MDIV: MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
What this ETF is trying to do
The Multi-Asset Diversified Income Index Fund (MDIV) is an ETF designed to provide income. It holds a variety of different investments, totaling 124 holdings. Because it is a "diversified" fund, it spreads its money across many different companies and assets rather than putting all its eggs in one basket.
Top Holdings
The following are some of the largest holdings in the fund (note that this list is partial):
• First Trust Tactical High Yield ETF: 20.33%
• AGNCO: 1.80%
• IEP: 1.72%
• AGNC Investment Corp: 1.54%
• Annaly Capital Management Inc: 1.53%
• Armour Residential REIT Inc: 1.52%
• Morgan Stanley DR: 1.40%
• Mach Natural Resources LP: 1.38%
• Rithm Capital Corp: 1.34%
• TXO Partners LP: 1.28%
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 both the price change and any cash distributions (dividends) paid out.
• Year-to-Date (YTD): The price return is approximately 1.91%, while the total return is approximately 7.58%.
• One Year: The price return was approximately 0.13%, while the total return was approximately 7.47%.
• Three Year: The price return was approximately 9.58%, while the total return was approximately 33.74%.
The current price of the ETF is $16.02. An estimated price from roughly one year ago was $16.00.
Income and distribution explanation
This ETF is focused on paying out cash to investors. The distribution yield is approximately 7.75%. This number describes the cash distributions relative to the ETF's price. It is important to remember that a high yield does not mean you earned that same percentage in total return.
The fund usually pays out distributions monthly. Over the last 12 months, there were 13 payouts.
NAV erosion explanation
"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Some investors worry about this because they want to make sure the money they put in stays stable while they collect income.
For MDIV, 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
• Higher Total Returns: The total return figures are significantly higher than the price return figures, showing that distributions add value.
• Stable Risk Profile: The erosion-risk score suggests the fund's value has been relatively stable.
• Frequent Income: The fund provides regular monthly distributions.
Cons
• Price Movement: While total returns are positive, the share-price return (price return) has been much lower than the total return.
• Partial Data: The list of top holdings is only a partial view of the 124 total holdings.
Beginner takeaway
When looking at MDIV, it is helpful to distinguish between the share price and the total return. While the share price itself has moved very little, the total return is much higher because of the cash distributions paid to investors. Always remember that a high distribution yield is not the same thing as total profit.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | FIRST TRUST TACTICAL HIGH YIELD ETF | HYLS | 20.45% |
| 2 | n/a | AGNCO | 1.82% |
| 3 | n/a | IEP | 1.66% |
| 4 | ARMOUR RESIDENTIAL REIT INC | ARR | 1.41% |
| 5 | MORGAN STANLEY DR | MS-PRE | 1.40% |
| 6 | AGNC INVESTMENT CORP | AGNC | 1.38% |
| 7 | ANNALY CAPITAL MANAGEMENT INC | NLY | 1.36% |
| 8 | MACH NATURAL RESOURCES LP | MNR | 1.35% |
| 9 | RITHM CAPITAL CORP SERIES B | RITM-PRB | 1.28% |
| 10 | TXO PARTNERS LP | TXO | 1.28% |