ETF Education Report: JEMB

What this ETF is trying to do

The Janus Henderson Emerging Markets Debt Hard Currency ETF (JEMB) is an exchange-traded fund. Based on its name, it focuses on debt from emerging markets using "hard currency."

What the numbers show

It is important to understand that there are two ways to look at how an ETF performs: price return and total return. Price return only tracks the change in the share price. Total return includes both the price change and any cash distributions (dividends) paid out to investors.

Here is what the data shows for JEMB:

• Year-to-Date (YTD): The price return is approximately -4.79%. However, the YTD total return is -0.34%.

• One-Year: The one-year price return is approximately -3.72%. When including distributions, the one-year total return is approximately 2.50%.

• Price Comparison: The current price is $51.10. The estimated price from roughly one year ago was approximately $53.08.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 6.55%. This number describes the cash paid out relative to the ETF's price.

The distributions are usually paid monthly, with 12 payments recorded over the last year. While a high yield can provide cash income, it is not the same as total return. Investors should always look at the total return to see how the investment performed overall.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes look like erosion, they are not always the same thing.

For JEMB, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The ETF has a positive one-year total return of approximately 2.50%, even though the share price itself went down.

• It offers a distribution yield of approximately 6.55%.

Cons

• The share price has seen a decline, with a negative YTD price return of approximately -4.79%.

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

Beginner takeaway

When looking at JEMB, it is helpful to distinguish between the share price and the total return. Even when the share price drops, the total return can be positive if the cash distributions are high enough to make up for the price decline. Always remember that a high distribution yield does not guarantee that your original investment amount will stay the same.