ETF Education Report: BlackRock MuniHoldings New York Quality Fund Inc (MHN)

What this ETF is trying to do

This ETF, known by the ticker MHN, is listed on the NYSE. It is an exchange-traded fund (ETF) designed to provide exposure to specific types of holdings.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This only measures how much the share price has changed. For MHN, the one-year price return was approximately -2.37%. This means the share price went down over the last year. The three-year price return was approximately -5.42%.

• Total Return: This is a more complete measure because it includes the impact of distributions (cash payments). For MHN, the one-year total return was approximately 4.31%. Even though the share price dropped, the total return was positive because of the cash paid out to investors.

The current price is $10.30. Based on the one-year price return, the estimated price from roughly one year ago was approximately $10.55.

Income and distribution explanation

MHN provides cash distributions to investors. The distribution yield is approximately 6.5%. This number describes the cash payments relative to the current ETF price. These distributions usually happen monthly, and there were 13 distributions over the last 12 months.

It is important to remember that a high distribution yield does not mean the investor earned that same percentage as their total return. Distributions provide cash income, but they do not guarantee that your original investment (your principal) will stay the same value.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in the fund decreases. While a falling share price is not the same thing as NAV erosion, we use "erosion-risk scores" to measure the risk of this happening.

MHN has an erosion-risk score of 75, which is labeled as "mild price erosion." This is considered a mild level of risk. There is no severe erosion-risk flag for this fund.

Pros

• The fund has a positive one-year total return of approximately 4.31%.

• The fund has a positive year-to-date (YTD) total return of approximately 1.69%.

• It provides regular cash distributions (usually monthly).

Cons

• The share price has seen declines, with a one-year price return of approximately -2.37%.

• The three-year price return has been negative at approximately -5.42%.

Beginner takeaway

When you look at an ETF like MHN, don't just look at the distribution yield. A high yield can sometimes hide a falling share price. Investors often look for funds where the price stays steady or goes up, because if the share price collapses, it can eat away at the total value of your investment. Always look at the "total return" to see how both price changes and cash payments work together.