ETF Education Report: HARTFORD MUNICIPAL OPPORTUNITIES ETF (HMOP)

What this ETF is trying to do

The HARTFORD MUNICIPAL OPPORTUNITIES ETF (ticker: HMOP) is an exchange-traded fund listed on the NYSE. While specific holdings are not listed in this report, ETFs like this generally aim to provide investors with exposure to municipal opportunities.

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and the money paid out to investors through distributions.

Based on the data provided:

• Year-to-Date (YTD): The price return is approximately -5.40%. However, the total return is -2.88%.

• One Year: The price return was approximately -5.08%, while the total return was -1.67%.

• Three Year: The price return was approximately 1.07%, but the total return was much higher at approximately 11.89%.

To visualize the price change, an investor's share price was estimated to be roughly $39.00 one year ago, compared to the current price of $37.00.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 3.71%. These payments usually happen monthly, and over the last 12 months, there were 12 payouts.

It is important to remember that a distribution yield is not the same as total return. A high yield shows how much cash is being paid out relative to the price, but it does not guarantee that your total investment will grow.

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 is not the same thing as NAV erosion, we use an "erosion-risk score" to measure this risk.

HMOP has an erosion score of 75, which is labeled as "Mild price erosion." This is considered a mild level of risk, and there is no severe erosion-risk flag for this ETF.

Pros

• The three-year total return is positive at approximately 11.89%.

• The fund provides regular monthly distributions.

• It has an income rating grade of "B."

Cons

• The year-to-date and one-year price returns have been negative.

• There is a measurement of "mild price erosion" according to the erosion-risk score.

Beginner takeaway

When looking at HMOP, it is helpful to look at both the share price and the total return. Because this fund pays out regular distributions, the total return (which includes those payments) is often different from the price return. Always remember that receiving cash distributions does not guarantee that the share price will stay stable.