Understanding the Hartford Schroders Tax-Aware Bond ETF (HTAB)

What this ETF is trying to do

The Hartford Schroders Tax-Aware Bond ETF (HTAB) is an exchange-traded fund that focuses on bonds. While the specific holdings are not listed in this report, bond ETFs generally aim to provide investors with regular income through interest payments.

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 much the share price itself has changed.

• Total Return: This includes both the change in share price *and* the money paid out to investors through distributions.

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

• Year-to-Date (YTD): The price return is approximately -6.32%. However, the total return is -3.62%.

• One Year: The price return was approximately -6.32%, while the total return was approximately -2.68%.

• Three Years: The price return was approximately -1.05%, but the total return was a positive 10.68%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $19.15. The current price is $17.94.

Income and distribution explanation

This ETF provides regular cash payments, known as distributions. The distribution yield is approximately 4.04%. This number tells you how much cash the ETF paid out relative to its current price.

HTAB usually pays these distributions monthly, with 12 payments recorded over the last year. Because these payments are made to investors, they are a key part of why the "total return" is often different from the "price return."

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. StockValueFinder uses an erosion-risk score to measure this risk.

HTAB has an erosion score of 75, which is labeled as "mild price erosion." This means there has been some slight decline in the share price. However, it is important to note that a "severe erosion-risk flag" has not been triggered for this ETF.

Pros

• Regular Income: The ETF has a history of monthly distributions.

• Positive Long-Term Total Return: Over a three-year period, the total return was positive at 10.68%, even though the share price itself saw a slight decline.

Cons

• Price Declines: The share price has seen negative returns over the last year and year-to-date.

• Mild Erosion Risk: The fund shows a mild erosion-risk score of 75.

Beginner takeaway

When looking at HTAB, remember that a falling share price does not tell the whole story. While the price of a single share has gone down recently, the total return (which includes the cash paid to you) tells a different story. Always look at both price returns and total returns to get the full picture of how an ETF is performing.