ETF Education Report: Eagle Capital Growth Fund Inc (GRF)

What this ETF is trying to do

Eagle Capital Growth Fund Inc (ticker: GRF) is an Exchange Traded Fund (ETF). While the specific investment goal isn't listed in the data, ETFs are tools used to hold various assets. This specific fund is not a leveraged or inverse fund, meaning it does not use borrowed money to multiply returns or bet against the market.

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 tracks how the share price moves.

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

For GRF, the numbers show different results depending on how you look at them:

• Year-to-Date (YTD): The price return is approximately -4.95%. The total return is also approximately -4.95%.

• One Year: The price return was a decline of about -4.09%. However, the total return was positive at approximately 3.99%. This shows that even though the share price went down, the total value was helped by distributions.

• Three Year: The price return was approximately 17.31%, while the total return was much higher at approximately 41.32%.

Based on an estimated price from roughly one year ago of $10.60, the current price is $10.17.

Income and distribution explanation

This ETF has a distribution yield of approximately 8.36%. This number describes the cash distributions relative to the ETF's price. The trailing distributions over the last year were $0.85.

It is important to remember that a high distribution yield does not mean an investor earned that same percentage as their total return. Also, the frequency of these payments is listed as "irregular" or "less frequent."

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 related to erosion, they are not the same thing.

For GRF, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The fund has shown a strong three-year total return of approximately 41.32%.

• The fund has a solid income rating grade of "B."

Cons

• The one-year price return has been negative.

• Distributions are irregular rather than being paid on a steady, predictable schedule.

Beginner takeaway

When looking at GRF, notice the gap between the price return and the total return. For example, over one year, the share price dropped, but the total return was positive because of the cash distributions. Always look at both numbers to see the full picture of how an ETF is performing.