MFS Government Markets Income Trust (MGF) Educational Report

What this ETF is trying to do

MGF is an Exchange Traded Fund (ETF) traded on the NYSE. While the specific investment strategy is not listed in the provided data, ETFs like this are generally designed to provide investors with regular income.

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and the cash distributions paid out to investors.

Here is what the data shows for MGF:

• Year-to-Date (YTD): The price return is approximately -10.58%. However, the total return is approximately -5.07%.

• One Year: The price return was approximately -12.74%, while the total return was approximately -5.61%.

• Three Year: The price return was approximately -11.60%, but the total return was a positive 11.28%.

To visualize the price change, an investor's share price was estimated to be about $3.10 one year ago. The current price is $2.71.

Income and distribution explanation

This ETF has a distribution yield of approximately 8.55%. This means the cash distributions are high relative to the current share price. These payments usually happen monthly, with Tuesday being the most common day for distributions. Over the last 12 months, there were 12 payouts totaling approximately $0.23 per share.

Note that a high distribution yield does not mean an investor earned that same percentage as their total return. Total return is the more complete picture of how much value was gained or lost.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price is not the same thing as NAV erosion, we use "erosion scores" to measure risk.

MGF has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and does not mean the fund's value has definitely collapsed. There is no "severe erosion-risk flag" for this ETF.

Pros

• The fund provides a high distribution yield of approximately 8.55%.

• Over a three-year period, the total return was positive at approximately 11.28%.

Cons

• The share price has seen declines in the one-year and year-to-date periods.

• The fund has a "mild" erosion-risk score.

Beginner takeaway

When looking at ETFs that pay high amounts of cash, it is important to look at both the distribution yield and the total return. A high yield can look attractive, but if the share price is falling significantly, it can impact your overall results. Always check the total return to see how much value you are actually gaining or losing after all distributions are considered.