ETF Education Report: PGHY

What this ETF is trying to do

The INVESCO GLOBAL EX-US HIGH YIELD CORPORATE BOND ETF (ticker: PGHY) is an exchange-traded fund. Based on its name, it focuses on high-yield corporate bonds from companies located outside of the United States.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This measures only the change in the share price. For PGHY, the one-year price return was approximately -4.62%. The year-to-date (YTD) price return was approximately -4.45%.

• Total Return: This includes both the share price changes and the money paid out to investors through distributions. Because of these payments, the total return figures are higher than the price returns. For example, the one-year total return was approximately 2.32%, and the YTD total return was approximately 0.63%. Over three years, the total return was approximately 26.72%.

To visualize the price change: an estimated price from roughly one year ago was $19.93, and the current price is $19.01.

Income and distribution explanation

This ETF provides regular cash payments, known as distributions. The distribution yield is approximately 7.32%. This means the amount of cash distributed is about 7.32% relative to the current ETF price. These distributions usually happen monthly, with 12 payments made over the last year.

It is important to remember that a high distribution yield does not mean you have earned that same amount in total return. Total return is the most complete way to see how the investment performed overall.

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 erosion, they are not the same thing.

StockValueFinder uses an "erosion-risk score" to measure this risk. PGHY has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag for this ETF.

Pros

• The ETF has a high income rating grade of "A."

• The three-year total return shows significant growth compared to the price-only return.

Cons

• The share price has seen some declines, as shown by the negative one-year and YTD price returns.

Beginner takeaway

For new investors, the main lesson here is to look at both price and total returns. While the share price of PGHY has gone down recently, the total return (which includes the cash paid out to you) has remained positive for the year and over the last three years. Always remember that high yields are one part of the story, and looking at total return provides a clearer picture of performance.