What this ETF is trying to do

The Nuveen Preferred and Income Term Fund (JPI) is an ETF that focuses on providing income to its investors, as suggested by its name.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return. Price return only tracks how much the share price changes. Total return includes those price changes plus any cash payments (distributions) you received.

According to the data for JPI:

• The current price is $20.68.

• The estimated price from roughly one year ago was $20.04.

• The one-year price return was 3.19%.

• The one-year total return was 13.81%.

To see the difference, imagine you invested $10,000 in this ETF roughly one year ago when the estimated price was $20.04. If you only looked at the share price, your investment would be worth about $10,319 today. However, because the fund also paid out cash, your total return would be 13.81%, making your total value much higher.

Other numbers include a Year-to-Date (YTD) price return of 5.51% and a YTD total return of 13.60%. Over three years, the price return was 6.71%, while the total return was 35.22%.

Income and distribution explanation

This ETF has a distribution yield of 9.63%. This number describes the cash payments made relative to the ETF's price. JPI usually pays these distributions monthly, and it made 12 payments over the last year. While high yields provide cash income, they do not guarantee that the share price will stay the same or go up.

NAV erosion explanation

NAV erosion is a term used when the actual value of the assets held inside a fund goes down over time. It is different from a simple change in the market share price. For JPI, the data shows an erosion-risk score of 100, which is labeled as "No price erosion detected." The erosion-severity is listed as "good," and there is no severe erosion-risk flag.

Pros

• The fund has shown positive total returns over one-year and three-year periods.

• It provides regular monthly income through distributions.

• The data shows no detected price erosion.

Cons

• The top holdings were not supplied in this report, so we cannot see which specific companies the fund invests in.

Beginner takeaway

When you look at an ETF like JPI, always check both the price return and the total return. The price return tells you how the share price moved, but the total return gives you a better picture of your actual results because it includes the cash distributions you received.