ETF Education Report: HARBOR HEALTH CARE ETF (MEDI)

What this ETF is trying to do

The HARBOR HEALTH CARE ETF, which uses the ticker symbol MEDI, is an exchange-traded fund focused on the healthcare sector. It holds a variety of companies within this industry. Based on its top holdings, it includes companies like Eli Lilly and Co, Ascendis Pharma AS, and Gilead Sciences Inc. Please note that the list of holdings provided is a partial list of the largest companies in the fund and can change over time.

What the numbers show

When looking at how an ETF performs, 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.

• Total Return: This includes both the share price change and any distributions (cash payments) made to investors.

For MEDI, the numbers show:

• Year-to-Date (YTD): The YTD price return is approximately 2.90%. The YTD total return is also approximately 2.90%.

• One-Year: The one-year price return was approximately 9.53%. The one-year total return was approximately 9.79%.

• Three-Year: The three-year price return was approximately 46.51%. The three-year total return was approximately 50.47%.

To give you an idea of price movement, the estimated price from roughly one year ago was $29.55. The current price is $32.36.

Income and distribution explanation

Some investors look for "yield," which is the cash an ETF pays out. The distribution yield for this ETF is approximately 0.23%. This represents the cash distributions relative to the current price. It is important to remember that a distribution yield is not the same as total return. Also, distributions are paid out irregularly, with one payout recorded in the last 12 months.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases significantly. Some investors worry about this because they want to keep their original investment amount stable. For this ETF, the erosion-risk score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this fund.

Pros

• The ETF has shown positive price returns over the one-year and three-year periods.

• The total return is higher than the price return, meaning distributions added value to the overall performance.

• The erosion-risk measurement is rated as "good."

Cons

• The distribution frequency is described as irregular or less frequent, so investors cannot rely on steady, regular cash payments.

• The distribution yield is relatively low at 0.23%.

Beginner takeaway

When studying MEDI, notice that the total return is slightly higher than the price return. This means the cash distributions helped boost the overall value. Because there is no detected price erosion, the fund's share price has not shown the specific type of deterioration that triggers a severe risk warning. Always remember to look at both price changes and distributions to see the full picture of an ETF's performance.