "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag.

Top Holdings

The fund's holdings can change over time. As of the latest update, the top holdings are:

• WisdomTree Floating Rate Treasury ETF (USFR): 4.53%

• BNY Dreyfus Treasury Oblgtons Csh Mgmt Ins (DTRXX): 0.61%

Pros

• The fund has shown positive price returns over the one-year and three-year periods.

• The total return is higher than the price return, meaning distributions have added value to the overall performance.

• The erosion-risk measurements are positive.

Cons

• Distributions are described as "irregular" or "less frequent," meaning they do not arrive on a predictable schedule.

Beginner takeaway

When studying GCC, notice the difference between the share price and the total return. The total return is higher because it accounts for the cash distributions paid to investors. Always remember that a high distribution yield provides cash, but it is separate from the growth of the share price itself.