ETF Education Report: METD

What this ETF is trying to do

The METD ETF is a specialized type of fund known as an "inverse" single-stock ETF. This means it is designed to move in the opposite direction of a specific company's stock price. Because it is an inverse fund, if that company's stock goes up, this ETF is generally designed to go down.

What the numbers show

The current price of METD is $12.58. To understand how the price has changed, we can look at its performance over different time periods:

• Year-to-Date (YTD) Price Return: The share price has dropped by approximately 20.63% since the start of the year.

• One-Year Price Return: Over the last year, the share price has declined by approximately 15.46%.

It is important to distinguish between price return and total return. Price return only tracks the change in the share price. Total return includes both the price change and any cash distributions paid out to investors.

According to the data:

• The YTD Total Return is approximately -19.48%.

• The One-Year Total Return is approximately -13.51%.

Because the total return numbers are higher (less negative) than the price return numbers, it shows that distributions helped offset some of the share-price decline.

Income and distribution explanation

METD pays out cash distributions to investors. The distribution yield is approximately 2.87%. This number describes the cash paid out relative to the current ETF price. Over the last 12 months, there were 4 distributions, which usually happen on a quarterly basis.

Investors should remember that a distribution yield is not the same as a total return. While distributions provide cash, they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value, or the actual value of the fund's underlying assets. While a falling market price is a "share-price decline," it does not always mean the NAV has eroded.

For this ETF, the erosion-risk score is 55, which is labeled as "Moderate price erosion." This is a measurement of risk rather than a confirmed fact of total value loss. There is no "severe erosion-risk flag" for this fund at this time.

Pros

• The fund provides regular cash distributions (usually quarterly).

• It offers a way to track the inverse movement of a single stock.

Cons

• The fund has experienced significant share-price declines over the last year and year-to-date.

• The income rating for this fund is an "F" grade.

Beginner takeaway

When looking at ETFs like METD, it is important to look at both the share price and the total return. A high distribution yield can sometimes make a fund look attractive, but if the share price is falling quickly, the total return might still be negative. Always check the difference between price movement and total returns to see the full picture.