ETF Education Report: BONDBLOXX USD HIGH YIELD BOND SECTOR ROTATION ETF (HYSA)

What this ETF is trying to do

The HYSA ETF is an exchange-traded fund that focuses on high-yield bonds. High-yield bonds are often called "junk bonds" because they typically offer higher interest rates to compensate for higher risk. This ETF is designed to move between different sectors within that bond market.

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 cash distributions (dividends) paid out to investors.

Based on the data:

• Year-to-Date (YTD): The price return is approximately -4.15%. However, the YTD total return is positive at about 0.09%.

• One Year: The one-year price return is approximately -5.03%, while the one-year total return is about 1.41%.

• Three Years: The three-year price return is approximately 0.63%, but the three-year total return is much higher at about 23.82%.

To visualize the price change, an investor's share price was estimated to be roughly $15.29 one year ago. The current price is $14.52.

Income and distribution explanation

This ETF provides regular cash payments to investors. The distribution yield is approximately 6.80%. These distributions usually happen monthly, with the most recent 12-month count showing 12 payouts. Most of these payments occur on Mondays.

While a high yield can provide cash income, it is not the same as total return. An investor should look at the total return to see how the investment performed overall after including those cash payments.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value, or the actual value of the underlying assets in the fund. While a falling share price can sometimes look like erosion, they are not always the same thing.

This ETF has an erosion-risk score of 75, which is labeled as "mild price erosion." This is a measurement of risk, not a guarantee that the fund's value has collapsed. There is no severe erosion-risk flag for this ETF.

Pros

• The fund has a history of positive total returns over the one-year and three-year periods.

• It provides a steady stream of monthly cash distributions.

Cons

• The share price has experienced declines (negative price returns) over the last year and year-to-date.

• There is a "mild" erosion-risk score to consider.

Beginner takeaway

When looking at HYSA, it is helpful to distinguish between the share price and the total return. Even when the share price goes down, the total return can be positive because of the cash distributions paid out to investors. Always remember that a high distribution yield does not guarantee that your original investment amount will stay the same.