What this ETF is trying to do

The iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) is an exchange-traded fund that focuses on companies involved in brokerage and stock exchanges. This means it holds businesses that help people buy and sell stocks or manage financial markets.

According to the most recent data, some of its Top Holdings include:

• The Goldman Sachs Group Inc (18.16%)

• Morgan Stanley (15.55%)

• Charles Schwab Corp (9.48%)

• Robinhood Markets Inc Class A (4.77%)

• Intercontinental Exchange Inc (4.75%)

Please note that this list is partial and holdings can change over time.

What the numbers show

When looking at an ETF, it is important to know the difference between price return and total return. Price return only tracks how much the share price changed. Total return includes both the price change and any cash distributions (dividends) paid out.

Here is how IAI has performed:

• Year-to-Date (YTD): The price return is approximately -0.88%, while the total return is about 0.07%.

• One Year: The price return was approximately 1.32%, and the total return was about 2.55%.

• Three Years: The price return was approximately 95.08%, and the total return was about 102.27%.

To give you an idea of price movement, the estimated price from roughly one year ago was $175.47. The current price is $177.79.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. IAI has a distribution yield of approximately 1.20%. This number describes the cash distributions relative to the ETF's price.

The fund usually pays these out quarterly, and it has made 4 payments over the last 12 months. While distributions provide cash income, they are not the same as total return.

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 can sometimes be related to erosion, they are not the same thing.

For this ETF, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The ETF has shown significant total returns over a three-year period.

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

Cons

• The year-to-date price return has been slightly negative.

• The distribution yield is relatively low compared to some other types of income-focused funds.

Beginner takeaway

When studying IAI, remember that the share price and the total return are different numbers. The total return is a more complete picture because it includes the cash distributions paid to investors. Always look at both the price movement and the yield to understand how an ETF is performing.