ETF Education Report: IBTK

What this ETF is trying to do

The ISHARES IBONDS DEC 2030 TERM TREASURY ETF (IBTK) is an exchange-traded fund. Based on its name, it focuses on Treasury securities that reach a specific end date in December 2030.

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.

For IBTK, the numbers show:

• Year-to-Date (YTD): The price return is approximately -4.48%. However, the total return is higher at -1.78%.

• One Year: The price return was approximately -4.48%, while the total return was approximately -0.87%.

• Three Year: The price return was about 1.02%, but the total return was much higher at approximately 13.26%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $19.85. The current price is $18.96.

Income and distribution explanation

Some investors look for ETFs that pay out cash regularly. This is called the distribution yield. For IBTK, the distribution yield is approximately 3.84%. These payments usually happen monthly, with 12 payments recorded over the last year.

It is important to remember that a high distribution yield does not mean you are making that much money in total. You must always look at the "total return" to see how the share price and the cash payments work together.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. StockValueFinder uses an erosion-risk score to measure this risk.

IBTK has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present. This suggests the fund's price movement is not currently showing signs of extreme deterioration.

Pros

• The fund provides regular monthly distributions.

• The three-year total return has been positive at approximately 13.26%.

Cons

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

• The five-year total return is approximately -5.17%.

Beginner takeaway

When studying IBTK, notice the difference between the share price and the total return. While the share price has dropped recently, the total return is higher because of the cash distributions paid to investors. Always check both numbers to get a full picture of how an ETF is performing.