ETF Education Report: Nuveen Securitized Income ETF (NSCI)

What this ETF is trying to do

The Nuveen Securitized Income ETF (ticker: NSCI) is an exchange-traded fund listed on the NYSE. While the specific investment strategy is not detailed in the provided data, ETFs like this are generally designed to provide investors with exposure to specific types of income-producing assets.

What the numbers show

When looking at how an ETF performs, it is important to look at two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For NSCI, the year-to-date (YTD) price return is approximately -0.68%. This means the share price has gone down slightly since the start of the year.

• Total Return: This is a more complete measure because it includes both price changes and the money paid out to investors (distributions). The YTD total return for NSCI is approximately 2.53%.

Because the total return (2.53%) is higher than the price return (-0.68%), we can see that the distributions helped offset the slight drop in the share price.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash, known as distributions.

• Distribution Yield: NSCI has a distribution yield of approximately 4.30%. This represents the cash distributions relative to the current share price of $25.00.

• Frequency: This ETF usually pays out monthly. In the last 12 months, there were 11 payouts.

• Trailing Distributions: The amount paid out over the last year was approximately $1.07 per share.

It is important to remember that a high distribution yield does not guarantee that an investor will earn that same percentage as a total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. While some investors worry about this, there is no "severe erosion-risk flag" for NSCI. The data provided does not include an erosion score, as there is insufficient verified price history to calculate one.

Pros

• The ETF provides a regular distribution (usually monthly).

• The YTD total return is positive, even though the share price itself has declined slightly.

Cons

• The YTD price return is negative, meaning the share price has lost value since the beginning of the year.

• The income rating grade for this ETF is a "D."

Beginner takeaway

When studying an ETF like NSCI, don't just look at the share price or just look at the dividend yield. The total return is the most important number to watch because it combines both the price movement and the cash payments. In this case, while the share price went down a little bit, the total return stayed positive because of the distributions.