KHYB: KRANESHARES ASIA PACIFIC HIGH INCOME USD BOND ETF

What this ETF is trying to do

The KHYB ETF is an exchange-traded fund that focuses on providing income. It specifically looks at bonds from the Asia Pacific region.

What the numbers show

When looking at this ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For KHYB, the share price has seen some declines. The year-to-date (YTD) price return is approximately -2.51%. The one-year price return is approximately -2.92%, and the three-year price return is approximately -4.73%.

• Total Return: This includes the share price changes plus the money paid out to investors through distributions. Because of these payments, the total returns are positive. The YTD total return is approximately 3.80%, the one-year total return is approximately 5.57%, and the three-year total return is approximately 32.92%.

To give you an idea of the price movement, the estimated price from roughly one year ago was $24.61. The current price is $23.89.

Income and distribution explanation

This ETF is designed to pay out cash to investors. The distribution yield is approximately 8.52%. This means the amount of cash paid out is high relative to the ETF's price. These payments happen frequently; in the last 12 months, there were 11 payouts, and they usually happen monthly. Most of these payments occur on Thursdays.

It is important to remember that a high distribution yield does not mean the total return will be that same high percentage. Total return is the most complete way to see how much value an investment has actually gained or lost.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Investors often care about this because they want their original investment (the principal) to stay stable while they collect income.

For KHYB, 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 provides a high distribution yield of approximately 8.52%.

• The total returns over one, three, and five years have been positive.

Cons

• The share price has experienced declines over the one-year and three-year periods.

• High yields can sometimes be misleading if the share price is falling.

Beginner takeaway

KHYB is an ETF that focuses on bond income. While the price of each share has gone down slightly over the last few years, the total return (which includes the cash paid out to you) has been positive. Always look at both the price change and the total return to get the full picture.