Understanding the SPDR(R) Bloomberg International Corporate Bond ETF (IBND)

What this ETF is trying to do

The IBND is an Exchange Traded Fund (ETF) that trades on the NYSE. This type of fund is designed to provide exposure to international corporate bonds.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This only measures how much the share price has changed.

• Total Return: This includes both the change in share price and any cash distributions (dividends) paid out to investors.

Based on the data for IBND:

• Year-to-Date (YTD): The price return is approximately -5.17%, while the total return is approximately -3.41%.

• One Year: The price return was approximately -6.16%, and the total return was approximately -3.53%.

• Three Years: The price return was approximately 9.63%, while the total return was higher at approximately 18.50%.

• Five Years: The five-year total return was approximately -6.56%.

To visualize the price change, the estimated price from roughly one year ago was $32.45. The current price is $30.45.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the distribution yield. For IBND, the distribution yield is approximately 2.87%. These distributions are usually paid out monthly. In the last 12 months, the trailing distributions were $0.875 per share.

It is important to remember that a distribution yield tells you how much cash was paid out, but it does not guarantee that your original investment will stay the same value.

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.

IBND has an erosion score of 75, which is labeled as "Mild price erosion." This is a measurement of risk and does not necessarily mean the fund's value has collapsed. There is no "severe erosion-risk flag" for this ETF.

Pros

• The fund has a history of providing monthly distributions.

• Over a three-year period, the total return was positive at approximately 18.50%.

Cons

• The one-year and year-to-date total returns have been negative.

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

Beginner takeaway

When studying IBND, notice the difference between price return and total return. Because this fund pays out cash, the total return is often different from the price return. Also, while the fund provides regular income through distributions, the share price has seen some declines recently. Always look at both the price movement and the total return to get a full picture.