Understanding the Voya Asia Pacific High Dividend Equity Income Fund (IAE)

What this ETF is trying to do

The Voya Asia Pacific High Dividend Equity Income Fund (IAE) is an exchange-traded fund (ETF). Based on its name, this fund focuses on providing income through high dividends from companies located in the Asia Pacific region.

What the numbers show

When looking at an ETF, it is important to separate "price return" from "total return."

• Price Return: This measures only the change in the share price. For IAE, the one-year price return was approximately -5.44%. The year-to-date (YTD) price return was approximately -2.06%.

• Total Return: This measures the overall change, including the money paid out to investors through distributions. IAE's total returns are much higher than its price returns. For example, the one-year total return was approximately 28.28%, and the three-year total return was approximately 118.69%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $7.54. The current price is $7.13.

Income and distribution explanation

This ETF has a high distribution yield of approximately 34.22%. This means the fund pays out a large amount of cash relative to its share price. These distributions happen frequently; in the last 12 months, there were 13 payments, and they usually occur monthly.

It is important to remember that a high distribution yield is not the same as total return. While the cash payments are large, they are part of the overall performance calculation.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. While a falling share price does not always mean the NAV is dropping, investors often watch for this.

IAE 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 shown very high total returns over the last one, three, and five years.

• It provides frequent cash distributions (usually monthly).

Cons

• The share price has seen declines in both the one-year and year-to-date periods.

• The fund shows a "mild" erosion-risk score.

Beginner takeaway

For new investors, IAE shows a big difference between share price movement and total return. While the price of a single share has gone down recently, the total return (which includes the cash paid out to investors) has been positive. Always remember that high yields can be misleading if the share price is also falling, so it is helpful to look at both numbers together.