What this ETF is trying to do

The Franklin Income Focus ETF (ticker: INCM) is an exchange-traded fund listed on the NYSE. Based on its name and data, this ETF is designed to provide investors with a focus on income.

What the numbers show

When looking at how this ETF has performed, it is important to look at two different types of returns: price return and total return.

Price return only tracks how much the share price itself has changed. Total return is a more complete measure because it includes both the change in share price and the money paid out through distributions.

Here is what the data shows:

• Year-to-Date (YTD): The price return is approximately 2.35%, while the total return is higher at approximately 6.51%.

• One Year: The price return was approximately 3.39%, while the total return was approximately 9.02%.

• Three Years: The price return was approximately 19.70%, while the total return was approximately 39.79%.

Additionally, the current price is $28.70. An estimated price from roughly one year ago was approximately $27.76.

Income and distribution explanation

This ETF is designed to pay out regular cash to investors. The distribution yield is approximately 5.33%. This number describes the cash distributions relative to the ETF's price.

The fund has a history of paying out 12 times over the last year, and its distribution frequency is usually monthly. Most of these payments have occurred on Fridays. The trailing distributions for the period were $1.531 per share.

NAV erosion explanation

Some investors worry about "NAV erosion." This happens when the value of the underlying assets in a fund decreases over time.

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion. However, the fund's erosion-risk score is 94, which is labeled as "Stable / sideways," and the erosion severity is described as "good." There is no severe erosion-risk flag for this ETF.

Pros

• Total Return vs. Price Return: The total return is higher than the price return in all reported timeframes, meaning distributions have added value to the overall performance.

• Regular Income: The fund provides a monthly distribution frequency.

• Stable Price Trend: The erosion-risk score suggests the price has been relatively stable or moving sideways rather than dropping sharply.

Cons

• Missing Holding Data: The provided data does not list specific top holdings or the total number of holdings in the portfolio.

• Yield vs. Total Return: While the yield is 5.33%, investors should remember that a high distribution yield does not guarantee the same level of total return.

Beginner takeaway

The Franklin Income Focus ETF (INCM) has shown both share-price growth and total returns that include cash distributions. Because the total return is higher than the price return, the distributions have contributed significantly to the fund's overall performance over the last one, three, and year-to-date periods.