What this ETF is trying to do

The ISHARES IBONDS DEC 2032 TERM TREASURY ETF (IBTM) is an exchange-traded fund. Based on its name, it focuses on Treasury securities that reach a specific end date in December 2032.

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 changes. Total return includes both the price change and any cash payments (distributions) made to investors.

Here is what the data shows for IBTM:

• Year-to-Date (YTD): The price return is approximately -4.85%. However, the total return is -2.34%.

• One Year: The price return was approximately -5.28%, while the total return was approximately -1.55%.

• Three Year: The price return was approximately -1.90%, but the total return was a positive 10.22%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $23.18, and the current price is $21.96.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 4.03%. This number describes the cash payments relative to the current ETF price. 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 an investor earned that same percentage as their total return. Total return is the more complete picture of how the investment performed.

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 market price is not the same thing as NAV erosion, we use "erosion scores" to measure risk.

IBTM has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and is not a severe erosion-risk flag.

Pros

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

• Over a three-year period, the total return was positive at approximately 10.22%.

Cons

• The share price has seen declines in the short term (year-to-date and one-year periods).

• The erosion score indicates a "mild" risk of price erosion.

Beginner takeaway

When studying IBTM, notice how the total return is often higher than the price return. This happens because the cash distributions help offset some of the share-price declines. Always look at both price return and total return to understand how an ETF is performing.