What this ETF is trying to do

MFS Charter Income Trust (MCR) is an ETF traded on the NYSE. Based on the provided data, this fund focuses on providing regular cash payments to investors through distributions.

What the numbers show

The current price of one share is $5.94. An estimated price from roughly one year ago was $6.25.

It is important to understand that there are two ways to look at returns:

• Price return measures only the change in the share price.

• Total return includes both the share price change and any cash distributions paid out.

Over the last year, the one-year price return was -4.96%, meaning the share price went down. However, the one-year total return was 3.59%. This shows that when you include the cash payments, the overall return was positive.

For the year-to-date (YTD) period, the price return is -5.26%, while the total return is -1.03%. Looking at a longer period, the three-year price return was -3.57%, but the three-year total return was 25.01%.

Income and distribution explanation

This ETF has a distribution yield of approximately 9.02%. This represents the cash distributions relative to the ETF price. The fund usually pays out money monthly, having made 12 payments over the last year.

A high distribution yield can be helpful for those seeking cash, but it is not the same as total return. A high yield does not guarantee that an investor will earn that same percentage as their overall profit.

NAV erosion explanation

"NAV erosion" refers to a decline in the value of the underlying assets held by the ETF. StockValueFinder uses an "erosion-risk score" to measure this risk.

MCR has an erosion-risk score of 94, which is labeled as "Stable / sideways." The severity is described as "good," and there is no severe erosion-risk flag for this fund.

Pros

• The fund offers a high distribution yield of 9.02%.

• The three-year total return has been 25.01%.

• The erosion-risk measurement is considered stable.

Cons

• The share price has declined over the last year (-4.96%) and year-to-date (-5.26%).

• A falling share price means the value of your initial investment could decrease if you do not include distributions.

Beginner takeaway

To understand how these numbers work together, imagine you invested $10,000 in this ETF one year ago at the estimated starting price of $6.25 per share. After one year, the share price dropped to $5.94. If you only looked at the share price, your $10,000 would be worth less. However, because the one-year total return was 3.59%, the combination of the lower share price and the cash distributions meant your overall investment value actually grew. Always remember that a high yield can exist even when the share price is falling.