ETF Education Report: ProShares Online Retail ETF (ONLN)

What this ETF is trying to do

The ProShares Online Retail ETF (ticker: ONLN) focuses on companies involved in online shopping. It holds a variety of businesses that sell goods over the internet. According to its top holdings, the fund has significant exposure to companies like Amazon.com Inc (24.43%), Alibaba Group Holding Ltd ADR (8.48%), and eBay Inc (8.45%). Because the list of holdings provided is partial, these represent the largest companies in the fund rather than all of them.

What the numbers show

When looking at an ETF, it is important to distinguish 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 distributions paid out to investors.

• Year-to-Date (YTD): The price return is approximately -5.76%, while the total return is approximately -5.56%.

• One-Year: The price return was approximately -9.05%, and the total return was approximately -8.77%.

• Three-Year: The fund has seen significant growth over a longer period, with a price return of approximately 74.23% and a total return of approximately 76.55%.

• Five-Year: The five-year total return is approximately -19.10%.

To visualize the one-year change, the estimated price from roughly one year ago was $61.38. The current price is $55.83.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. This ETF has a distribution yield of approximately 0.30%. Over the last 12 months, it made three distributions. The frequency of these payments is described as irregular or less frequent. It is important to remember that a distribution yield tells you how much cash was paid out relative to the price, but it is not the same as your total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes be related to this, they are not the same thing. StockValueFinder uses an "erosion-risk score" to measure this risk. This ETF has an erosion score of 75, which is labeled as "mild price erosion." There is no severe erosion-risk flag for this ETF.

Pros

• The fund has shown strong total returns over a three-year period.

• It provides exposure to many different online retail companies in one fund.

Cons

• The fund has experienced a share-price decline over the last year.

• The five-year total return is currently negative.

Beginner takeaway

When studying ONLN, notice the difference between short-term price declines and long-term growth. While the one-year price return is down, the three-year total return has been positive. Always remember that looking at a distribution yield alone does not tell you how much money the investment is actually making or losing.