What this ETF is trying to do

The Invesco Water Resources ETF (PHO) is an exchange-traded fund designed to invest in companies related to the water industry. It focuses on businesses involved with water resources and technology. Based on its top holdings, the fund includes companies like Ferguson Enterprises Inc, Ecolab Inc, and Waters Corp.

What the numbers show

When looking at PHO, it is important to distinguish between "price return" and "total return." Price return only tracks the change in the share price, while total return includes both price changes and any distributions paid out.

• Year-to-Date (YTD): The YTD price return is approximately -2.58%, while the YTD total return is approximately -2.16%.

• One-Year: The one-year price return is approximately -5.65%, and the one-year total return is approximately -5.14%.

• Three-Year: Over the last three years, the fund has seen growth. The three-year price return is approximately 28.66%, and the three-year total return is approximately 30.77%.

• Five-Year: The five-year total return is approximately 27.09%.

An estimated price from roughly one year ago was $72.70, compared to the current price of $68.59.

Income and distribution explanation

PHO provides a distribution yield of approximately 0.54%. This represents the cash distributions relative to the ETF price. The fund usually pays these out on a quarterly basis, with four payments recorded over the last 12 months. While these distributions provide cash income, they are relatively low compared to some other types of funds.

NAV erosion explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Regarding price movement, the fund has an erosion-risk score of 75, which is labeled as "mild price erosion." This means the market price has shown some signs of declining recently. However, there is no severe erosion-risk flag for this ETF.

Pros

• Long-term growth: The three-year and five-year total returns show positive historical performance.

• Specific industry focus: The fund provides exposure to a specific sector (water resources) through various specialized companies.

Cons

• Recent price declines: Both the year-to-date and one-year price returns have been negative.

• Lower income: The distribution yield is relatively small at 0.54%.

Beginner takeaway

PHO is a fund focused on the water industry. While it has shown strong total returns over a three-year period, its share price has faced recent declines. Investors should note that the distribution yield is low and that while there is "mild price erosion" in the share price, the data provided does not confirm whether the actual Net Asset Value (NAV) has eroded.