ETF Report: Riverfront Strategic Income Fund (RIGS)

What this ETF is trying to do

The Riverfront Strategic Income Fund (RIGS) is an exchange-traded fund (ETF) traded on the NYSE. Based on its name, this fund focuses on strategic 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: This measures only the change in the share price. For RIGS, the one-year price return was approximately -4.60%. The year-to-date (YTD) price return was approximately -3.38%.

• Total Return: This includes both the share price changes and the money paid out to investors through distributions.

The total return numbers tell a different story. While the share price went down over the last year, the one-year total return was approximately 0.11%. Over three years, the total return was much higher at approximately 14.40%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was about $23.34. The current price is $22.27.

Income and distribution explanation

This ETF provides cash to investors through distributions. The distribution yield is approximately 5.36%. This means the amount of cash paid out is about 5.36% of the current share price. These payments happen frequently; in the last 12 months, there were 13 distributions, and they usually occur monthly.

It is important to remember that a high distribution yield is not the same as total return. While distributions provide cash, 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. StockValueFinder uses an "erosion-risk score" to measure this risk. RIGS has an erosion score of 94, which is labeled as "Stable / sideways" with a severity rating of "good." There is no severe erosion-risk flag for this ETF.

Pros

• The fund has a history of positive total returns over one, three, and five-year periods.

• It provides regular cash distributions (usually monthly).

• The erosion-risk score suggests the fund is currently stable.

Cons

• The share price has seen declines in the short term (one-year and YTD price returns are negative).

• The fund's top holdings were not supplied in the current data.

Beginner takeaway

For new investors, RIGS shows how price and total return can move in different directions. Even when the share price of an ETF drops, the total return can be positive if the cash distributions are large enough to offset the price decline. Always look at total return to see the full picture of how an investment has performed.