Understanding the Nuveen AMT-Free Quality Municipal Income Fund (NEA)

What this ETF is trying to do

The Nuveen AMT-Free Quality Municipal Income Fund (ticker: NEA) is an ETF listed on the NYSE. While the specific investment strategy details are not provided in this report, funds of this type generally focus on providing income to investors.

What the numbers show

It is important to understand that "price return" and "total return" tell different stories. Price return only tracks how the share price changes. Total return includes both the price change and the cash distributions paid out to investors.

Based on the data:

• Year-to-Date (YTD): The price return is approximately -11.35%. However, the YTD total return is approximately -6.49%.

• One Year: The one-year price return is approximately -8.52%, while the one-year total return is approximately -1.78%.

• Three Years: The three-year price return is approximately 1.98%, but the three-year total return is much higher at approximately 25.44%.

To visualize the price change, we can look at an estimate. The current price is $10.31. The estimated price from roughly one year ago was approximately $11.27.

Income and distribution explanation

This ETF focuses on regular cash payments. The distribution yield is approximately 7.91%. This means the fund paid out a significant amount of cash relative to its share price over the last year. These distributions usually happen monthly, with Friday being the most common day for payments.

It is important to remember that a high distribution yield does not mean you have earned that much in total return. You must look at the total return figure to see how the share price and distributions worked together.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. StockValueFinder uses an "erosion-risk score" to measure this risk.

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

Pros

• The fund provides a high distribution yield of approximately 7.91%.

• It offers frequent cash payments, usually on a monthly basis.

• The three-year total return has been positive at approximately 25.44%.

Cons

• The share price has seen declines in both the one-year and year-to-date periods.

• The five-year total return is approximately -12.28%.

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

Beginner takeaway

When looking at an ETF like NEA, don't just look at the high distribution yield. A high yield can sometimes be accompanied by a falling share price. Always compare the "price return" (the change in the cost of one share) with the "total return" (the change in value including the cash paid to you) to get the full picture.