Understanding the Nuveen ESG 1-5 Year U.S. Aggregate Bond ETF (NUSA)

What this ETF is trying to do

The Nuveen ESG 1-5 Year U.S. Aggregate Bond ETF (NUSA) is an exchange-traded fund that focuses on U.S. bonds. These are essentially loans made to companies or governments that have a duration of one to five years. This specific fund also follows "ESG" guidelines, which means it considers environmental, social, and governance factors when choosing its investments.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and any cash payments (distributions) made to investors.

Here is what the data shows for NUSA:

• Year-to-Date (YTD): The price return is approximately -3.40%. However, the total return is slightly higher at -0.56%.

• One Year: The price return was approximately -3.46%, while the total return was positive at about 0.34%.

• Three Year: The price return was approximately 0.20%, but the total return was much higher at about 12.84%.

To visualize the price change, an investor's share price was estimated to be roughly $23.40 one year ago, compared to the current price of $22.59.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the "distribution yield." NUSA has a distribution yield of approximately 3.97%. This fund usually pays out money monthly, having made 12 payments over the last year.

It is important to remember that a high distribution yield is not the same thing as total return. While these payments provide cash, they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. StockValueFinder uses an "erosion-risk score" to measure this risk. NUSA has an erosion score of 94, which is labeled as "Stable / sideways." This means the fund does not currently show signs of significant erosion risk. There is no severe erosion-risk flag for this ETF.

Pros

• The fund has a history of positive total returns over one-year and three-year periods.

• It provides regular monthly income.

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

Cons

• The share price has seen some declines (price return) over the year-to-date and one-year periods.

• There is no data provided regarding specific top holdings or the number of companies held in the portfolio.

Beginner takeaway

When studying NUSA, notice how the total return is often better than the price return. This happens because the cash distributions help offset some of the drops in the share price. Always remember to look at both the price movement and the total return to get a full picture of how an ETF is performing.