ETF Education Report: Virtus AllianzGI Dividend Interest & Premium Strategy Fund (NFJ)

What this ETF is trying to do

The NFJ ETF is an exchange-traded fund listed on the NYSE. Based on its name, it focuses on dividend interest and premium strategies. This type of fund generally looks for ways to provide income to its investors.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: 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* the money paid out through distributions.

For NFJ, the numbers show growth in both areas:

• Year-to-Date (YTD): The price return is approximately 18.39%, while the total return is approximately 26.20%.

• One Year: The price return is approximately 18.29%, while the total return is approximately 29.08%.

• Three Years: The price return is approximately 29.32%, while the total return is approximately 70.12%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $12.90, and the current price is $15.26.

Income and distribution explanation

This ETF has a distribution yield of approximately 7.99%. This number describes the cash distributions relative to the ETF's price. The fund has paid out $1.22 in trailing distributions over the last year. These payments usually happen quarterly, and most recently, they have been paid on Mondays.

It is important to remember that a high distribution yield is not the same thing as total return. While distributions provide cash, they are separate from the growth of the share price itself.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly over time. Some investors worry that high payouts might cause this. However, for NFJ, the erosion-risk score is 100, which is labeled as "No price erosion detected." There is no severe erosion-risk flag for this fund.

Pros

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

• The total return (which includes distributions) has been higher than the price return alone.

• The erosion-risk measurement is considered "good."

Cons

• The fund's top holdings are not currently listed in the provided data.

• As with all investments, distributions do not guarantee that your original investment (principal) will stay the same value.

Beginner takeaway

When looking at NFJ, you can see a difference between the share price growth and the total return. The total return is higher because it includes the cash distributions paid to investors. Currently, the data shows no signs of price erosion. Always remember that high yields are one part of the story, and looking at total return gives a fuller picture of how an ETF has performed.

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*Disclaimer: This report is for educational purposes only. It does not provide financial advice and does not recommend buying, selling, or holding this or any other security.*