What this ETF is trying to do

The SIMPLIFY MBS ETF (ticker: MTBA) is an exchange-traded fund traded on the NYSE.

What the numbers show

Currently, the share price of this ETF is $47.69. The estimated price from roughly one year ago was approximately $50.62.

When looking at performance, it is important to understand two different numbers: price return and total return. Price return only tracks how much the share price itself changes. Total return includes both the share price change and any cash distributions paid to you.

Over the last year, the one-year price return was approximately -5.79%. However, the one-year total return was only about -0.09%. This shows that while the share price went down, the cash payments helped offset some of that loss.

For the year-to-date (YTD) period, the price return is approximately -5.40%, and the total return is approximately -1.67%.

To visualize this, if you had invested $10,000 into the share price alone roughly one year ago, your investment would have decreased due to the -5.79% price return.

Income and distribution explanation

This ETF provides cash distributions. The distribution yield is approximately 6.14%, which describes the cash paid out relative to the ETF's price. Over the last year, the trailing distributions were about $2.93 per share.

These payments are usually made monthly, and there were 12 payouts in the last year. It is important to remember that a high distribution yield does not guarantee you will earn that much as a total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the value of the actual assets held within the fund. This ETF has an erosion-risk score of 75, which is labeled as "mild price erosion." This means there is a mild risk measurement regarding the stability of the fund's value. However, the ETF does not have a severe erosion-risk flag.

Pros

• Provides regular income through distributions that are usually paid monthly.

• Has a distribution yield of approximately 6.14%.

Cons

• The share price has shown a decline over the last year.

• There is a mild erosion-risk score of 75.

Beginner takeaway

When looking at an ETF like MTBA, don't look at the yield alone. While the monthly cash payments can be helpful, the actual share price can still go down. Always look at both the price return and the total return to see how the investment is performing overall.