RNTY: YIELDMAX(R) TARGET 12(TM) REAL ESTATE OPTION INCOME ETF
ETF Education Report: YIELDMAX(R) TARGET 12(TM) REAL ESTATE OPTION INCOME ETF (RNTY)
What this ETF is trying to do
The RNTY ETF is an "option income" fund. This means it uses specific financial strategies involving options to try and generate income for its investors. It focuses on the real estate sector. Its top holdings include companies like Prologis Inc, Welltower Inc, and Vivmark Residential. Because the list of holdings provided is partial, these are just some of the companies the fund holds.
What the numbers show
It is important to understand that "price return" and "total return" are two different things.
• Price Return: This measures only the change in the share price. For RNTY, the one-year price return was approximately -6.40%. The year-to-date (YTD) price return was approximately -5.06%.
• Total Return: This includes the share price change plus any distributions (cash paid out) received. Even though the share price went down, the one-year total return was approximately 5.59%, and the YTD total return was approximately 3.94%.
To see how the price changed, we can look at an estimated price from roughly one year ago, which was $49.56, compared to the current price of $46.39.
Income and distribution explanation
This ETF is designed to provide cash to investors. The distribution yield is approximately 12.84%. This means the amount of cash distributed relative to the ETF price is quite high. These distributions usually happen monthly, and over the last 12 months, there were 12 payouts. However, a high yield alone can be misleading; it does not guarantee that the investment will grow in value.
NAV erosion explanation
"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. While a falling share price does not always mean the NAV has declined, we can look at the "erosion-risk score" to see how the fund is performing. RNTY has an erosion score of 75, which is labeled as "mild price erosion." There is no severe erosion-risk flag for this ETF.
Pros
• The fund provides a high distribution yield.
• When including distributions, the total return has been positive for both the year-to-date period and the last year.
Cons
• The share price itself has declined over the last year and year-to-date.
• The fund shows signs of mild price erosion.
Beginner takeaway
When looking at an ETF like RNTY, it is important to look at both the share price and the total return. While the share price has gone down, the cash distributions helped make the total return positive. Always remember that high distributions do not protect you from a falling share price.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | PROLOGIS INC | PLD | 6.61% |
| 2 | WELLTOWER INC | WELL | 6.51% |
| 3 | VIVMARK RESIDENTIAL | VMRK | 6.28% |
| 4 | DIGITAL REALTY TRUST INC | DLR | 5.96% |
| 5 | SIMON PROPERTY GROUP INC | SPG | 5.19% |
| 6 | EQUINIX INC | EQIX | 4.97% |
| 7 | THE ST. JOE CO | JOE | 4.47% |
| 8 | HOWARD HUGHES HOLDINGS INC | HHH | 4.26% |
| 9 | REALTY INCOME CORP | O | 4.24% |
| 10 | TEXAS PACIFIC LAND CORP | TPL | 4.12% |