ETF Education Report: Nuveen Preferred & Income Opportunities Fund (JPC)

What this ETF is trying to do

The Nuveen Preferred & Income Opportunities Fund (JPC) is an ETF listed on the NYSE. While the specific holdings are not listed in the current data, this type of fund generally focuses on providing 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 the cash distributions paid out to investors.

Based on the data provided:

• Year-to-Date (YTD): The price return is approximately -16.15%. However, the total return is -9.91%.

• One Year: The price return was approximately -16.87%, while the total return was approximately -8.51%.

• Three Year: The price return was approximately 7.59%, but the total return was much higher at approximately 43.04%.

To visualize the price change, an investor's share price was estimated to be about $8.18 one year ago. The current price is $6.80.

Income and distribution explanation

This ETF has a distribution yield of approximately 11.15%. This means the fund pays out a significant amount of cash relative to its price. These distributions usually happen monthly, with Friday being the most common day for payments. Over the last 12 months, there were 12 distributions totaling $0.758 per share.

It is important to remember that a high distribution yield does not mean you are earning that percentage as your total return. You must 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 is not the same thing as NAV erosion, we use an "erosion score" to measure risk.

JPC has an erosion score of 55, which is labeled as "moderate price erosion." This indicates a moderate level of risk regarding how the price has behaved over time.

Pros

• The fund offers a high distribution yield of approximately 11.15%.

• It has shown a strong three-year total return of approximately 43.04%.

• It provides regular monthly income.

Cons

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

• There is a moderate erosion-risk score of 55.

Beginner takeaway

When looking at ETFs like JPC, high yields can be helpful for people seeking cash income. However, a high yield alone can be misleading. You should always look at the "total return" to see if the cash you receive is being offset by a drop in the share price.