IBCA: ISHARES IBONDS DEC 2035 TERM CORPORATE ETF

What this ETF is trying to do

The ISHARES IBONDS DEC 2035 TERM CORPORATE ETF (IBCA) is an exchange-traded fund. Based on its name, it focuses on corporate bonds that reach a specific end date (a "term") in December 2035.

What the numbers show

The current price of one share is $24.12. To understand how the price has changed, we can look at an estimated price from roughly one year ago, which was approximately $25.95.

It is important to understand the difference between "price return" and "total return":

• Price Return: This measures only the change in the share price. The one-year price return was approximately -7.04%, and the year-to-date (YTD) price return was approximately -7.02%.

• Total Return: This includes both the share price change and any distributions (cash payments) made to investors. The one-year total return was approximately -2.46%, and the YTD total return was approximately -3.56%.

Because the total return numbers are higher than the price return numbers, it shows that distributions helped offset some of the share-price decline.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 5.07%. This number describes the cash payments relative to the current ETF price. These payments usually happen monthly, with 12 payments made over the last year.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. StockValueFinder uses an "erosion-risk score" to measure this risk. This ETF has an erosion score of 75, which is labeled as "mild price erosion." While the share price has declined, this score is a measurement of risk rather than a definitive proof of total value loss. There is no severe erosion-risk flag for this ETF.

Pros

• The ETF provides regular cash distributions (usually monthly).

• The total return is better than the price return, meaning the distributions provide some value back to the investor.

Cons

• The ETF has experienced a share-price decline over the last year and year-to-date.

• The erosion-risk score indicates "mild price erosion."

Beginner takeaway

When looking at ETFs that pay regular cash, it is important to remember that a high distribution yield does not guarantee you will make money. You must look at the "total return" to see how the share price changes and the cash payments work together. In the case of IBCA, while the fund pays out cash, the share price itself has been falling.