What this ETF is trying to do

The OBRA DEFENSIVE HIGH YIELD ETF (ticker: ODHY) is an exchange-traded fund (ETF). Based on its name, it focuses on "defensive" investments and "high yield," which usually means the fund seeks to provide regular income payments while trying to protect against large market drops.

What the numbers show

To understand how this ETF has performed, we look at two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. Over the last year, the one-year price return was -2.94%. This means the price of a single share dropped slightly. For this year so far (YTD), the price return is -3.42%.

• Total Return: This measures the overall return, which includes both the change in share price and any distributions (like cash payments) paid to investors. The one-year total return was 2.25%, and the YTD total return is 0.48%.

To put this into perspective with a simple example: If you had invested $10,000 worth of shares in this ETF roughly one year ago, the share-price only would be worth approximately $9,730 today (based on the -2.94% price return). However, because the total return was 2.25%, your overall value would be higher than that because it includes the cash distributions you received during the year.

Income and distribution explanation

This ETF provides a distribution yield of 5.35%. This number tells you how much cash the fund pays out relative to its current price. The fund usually pays these distributions on a monthly basis, with 12 payouts occurring over the last year.

It is important for new investors to know that a high distribution yield does not automatically mean the total return will be high. While these payments provide regular cash income, they do not guarantee that the original amount of money invested (the principal) will stay the same. It is possible for an ETF to pay out a high yield while its share price continues to decline.

NAV erosion explanation

StockValueFinder uses an "erosion-risk score" to help investors understand if the value of the fund's underlying assets might be shrinking over time. This is called "NAV erosion."

For ODHY, the erosion score is 94, which is labeled as "Stable / sideways," and the severity is rated as "good." These numbers are measurements used to identify risk; they do not prove that the fund's value has definitely collapsed or eroded. A falling share price does not always mean NAV erosion is happening.

Pros

• The fund provides regular monthly distributions for income.

• It has a "good" erosion severity rating, suggesting its underlying value is relatively stable.

Cons

• Both the one-year and YTD price returns are negative, meaning the share price has declined in those timeframes.

Beginner takeaway

When looking at ODHY, it is important to distinguish between the share price and the total return. While the share price has gone down over the last year (a negative price return), the total return remains positive because of the distributions paid out to investors. This shows that while the "sticker price" of the shares fell, the investor still received some value back through regular payments.