Understanding the Voya Emerging Markets High Dividend Equity Fund (IHD)

What this ETF is trying to do

The Voya Emerging Markets High Dividend Equity Fund (IHD) is an exchange-traded fund (ETF). Based on its name, this fund focuses on stocks in emerging markets that pay high dividends.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return."

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

• Total Return: This includes both the change in share price and the extra money earned from distributions (dividends).

For IHD, the numbers show growth in both areas:

• Year-to-Date (YTD): The price return is approximately 21.53%, while the total return is approximately 29.16%.

• One Year: The price return is approximately 22.71%, while the total return is approximately 35.04%.

• Three Years: The price return is approximately 51.79%, while the total return is approximately 114.94%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The estimated price was $6.21, and the current price is $7.62.

Income and distribution explanation

This ETF provides regular cash payments, known as distributions. The distribution yield is approximately 8.66%. This number describes the cash payments relative to the current ETF price. IHD usually pays these out monthly, with 12 payments recorded over the last year. It is important to remember that a high distribution yield does not guarantee that an investor will earn that same percentage as their total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly. Some investors worry that high payouts might cause this. However, for IHD, the erosion-risk score is 100, and the label states "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag.

Pros

• The fund has shown positive price returns and total returns over the last year and three years.

• It offers a high distribution yield of approximately 8.66%.

Cons

• The fund's top holdings data was not supplied, so the specific companies it owns are not listed here.

• The fund focuses on emerging markets, which can behave differently than more established markets.

Beginner takeaway

IHD is an ETF that focuses on high-dividend stocks in emerging markets. It has provided both share-price growth and cash distributions over the past year. When looking at high-yield funds, always remember to check both the price return and the total return to see the full picture of how the fund has performed.