Simplify National Muni Bond ETF (NMB)

The Simplify National Muni Bond ETF (NMB) is designed to provide investors with exposure to municipal bonds. It is characterized by a distribution yield of approximately 5.27% and a recent trend of declining share prices.

What the Numbers Show

The current price of NMB is $22.97. To understand how the fund has performed, we look at two different types of returns:

• Price Return: This measures only the change in the share price. Over the last year, the price return was -9.49%. Year-to-date, the price return is -8.16%.

• Total Return: This reflects the overall return, including the cash distributions paid to investors. The one-year total return was -4.94%, and the year-to-date total return is -4.68%.

Because the total return is higher (less negative) than the price return, it shows that the cash distributions helped offset some of the decline in the share price.

For a simple example, if an investor had put $10,000 into the fund based on the estimated price from roughly one year ago ($25.38), the value of those shares alone would have decreased by approximately 9.49% over the year, regardless of any cash payments received.

Income and Distribution Explanation

NMB usually pays distributions monthly. In the last 12 months, it made 11 payments totaling $1.21 per share. This results in a distribution yield of approximately 5.27%.

It is important for beginners to remember that a high distribution yield does not guarantee a profit. As seen with NMB, it is possible to receive regular cash payments while the share price of the ETF is falling.

Price and NAV Erosion Explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Regarding price-based evidence, NMB has an erosion-risk score of 75, which is labeled as "Mild price erosion." This means the fund has seen some deterioration in its market price, but it has not triggered a severe erosion-risk flag.

Pros

• Regular Income: The fund provides frequent cash distributions, usually on a monthly basis.

• Diversification: It offers a way to invest in municipal bonds.

Cons

• Price Decline: Both the one-year and year-to-date price returns are negative.

• Negative Total Return: Even with distributions included, the total return over the last year remained negative.

Beginner Takeaway

NMB is an ETF that pays out regular income, but its share price has been dropping. While the distributions make the total loss smaller than the price loss, the overall value of the investment has declined over the past year. Investors often care about "principal stability," which means they want their original investment amount to stay steady even while they collect income. In this case, the principal has decreased.