ETF Education Report: Nuveen New York Select Tax-Free Income Portfolio (NXN)

What this ETF is trying to do

The NXN ETF is an investment fund listed on the NYSE. While the specific holdings are not listed in this report, funds like this generally aim to provide income to investors through tax-free sources.

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.

• One-Year Performance: The one-year price return was approximately 5.75%. However, the one-year total return was higher, at approximately 10.38%.

• Year-to-Date (YTD): Both the YTD price return and the YTD total return are approximately 0.58%.

• Three-Year Performance: The three-year price return was approximately 1.08%, while the three-year total return was approximately 14.64%.

To see how the share price changed, we can look at the estimated price from roughly one year ago, which was $11.48. The current price is $12.14. If you had invested $10,000 into the shares alone one year ago, your investment would have grown to approximately $10,575 based on the share-price movement before any distributions were added.

Income and distribution explanation

This ETF provides cash distributions. The distribution yield is approximately 4.15%. This number describes the cash paid out relative to the current share price. These payments usually happen monthly, with 12 payments recorded over the last year.

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. Distributions provide cash income, but they do 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 drops significantly 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 the heavy price deterioration that leads to high erosion risk.

Pros

• The total return figures are higher than the price return figures, meaning distributions have added value to the overall return.

• The erosion-risk measurements suggest a stable pattern rather than a collapsing price.

Cons

• Total return and price return are different; investors must look at both to see the full picture.

• Distributions provide cash but do not protect the original amount invested from share-price declines.

Beginner takeaway

When looking at ETFs that pay regular income, don't just look at the yield. A high yield can sometimes be misleading if the share price is falling quickly. Income investors often prefer funds that stay "sideways" (the price stays relatively flat) or move slightly up, because this helps protect their principal while they collect cash payments. Always distinguish between the change in share price and the total return including distributions.