Understanding the Invesco Value Municipal Income Trust (IIM)

What this ETF is trying to do

The Invesco Value Municipal Income Trust (IIM) is an ETF traded on the NYSE. While the specific investment strategy isn't detailed in the data, it is categorized as an ETF that focuses on providing income to its investors.

What the numbers show

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

• Price Return: This measures only the change in the share price. For IIM, the year-to-date (YTD) price return is approximately -10.23%, and the one-year price return is approximately -10.95%.

• Total Return: This includes both the price changes and the money paid out to investors (distributions). The YTD total return is approximately -5.12%, and the one-year total return is approximately -4.13%.

Because the total return numbers are higher than the price return numbers, it shows that the distributions helped offset some of the share-price decline. Looking further back, the three-year total return is approximately 23.79%, while the three-year price return is approximately 0.55%.

An estimated price from roughly one year ago was $12.42. The current price is $11.06.

Income and distribution explanation

This ETF has a distribution yield of approximately 8.37%. This number describes the cash distributions relative to the current ETF price. The trailing distributions over the last year were approximately $0.93 per share. These payments usually happen monthly, with Monday being the most common day for distributions.

It is important to remember that a high distribution yield does not mean an investor earned that full 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. StockValueFinder uses an "erosion-risk score" to measure this risk. IIM 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.

Pros

• The ETF provides a distribution yield of approximately 8.37%.

• The three-year total return has been positive at approximately 23.79%.

• Distributions are frequent, occurring usually on a monthly basis.

Cons

• The ETF has experienced a share-price decline recently, with a one-year price return of approximately -10.95%.

• The five-year total return is approximately -10.59%.

• There is a "mild" erosion-risk score of 75.

Beginner takeaway

When looking at IIM, it is helpful to distinguish between the share price and the total return. While the share price has gone down over the last year, the distributions provided to investors helped make the total return less negative than the price return alone. Always remember that high yields can exist even when a share price is falling.