What this ETF is trying to do

The John Hancock Dynamic Municipal Bond ETF (JHMU) is an exchange-traded fund listed on the NYSE. While the specific investment strategy details are not provided in this report, municipal bond ETFs generally focus on providing income through bonds issued by local governments.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price changes and the money paid out to investors through distributions.

For JHMU, the numbers show different results depending on which you look at:

• Year-to-Date (YTD): The price return is approximately -3.56%. However, the YTD total return is approximately -1.23%.

• One Year: The one-year price return is approximately -3.21%. Interestingly, the one-year total return is positive at approximately 0.54%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was about $26.07. The current price is $25.23.

Income and distribution explanation

This ETF provides cash to investors through distributions. The distribution yield is approximately 3.94%. This number describes the cash payments relative to the current ETF price. These payments happen frequently; the fund usually pays out monthly, with 12 payments made over the last year.

It is important to remember that a distribution yield is not the same as total return. While distributions provide cash income, they do not guarantee that the value of your original investment will stay the same.

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 be a sign of erosion, they are not always the same thing.

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

Pros

• Positive Total Return: Over the last year, while the share price went down, the total return was positive (0.54%).

• Regular Income: The fund provides monthly distributions.

• Stable Risk Score: The erosion-risk measurements suggest a stable profile.

Cons

• Price Decline: The share price has seen a decline both year-to-date and over the last year.

• Lower Income Grade: The income rating score is 68, which is a "C" grade.

Beginner takeaway

When studying JHMU, notice how the total return can be different from the price return. Even when the share price drops, the cash distributions can help make the total return a positive number. Always look at both the price movement and the distributions to get a full picture of how an ETF is performing.