ETF Education Report: Nuveen California Municipal Value Fund (NCA)

What this ETF is trying to do

The Nuveen California Municipal Value Fund (NCA) is an ETF traded on the NYSE. While the specific investment strategy is not detailed in the data, it is categorized as an ETF asset type.

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 measures only how much the share price has changed.

• Total Return: This includes both the change in share price and any cash distributions (dividends) paid out.

For NCA, the numbers show different trends depending on how much time has passed:

• Year-to-Date (YTD): The price return is approximately -7.60%. However, the total return is higher at approximately -4.87%.

• One Year: The price return was approximately -8.21%, while the total return was approximately -4.58%.

• Three Years: The price return was approximately 1.47%, but the total return was much higher at approximately 14.27%.

• Five Years: The five-year total return was approximately -2.77%.

To visualize the price change, the current price is $8.27. An estimated price from roughly one year ago was approximately $9.01.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the "distribution yield." NCA has a distribution yield of approximately 4.29%. The trailing distributions are $0.355. These payments usually happen monthly, often on a Friday.

It is important to remember that a high distribution yield does not mean the investor earned that same percentage as their total return. Total return is the most accurate way to see how much value was actually gained or lost over time.

NAV erosion explanation

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

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

Pros

• The fund provides regular monthly distributions.

• Over a three-year period, the total return was positive at approximately 14.27%.

Cons

• The one-year and year-to-date price returns have been negative.

• The five-year total return has been negative.

Beginner takeaway

When studying an ETF like NCA, always look at the total return rather than just the price or the distribution yield. The total return gives you a complete picture by combining share price changes and cash payments. Also, keep in mind that while distributions provide cash income, they do not guarantee that the share price will stay stable.