ETF Education Report: HORIZON KINETICS MEDICAL ETF (MEDX)

What this ETF is trying to do

The HORIZON KINETICS MEDICAL ETF (ticker: MEDX) is an exchange-traded fund that focuses on the medical sector. Based on its top holdings, it invests in various healthcare and pharmaceutical companies.

What the numbers show

The current price of MEDX is $34.73. To understand how the value has changed, we can look at different types of returns:

• Price Return: This measures only the change in the share price. The year-to-date (YTD) price return is approximately 4.59%. Over the last year, the price return was about 10.02%. Looking further back, the three-year price return was approximately 18.16%.

• Total Return: This includes both the share price changes and any distributions (cash payments) made to investors. The YTD total return is 4.59%. The one-year total return was approximately 11.37%, and the three-year total return was approximately 27.83%.

An estimated price from roughly one year ago was $31.57. If you had invested in the share price alone, it has grown from that estimated amount to the current price.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. MEDX has a distribution yield of approximately 1.18%. This means the cash distributed is about 1.18% of the ETF's price. The trailing distributions were $0.41. It is important to remember that the distribution yield is not the same as the total return. Total return tells a more complete story by including both price changes and these cash payments.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases significantly over time. StockValueFinder uses an "erosion-risk score" to help monitor this. For MEDX, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in this portfolio (note that this is a partial list):

• ELI LILLY AND CO: 18.58%

• ABBVIE INC: 9.60%

• US BANK MMDA USBGFS 7: 8.27%

• NOVARTIS AG ADR: 6.54%

• JOHNSON & JOHNSON: 6.08%

• AMGEN INC: 4.75%

• MERCK & CO INC: 4.67%

• BRISTOL-MYERS SQUIBB CO: 4.51%

• ALKERMES PLC: 4.46%

• ASTRAZENECA PLC: 4.43%

Pros

• The ETF has shown positive price returns over the last year and three years.

• The total return figures are higher than the price return figures, showing that distributions have added value.

Cons

• The distribution frequency is described as "irregular" or "less frequent."

Beginner takeaway

When looking at MEDX, it is helpful to distinguish between the share price and the total return. While the share price has grown, the total return provides a fuller picture by including the cash distributions paid out to investors. Always remember that high yields can sometimes be misleading, so looking at the total return and the erosion-risk score is a helpful way to understand how a fund is performing.