ETF Education Report: RBIL

What this ETF is trying to do

The F/M Ultrashort Treasury Inflation-Protected Security (TIPS) ETF, trading under the ticker RBIL, is an investment fund. Based on its name and type, it focuses on Treasury Inflation-Protected Securities. It is also labeled as an "inverse" ETF, which means it is designed to move in the opposite direction of its target index.

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 only measures how much the share price itself has changed.

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

For RBIL, the numbers show:

• Year-to-Date (YTD): The price return is approximately 0.62%. However, the YTD total return is higher at approximately 3.48%.

• One Year: The one-year price return was approximately -0.24%, meaning the share price dropped slightly. However, the one-year total return was approximately 3.99%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The estimated price was $50.09, and the current price is $49.98.

Income and distribution explanation

Some investors look for ETFs that pay out cash regularly. RBIL has a distribution yield of approximately 4.15%. This represents the cash distributions relative to the ETF's price. These payments usually happen monthly, with Tuesday being the most common day for distributions. Over the last 12 months, there were 12 payouts totaling approximately $2.07 per share.

It is important to remember that a high distribution yield does not mean the investor earned that same percentage as total return. You must look at the "total return" figure to see the full picture of how the investment performed.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. StockValueFinder uses an "erosion-risk score" to measure this risk. RBIL has an erosion score of 94, which is labeled as "Stable / sideways." This indicates a "good" erosion severity, and there is no severe erosion-risk flag present for this ETF.

Pros

• The ETF provides regular monthly distributions.

• The total return has been positive over the last year, even though the share price itself declined.

Cons

• The one-year price return was negative, meaning the share price went down.

• The ETF is an "inverse" fund, which can behave differently than standard investments.

Beginner takeaway

When studying RBIL, notice that the total return is higher than the price return. This happens because the cash distributions help make up for the slight drop in share price. Always distinguish between the price of a share and the total amount you might earn including distributions.