ETF Education Report: Amplify Natural Resources Dividend Income ETF (NDIV)

What this ETF is trying to do

The Amplify Natural Resources Dividend Income ETF (ticker: NDIV) is an exchange-traded fund that focuses on the natural resources sector. Based on its top holdings, it invests in various companies involved in energy and related industries.

What the numbers show

It is important to understand that there are two ways to look at how this ETF has performed: price return and total return.

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price changes and the cash distributions (dividends) paid out to investors.

According to the data:

• Year-to-Date (YTD): The price return is approximately 25.16%, while the total return is higher at approximately 35.28%.

• One Year: The price return was approximately 17.45%, and the total return was approximately 28.81%.

• Three Years: The price return was approximately 34.04%, and the total return was approximately 64.92%.

To give you an idea of price movement, the estimated price from roughly one year ago was $28.73. The current price is $33.74.

Income and distribution explanation

This ETF is designed to provide regular cash payments. The distribution yield is approximately 8.99%. This means the amount of cash distributed is about 8.99% relative to the ETF's price. The distributions are usually paid monthly, with 12 payments made over the last year.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases over time. Some investors worry that high payouts might cause this. However, for NDIV, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in this portfolio (note that this is a partial list):

• CRESCENT ENERGY CO CLASS A (6.30%)

• ANGLOGOLD ASHANTI PLC (5.82%)

• NORTHERN OIL & GAS INC (5.65%)

• PETROLEO BRASILEIRO SA PETROBRAS ADR (5.52%)

• TOTALENERGIES SE (5.24%)

• NOBLE CORP PLC CLASS A (5.17%)

• CVR PARTNERS LP (5.07%)

• BP PLC ADR (5.05%)

• SUNOCOCORP LLC COMMON UNITS (5.01%)

• KINETIK HOLDINGS INC (4.97%)

Pros

• The ETF has shown positive price returns and total returns over the last year and three years.

• It offers a high distribution yield for those seeking regular cash income.

Cons

• The ETF is focused on a specific sector (natural resources), which may behave differently than the broader market.

• High distribution yields can sometimes be misleading if the share price is not stable, though this specific fund currently shows no detected erosion.

Beginner takeaway

When looking at NDIV, remember that the total return is higher than the price return because it includes cash distributions. While the yield is high, always look at both the income and the share price movement to understand how the fund is performing.