MUNC: NORTHERN TRUST 2045 TAX-EXEMPT DISTRIBUTING LADDER ETF
ETF Education Report: MUNC
What this ETF is trying to do
The Northern Trust 2045 Tax-Exempt Distributing Ladder ETF (MUNC) is an exchange-traded fund. Based on its name and holdings, it focuses on tax-exempt distributions. It holds a variety of different debt securities, such as utility and municipal bonds, to provide income to investors.
What the numbers show
When looking at an ETF, it is important to separate "price return" from "total return."
• Price Return: This measures only the change in the share price. For MUNC, the one-year price return was approximately -4.26%. The year-to-date (YTD) price return was approximately -4.45%.
• Total Return: This includes the share price change plus any distributions (cash payments) received. The one-year total return was approximately -1.14%, and the YTD total return was approximately -2.37%.
Because the total return numbers are higher than the price return numbers, it shows that the distributions helped offset some of the share-price decline.
We can also look at an estimated price from roughly one year ago. The current price is $98.20, while the estimated price from roughly one year ago was approximately $102.57.
Income and distribution explanation
This ETF provides cash to investors through distributions. The distribution yield is approximately 3.34%. This means the annual cash payments are about 3.34% of the current share price. These distributions usually happen monthly, with 12 payments recorded over the last year.
It is important to remember that a high distribution yield does not mean an investor earned that same amount as total return. Total return is the most complete way to see how the investment performed overall.
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 market price can sometimes look like erosion, they are not the same thing.
StockValueFinder uses an "erosion-risk score" to measure this risk. MUNC has an erosion score of 94, which is labeled as "Stable / sideways," and the severity is rated as "good." There is no severe erosion-risk flag for this ETF.
Top Holdings
The following are the top holdings in the fund (note that this is a partial list):
• UTILITY DEBT SECURITIZATION AUTH N Y 5%: 3.43%
• LOS ANGELES CALIF DEPT WTR & PWR REV 5%: 3.33%
• SUN PRAIRIE WIS 5%: 3.32%
• NEW JERSEY ST TRANSN TR FD AUTH 5%: 3.31%
• IOWA FIN AUTH REV 5%: 3.13%
• WAKE CNTY N C 5%: 3.07%
• NEW YORK N Y 5%: 2.86%
• KENTUCKY ST PPTY & BLDGS COMMN REVS 5%: 2.22%
• ROUND ROCK TEX INDPT SCH DIST 5%: 2.13%
• MASSACHUSETTS ST 5%: 1.93%
Pros
• The fund provides regular monthly distributions.
• The erosion-risk score suggests the fund is currently stable/sideways.
Cons
• The ETF has experienced a share-price decline over the last year.
• Both the one-year and YTD total returns have been negative.
Beginner takeaway
When looking at MUNC, remember that the share price has gone down recently. While the monthly cash distributions help improve the "total return," they have not been enough to make the overall return positive for the year. Always look at total return, not just the distribution yield, to see how an ETF is performing.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | UTILITY DEBT SECURITIZATION AUTH N Y 5% | n/a | 3.43% |
| 2 | LOS ANGELES CALIF DEPT WTR & PWR REV 5% | n/a | 3.33% |
| 3 | SUN PRAIRIE WIS 5% | n/a | 3.32% |
| 4 | NEW JERSEY ST TRANSN TR FD AUTH 5% | n/a | 3.31% |
| 5 | IOWA FIN AUTH REV 5% | n/a | 3.13% |
| 6 | WAKE CNTY N C 5% | n/a | 3.07% |
| 7 | NEW YORK N Y 5% | n/a | 2.86% |
| 8 | KENTUCKY ST PPTY & BLDGS COMMN REVS 5% | n/a | 2.22% |
| 9 | ROUND ROCK TEX INDPT SCH DIST 5% | n/a | 2.13% |
| 10 | MASSACHUSETTS ST 5% | n/a | 1.93% |