What this ETF is trying to do

The TCW High Yield Bond ETF (ticker: HYBX) is an exchange-traded fund listed on the NYSE. While the specific investment strategy isn't detailed in the data, high-yield bond ETFs generally focus on providing income through bonds.

What the numbers show

It is important to understand that "price return" and "total return" are two different things. Price return only tracks how the share price changes. Total return includes both the price change and the money paid out to investors through distributions.

For HYBX, the numbers show:

• Year-to-Date (YTD): The price return is approximately -4.13%, but the total return is approximately 1.60%.

• One-Year: The price return is approximately -5.91%, while the total return is approximately 1.88%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $30.48, and the current price is $28.68. This shows a decline in the share price over that time.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 8.26%. These payments usually happen monthly, with 12 payments made over the last year. Most of these payments have been made on Mondays.

It is important to remember that a high distribution yield does not mean you earned that same percentage as your total return. Total return is the more complete measurement of how much value was created or lost.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. While the share price of HYBX has gone down, a falling market price does not always mean the NAV has declined.

However, StockValueFinder uses an "erosion-risk score" to measure this risk. HYBX has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk, not a confirmed fact that the fund's value has been destroyed.

Pros

• Total Return is Positive: Even though the share price went down over the last year, the total return remained positive at approximately 1.88%.

• Regular Income: The fund provides a distribution yield of approximately 8.26% with monthly frequency.

Cons

• Share-Price Decline: The price return has been negative for both the year-to-date period and the one-year period.

• Mild Erosion Risk: The fund has a score indicating mild price erosion.

Beginner takeaway

When looking at ETFs like HYBX, don't just look at the distribution yield. A high yield can sometimes be accompanied by a falling share price. Always compare the price return (the change in the cost of one share) with the total return (the price change plus the cash distributions) to get a clearer picture of how the investment has performed.