What this ETF is trying to do

The VIRTUS SEIX AAA Private Credit CLO ETF (ticker: PCLO) is an exchange-traded fund traded on the NYSE. Based on its name, this fund focuses on private credit. An ETF is a way for investors to buy a collection of different assets all at once.

What the numbers show

When looking at an ETF, it is important to look at two different types of returns: price return and total return.

• Price return only tracks how much the share price changes.

• Total return tracks the share price change *plus* any cash payments (distributions) you received.

For PCLO, the current price is $24.92. An estimated price from roughly one year ago was $24.97.

If you look only at the price return, the shares have gone down slightly. Over the last year, the price return was -0.23%. Year-to-date (YTD), the price return is -0.19%.

However, when you look at the total return, the numbers are positive. The one-year total return was 4.93%, and the YTD total return was 3.59%. This shows that even though the share price dropped a little bit, the cash payments helped the overall value grow.

Income and distribution explanation

Some investors look for ETFs that pay them regular cash. This is called a distribution yield. For PCLO, the distribution yield is approximately 5.05%. Over the last year, the fund paid out $1.26 per share in distributions. These payments happened 12 times, and the fund usually pays out monthly.

It is important to remember that a high distribution yield does not guarantee you will make money. You must always look at the total return to see how the investment performed overall.

NAV erosion explanation

NAV erosion happens when the actual value of the assets inside the ETF starts to drop. This can cause the share price to fall over time.

StockValueFinder uses an erosion-risk score to measure this risk. PCLO has an erosion-risk score of 94, which is labeled as "Stable / sideways" with a "good" severity rating. There is no "severe erosion-risk flag" for this ETF, meaning the data does not show a major warning about the fund's value dropping significantly.

Pros

• Regular Income: The fund provides monthly cash distributions.

• Positive Total Return: Even with a small share-price decline, the total return has been positive over the last year.

• Stable Risk Score: The erosion-risk score suggests the fund's value is currently stable.

Cons

• Share-Price Decline: The price return has been slightly negative for both the year-to-date period and the last full year.

• No Holding Data: No specific top holdings were provided in the current report.

Beginner takeaway

When you look at PCLO, don't just look at the share price or just the cash payments. The share price has dipped slightly, but the total return is positive because of the monthly cash distributions. Always check the difference between price return and total return to see the full picture.