ETF Education Report: Pimco New York Municipal Income Fund III (PYN)

What this ETF is trying to do

The PYN ETF is an investment fund listed on the NYSE. While specific investment goals are not detailed in this report, it is categorized as an ETF.

What the numbers show

It is important to understand the difference between price return and total return. Price return only tracks how much the share price changes. Total return includes both the price change and any distributions (cash payments) made to investors.

According to the data:

• Year-to-Date (YTD): The price return is -9.17%. However, the YTD total return is -6.25%.

• One Year: The one-year price return is -14.88%. The one-year total return is -10.33%.

• Three Years: The three-year price return is -40.87%, while the three-year total return is -31.07%.

To see how much the price has changed, we can look at an estimated price from roughly one year ago, which was approximately $6.05. The current price is $5.15.

If you had invested $10,000 into this ETF one year ago based on the share price alone, your investment would have dropped to approximately $8,512 before accounting for any cash distributions.

Income and distribution explanation

This ETF has a distribution yield of approximately 5.78%. This represents the cash distributions relative to the current ETF price. The fund usually pays out monthly, with 12 distributions recorded over the last year.

It is important to remember that a high distribution yield does not mean an investor earned that percentage as their total return. While distributions provide cash income, they do not guarantee that your original investment (your principal) will stay the same value.

NAV erosion explanation

This ETF has a severe erosion-risk flag. The data shows an erosion score of 10, which is labeled as "Severe price erosion."

"NAV erosion" refers to a decline in the value of the fund's underlying assets. When an ETF's share price falls significantly—for example, dropping from an estimated $6.05 to $5.15—it can result in the loss of principal. For income investors, a fund that collapses in price is often less desirable than one where the price stays steady or goes up slightly, because a falling price can cancel out the benefits of the cash income received.

Pros

• The fund provides regular cash distributions (usually monthly).

• It offers a distribution yield of approximately 5.78%.

Cons

• The fund shows a severe erosion-risk flag.

• There has been significant share-price decline over the last one, three, and YTD periods.

• Total returns have been negative across all measured timeframes provided.

Beginner takeaway

When looking at ETFs, high yields can sometimes be misleading. If the share price is dropping quickly, the "income" you receive might not make up for the loss in the value of your initial investment. Always look at the total return and the erosion-risk score to get a fuller picture of how the fund is performing.