ETF Education Report: Delaware Ivy High Income Opportunities Fund (IVH)

What this ETF is trying to do

The Delaware Ivy High Income Opportunities Fund (IVH) is an exchange-traded fund (ETF) listed on the NYSE. While the specific investment strategy is not detailed in the provided data, the name suggests a focus on providing high income to its investors.

What the numbers show

It is important to understand the difference between price return and total return. Price return only tracks how much the share price changes. Total return includes both the price change and any distributions (cash payments) made to investors.

• Year-to-Date (YTD): The YTD price return is approximately 2.01%. However, the YTD total return is higher at approximately 3.99%.

• One Year: The one-year price return was approximately -11.76%. When including distributions, the one-year total return was approximately -3.72%.

• Three Year: The three-year price return was approximately -8.06%, while the three-year total return was approximately 17.75%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was approximately $12.67. The current price is $11.18. If you had invested $10,000 into this ETF one year ago based solely on the share price, your investment would have dropped to approximately $8,824 before accounting for any cash distributions.

Income and distribution explanation

This ETF has a distribution yield of approximately 8.75%. This means the fund pays out a significant amount of cash relative to its share price. These distributions usually happen monthly, with 13 payments recorded over the last 12 months. While these payments provide cash income, a high yield does not guarantee that an investor will make money overall.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. In this report, we look at an erosion-risk score to measure price deterioration. This fund has an erosion-risk score of 75, which is labeled as "mild price erosion." It is important to note that a falling market price is a share-price decline, but it does not automatically prove the NAV has declined.

Pros

• The fund provides a relatively high distribution yield of approximately 8.75%.

• The three-year total return is positive at approximately 17.75%, showing that distributions have helped the overall return over a longer period.

Cons

• The fund has experienced a share-price decline over the last year and the last three years.

• The one-year total return was negative at approximately -3.72%.

Beginner takeaway

When looking at high-income ETFs, it is easy to focus only on the distribution yield. However, a high yield can be misleading if the share price is falling. Income investors often look for funds where the price stays steady or grows, because if the share price collapses, it can destroy the original amount of money (the principal) invested. Always look at the "total return" to see how both price changes and cash payments work together.