What this ETF is trying to do

The Nuveen Preferred & Income Securities Fund (JPS) is an ETF listed on the NYSE. Based on its name, this fund focuses on providing income through preferred securities.

What the numbers show

As of November 3, 2023, the current price of JPS is $6.21. An estimated price from roughly one year ago was approximately $6.73.

When looking at this ETF, it is important to understand that there are two different ways to measure performance:

• Price Return: This only measures how much the share price changed. Over the last year, the price return was -7.73%. Over the last three years, the price return was -29.59%.

• Total Return: This includes both the change in share price and the cash distributions paid to investors. The one-year total return was -0.29%, and the three-year total return was -13.01%.

To see how this works, imagine you invested $10,000 in this ETF about a year ago at the estimated price of $6.73. Based on the share price alone, your investment would be worth approximately $9,231 today. This is before adding any cash payments you might have received.

Income and distribution explanation

This ETF has a distribution yield of approximately 8.22%. This represents the cash paid out to investors relative to the ETF's price. In the last 12 months, there were 13 distributions, which usually happen on a monthly basis.

It is important to remember that a high distribution yield does not mean you have earned that much in total profit. You must look at the total return to see if the cash payments are enough to make up for any drop in the share price.

NAV erosion explanation

This ETF has a "severe erosion-risk flag." This means StockValueFinder's screening rules detected significant price deterioration. The fund also has an erosion score of 30, which is labeled as "significant price erosion."

"NAV erosion" refers to a decline in the value of the fund. When a share price falls from a high amount to a much lower amount over time, it can destroy your principal (the original money you put in). Income investors usually prefer ETFs where the price stays steady or goes up slightly, rather than funds where the share price collapses.

Pros

• The ETF offers a high distribution yield of approximately 8.22%.

• It provides frequent cash payments, which are usually monthly.

Cons

• There is a severe erosion-risk flag.

• The share price has declined significantly over the last three years (-29.59% price return).

• Both the one-year and three-year total returns have been negative.

Beginner takeaway

A high distribution yield can be misleading. Even if an ETF pays you a lot of cash, you can still lose money overall if the share price drops faster than the cash you receive. Always look at the total return to get the full picture.