What this ETF is trying to do

The ISHARES LIFEPATH TARGET DATE 2040 ETF (ITDD) is an investment fund. Target date ETFs are usually designed for people who want to reach a specific goal, like retirement, by a certain year. In this case, the goal year is around 2040. The fund holds a mix of different investments, such as stocks and bonds.

What the numbers show

The current price of one share is $39.06. An estimated price from roughly one year ago was about $34.94.

When looking at performance, it is important to understand two different terms: price return and total return.

• Price return only measures how much the share price itself changed.

• Total return measures the overall change, including both the share price and any cash payments (distributions) you received.

Over the last year, the one-year price return was approximately 11.79%. However, the one-year total return was higher, at approximately 13.82%. This shows that the total return includes those extra cash payments.

For the current year so far (YTD), both the price return and the total return are approximately 10.97%. If you had invested $10,000 in this ETF based only on the share price changes over the last year, your investment would have grown by the one-year price return of 11.79%.

Income and distribution explanation

This ETF pays out cash distributions. The distribution yield is approximately 1.64%, which describes the cash payments relative to the ETF's price. Over the last year, the trailing distributions were about $0.64 per share.

It is important to note that these payments are "irregular" or "less frequent." In the last 12 months, there was only one payout. A high yield alone can be misleading; you should always look at the total return to see how much you actually earned.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in an ETF drops significantly. StockValueFinder uses an "erosion-risk score" to measure this risk. For ITDD, the erosion score is 100, and the label says "No price erosion detected." This is considered a "good" severity level, and there is no severe erosion-risk flag.

Pros

• The ETF has shown positive price returns and total returns over the last year.

• It holds a variety of investments. Some of its Top Holdings include:

• ISHARES RUSSELL 1000 ETF (43.69%)

• ISHARES CORE MSCI INTL DEV MKTS ETF (18.17%)

• ISHARES CORE MSCI EMERGING MARKETS ETF (8.65%)

• ISHARES US TREASURY BOND ETF (8.63%)

• ISHARES MBS ETF (5.53%)

• No price erosion was detected.

Cons

• The cash distributions are irregular, with only one payout in the last year.

• Three-year return data was not supplied.

• Note: Holdings can change over time.

Beginner takeaway

When studying ITDD, remember that the share price and the total return are different numbers. The total return gives you a better idea of your overall growth because it includes cash payments. Also, since this ETF's distributions are irregular, you cannot rely on them happening at a steady, predictable schedule.