ETF Education Report: Pimco New York Municipal Income Fund II (PNI)

What this ETF is trying to do

PNI is an Exchange Traded Fund (ETF) that trades on the NYSE. While the specific investment strategy is not detailed in the provided data, it is categorized as a municipal income fund.

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.

• Total Return: This includes both the share price changes and the cash distributions (dividends) paid out to investors.

For PNI, the numbers show different trends depending on how much time has passed:

• Year-to-Date (YTD): The price return is approximately -11.03%, while the total return is approximately -7.57%.

• One Year: The price return is approximately -12.05%, while the total return is approximately -7.46%.

• Three Years: The price return is approximately -3.16%, but the total return is significantly higher at approximately 12.49%.

To visualize the price change, an investor's share price was estimated to be roughly $6.97 one year ago. The current price is $6.13.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 5.77%. This means the fund paid out about $0.35 per share over the last 12 months. These payments usually happen monthly, often on a Thursday.

It is important to remember that a high distribution yield does not guarantee an investor will make money. Even if an ETF pays out cash, the share price could still go down.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. While a falling share price is not the same thing as NAV erosion, we use "erosion scores" to measure risk.

PNI has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and does not mean the fund's value has definitely collapsed. There is no "severe erosion-risk flag" for this ETF.

Pros

• The three-year total return is positive at approximately 12.49%, showing that distributions helped improve the overall result compared to the share price alone.

• The fund provides regular monthly distributions.

Cons

• The one-year and year-to-date price returns are negative, meaning the share price has declined.

• The five-year total return is approximately -32.22%.

Beginner takeaway

When looking at PNI, notice how the total return is higher than the price return in several periods. This happens because the cash distributions help offset some of the losses from the falling share price. However, investors should always look at both the price movement and the total return to get a full picture of how an ETF is performing.