Understanding the Invesco Floating Rate Municipal Income ETF (PVI)

What this ETF is trying to do

The Invesco Floating Rate Municipal Income ETF, known by its ticker symbol PVI, is an exchange-traded fund (ETF). While the specific holdings are not listed in this report, this type of fund generally focuses on municipal income.

What the numbers show

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

• Price Return only tracks how much the share price itself has changed.

• Total Return includes both the change in share price and the money paid out through distributions.

For PVI, here is how the numbers look:

• Year-to-Date (YTD): The price return is approximately -0.10%, but the total return is approximately 1.49%.

• One Year: The price return was approximately 24.44%, while the total return was approximately 2.49%.

• Three Years: The price return was approximately 30.22%, while the total return was approximately 7.92%.

To give you an idea of price movement, the estimated price from roughly one year ago was $24.83. The current price is $24.90.

Income and distribution explanation

Some investors look for ETFs that pay out cash regularly. This is called the distribution yield. For PVI, the distribution yield is approximately 2.21%.

The fund usually pays out money monthly, with 12 payments made over the last year. Most of these payments occurred on Mondays. It is important to remember that a high distribution yield is not the same thing as total return. Distributions provide cash income, but they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Investors often care about this because they want their principal (the money they originally put in) to remain stable.

PVI has an erosion-risk score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present. This means the fund's price trends do not currently show signs of significant deterioration according to these measurements.

Pros

• The fund provides regular monthly distributions.

• The total return figures are higher than the price return figures, meaning distributions have added value to the overall performance.

• The erosion-risk measurements suggest a stable trend.

Cons

• The year-to-date price return is slightly negative, meaning the share price has dipped slightly even though the total return is positive.

• The top holdings are not provided in this data set, so the specific companies or bonds held are unknown.

Beginner takeaway

When studying PVI, remember that the share price and the total return tell different stories. While the share price might move up or down slightly, the total return shows how much value was created when you include the monthly cash payments. Always look at both numbers to get a full picture of how an ETF is performing.