Understanding the BlackRock Intermediate Muni Income Bond ETF (INMU)

What this ETF is trying to do

The BlackRock Intermediate Muni Income Bond ETF (ticker: INMU) is an exchange-traded fund. While the specific investment strategy isn't detailed in the data, its name suggests it focuses on municipal income bonds. These are typically loans made to local governments.

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 tracks how much the share price itself has changed.

• Total Return: This includes both the change in share price *and* any cash distributions (dividends) paid out to investors.

For INMU, the numbers show:

• Year-to-Date (YTD): The price return is approximately -4.62%, while the total return is approximately -2.24%.

• One Year: The price return was approximately -3.98%, while the total return was approximately -0.72%.

• Three Years: The price return was approximately 1.96%, while the total return was much higher at approximately 13.06%.

To give you an idea of the price movement, the current price is $22.93. The estimated price from roughly one year ago was approximately $23.88.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the distribution yield. For INMU, the distribution yield is approximately 3.49%. The fund has paid out trailing distributions of approximately $0.80 per share and usually pays these out monthly.

It is important to remember that a high distribution yield does not mean you are guaranteed to make that much money in total return. Total return is the most accurate way to see how the investment performed overall.

NAV erosion explanation

"NAV" stands for Net Asset Value, which is essentially what the fund is worth. "NAV erosion" happens when the value of the fund's underlying assets decreases over time.

StockValueFinder uses an erosion-risk score to measure this risk. INMU has an erosion score of 94, which is labeled as "Stable / sideways." This means the fund does not currently show signs of significant price deterioration. There is no severe erosion-risk flag for this ETF.

Pros

• The fund has a history of providing total returns, such as the 13.06% seen over the last three years.

• It provides regular monthly distributions.

Cons

• The share price has seen a decline recently, with negative price returns for both the year-to-date and one-year periods.

• The total return has also been negative over the last year.

Beginner takeaway

When looking at INMU, it is helpful to distinguish between the cash you receive (distributions) and the change in the share price. While the fund provides monthly income, the recent share-price declines have impacted the total return. Always look at the total return to get the full picture of an investment's performance.