Share-split context: A minor share adjustment was recorded on Nov 5, 2024 with coefficient 1.012. Current price-return figures are already normalized to the current share basis.

ETF Education Report: RiverNorth/DoubleLine Strategic Opportunity Fund Inc (OPP)

What this ETF is trying to do

This ETF, trading under the ticker symbol OPP on the NYSE, is an investment fund designed to provide investors with access to a specific strategy. While the provided data does not list individual company holdings, it is categorized as a standard ETF rather than a leveraged or crypto-related fund.

What the numbers show

When looking at an ETF, it is important to separate "price return" from "total return."

• Price Return: This measures only the change in the share price. For OPP, the one-year price return was approximately -19.49%. The year-to-date (YTD) price return was approximately -13.21%.

• Total Return: This includes both the share price changes and the money paid out to investors through distributions. The one-year total return was approximately -7.24%, and the YTD total return was approximately -3.46%.

Interestingly, while the short-term price returns have been negative, the three-year total return was approximately 39.46%. This shows how distributions can change the overall result compared to just looking at the share price.

Note: This ETF has a history of forward splits. In a forward split, each old share becomes multiple new shares, and the price per share falls proportionally. This does not change how much of the fund you own; it just changes the number of shares you hold.

Income and distribution explanation

OPP has a high distribution yield of approximately 16%. This means the fund pays out a significant amount of cash relative to its share price. These distributions usually happen monthly, with 12 payments recorded over the last year. Because these payments are frequent, they can provide regular cash income to an investor.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). While a falling share price is not the same thing as NAV erosion, we use "erosion scores" to measure risk.

OPP has an erosion score of 55, which is labeled as "moderate price erosion." This is a measurement of risk regarding how the share price has behaved over time. It is not a guarantee that the fund's value will continue to drop, but it is an indicator for investors to watch.

Pros

• High Yield: The fund offers a high distribution yield of 16%.

• Regular Income: Distributions are frequent, occurring usually on a monthly basis.

• Three-Year Total Return: The three-year total return shows a positive figure of approximately 39.46%.

Cons

• Price Decline: The share price has seen significant declines over the last year and year-to-date.

• Moderate Erosion Risk: The fund has a moderate erosion-risk score.

Beginner takeaway

When you see an ETF with a very high distribution yield, it is important to look at the total return, not just the income. A high yield can provide cash, but if the share price is falling significantly, the total value of your investment might still go down. Always distinguish between the cash you receive (distributions) and the change in the share price (price return).