ETF Education Report: Nuveen California Select Tax-Free Income Portfolio (NXC)

What this ETF is trying to do

The Nuveen California Select Tax-Free Income Portfolio (NXC) is an exchange-traded fund (ETF). While the specific investment strategy is not detailed in the provided data, ETFs like this one generally aim to provide income to investors.

What the numbers show

It is important to understand 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 the cash distributions paid out to investors.

• Year-to-Date (YTD): The YTD price return is approximately 0.68%. The YTD total return is also approximately 0.68%.

• One Year: The one-year price return was approximately 1.72%. However, the one-year total return was higher, at approximately 6.00%. This shows that distributions added to the overall value. An estimated price from roughly one year ago was approximately $13.07.

• Three Years: Over three years, the share-price decline (price return) was approximately -3.35%. Despite this drop in share price, the three-year total return was approximately 9.18%.

Income and distribution explanation

This ETF provides cash distributions. The distribution yield is approximately 4.03%. This number describes the cash paid out relative to the current share price. These distributions usually happen monthly, with 12 payments recorded over the last year. Most recent payments have occurred on Mondays.

It is important to remember that receiving regular cash distributions does not guarantee that your original investment (your principal) will stay the same value.

NAV erosion explanation

"NAV" stands for Net Asset Value, which is the actual value of the assets held by the fund. "NAV erosion" happens when the value of those underlying assets declines over time.

For this ETF, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion-severity is described as "good," and there is no severe erosion-risk flag present. This suggests that the fund's value has not shown signs of significant deterioration according to these specific risk measurements.

Pros

• The one-year total return (6.00%) was higher than the one-year price return (1.72%), showing the impact of distributions.

• The erosion-risk measurements suggest a stable or sideways trend rather than a rapid decline.

Cons

• The three-year price return shows a share-price decline of approximately -3.35%.

• A falling share price means the market value of the investment has decreased, even if total returns are positive.

Beginner takeaway

When looking at an ETF, always look at both the price return and the total return. A share price can go down while the total return stays positive because of the cash distributions paid to you. High distribution yields can be helpful for income, but they do not protect you from a falling share price. Always check the erosion-risk score to understand how stable the fund's value appears to be.