What this ETF is trying to do

The Global X Investment Grade Corporate Bond ETF (GXIG) is an exchange-traded fund that focuses on corporate bonds. These are essentially loans made to companies that have a high ability to pay back their debt.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return."

• Price Return: This measures only the change in the share price. For GXIG, the year-to-date (YTD) price return is approximately -5.99%. The one-year price return is approximately -7.98%.

• Total Return: This includes the share price change plus any cash distributions paid out to investors. The YTD total return is approximately -2.88%, and the one-year total return is approximately -2.10%.

Because the total return numbers are higher than the price return numbers, it shows that the cash distributions helped offset some of the share-price decline.

To give you an idea of price movement, the estimated price from roughly one year ago was $25.82. The current price is $23.76.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 6.58%. This means the amount of cash paid out is about 6.58% relative to the current ETF price. These payments usually happen monthly, with 12 distributions recorded over the last year.

It is important to remember that a high distribution yield does not mean you are earning that full amount as your total return. You must always look at the "total return" to see how the investment performed overall.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value, which is 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.

StockValueFinder uses an "erosion-risk score" to measure this risk. GXIG has an erosion score of 75, which is labeled as "mild price erosion." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF provides regular cash distributions (usually monthly).

• The total return is higher than the price return, meaning distributions are helping to cushion the impact of falling share prices.

Cons

• The ETF has experienced a share-price decline over the last year.

• The YTD and one-year total returns are both negative.

Beginner takeaway

When looking at an ETF like GXIG, don't just look at the distribution yield. While a 6.58% yield provides cash, the share price has been falling. Always compare the price return (the cost of the shares) with the total return (the price change plus the cash you received) to get the full picture of how the investment has performed.