What this ETF is trying to do

The Invesco Dorsey Wright Utilities Momentum ETF (PUI) is designed to invest in the utilities sector. It focuses on "momentum," which generally means looking for stocks that have shown a strong price trend. Based on its top holdings, PUI invests in companies like Atmos Energy Corp (4.36%), Oneok Inc (4.33%), and NiSource Inc (4.17%).

What the numbers show

The performance of PUI varies depending on the time frame you look at:

• Short Term: The year-to-date (YTD) price return is -2.83%. Over the last year, the price return was -10.71%.

• Long Term: The three-year price return is 42.34%, and the five-year total return is 42.51%.

It is important to distinguish between price return (the change in the share price) and total return (which includes the share price change plus distributions). For example, the one-year price return was -10.71%, but the one-year total return was slightly better at -8.77%.

For a simple example, if you had invested $10,000 based on the estimated price from roughly one year ago ($47.43), the price-only decline of -10.71% would mean your investment's market value would be approximately $8,929 before accounting for any distributions.

Income and distribution explanation

PUI provides cash distributions to investors. It usually pays these quarterly, with four payments made in the last 12 months. The distribution yield is 2.28%.

For new investors, it is important to remember that a distribution yield is not the same as a total return. A yield tells you how much cash the fund pays out relative to its price, but it does not guarantee that your original investment (the principal) will stay the same or grow.

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.

However, the data does provide a price-based erosion-risk measurement. PUI has an erosion score of 75, which is labeled as "mild price erosion." The severe erosion-risk flag is false, meaning it did not trigger the highest level of warning.

Pros

• Long-term growth: The fund has shown strong three-year and five-year returns.

• Regular income: It provides quarterly cash distributions.

• Diversification: It holds 39 different companies across the utilities sector.

Cons

• Recent decline: Both the YTD and one-year price returns are negative.

• Mild erosion risk: The fund has a "mild" price erosion label.

Beginner takeaway

PUI is a utilities-focused fund that has performed well over several years but has struggled over the last 12 months. While it pays a regular distribution, the recent price decline shows that income does not always protect against a falling share price.