ETF Education Report: Simplify Government Money Market ETF (SBIL)

What this ETF is trying to do

The Simplify Government Money Market ETF (SBIL) is an exchange-traded fund designed to act like a money market fund. It focuses on government-related assets. Based on its top holdings, it invests in things like Federal Home Loan Banks, United States Treasury Notes, and cash equivalents.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This only measures how much the share price itself has changed. For SBIL, the one-year price return was approximately -4.00%. The year-to-date (YTD) price return is approximately 0.15%.

• Total Return: This includes the share price changes *plus* any cash distributions paid out to investors. The one-year total return was approximately 3.73%, and the YTD total return was approximately 2.57%.

To give you an idea of price movement, the estimated price from roughly one year ago was $100.28. The current price is $100.24.

Income and distribution explanation

This ETF pays out cash to investors, which is called a distribution. The distribution yield is approximately 3.70%. This number tells you how much cash was distributed relative to the current share price.

SBIL usually pays these distributions monthly, having made 12 payments over the last year. It is important to remember that a high distribution yield is not the same as total return, and receiving cash does 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. StockValueFinder uses an erosion-risk score to measure this risk.

SBIL has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag for this ETF. This suggests the fund's value has remained relatively steady rather than dropping significantly.

Pros

• The fund shows a "good" erosion severity rating, meaning the risk of value loss is measured as low.

• It provides regular monthly cash distributions.

Cons

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

• The income rating grade is a "C."

Beginner takeaway

When looking at SBIL, notice the difference between the share price and the total return. While the share price saw a small decline over the last year, the total return was positive because of the cash distributions paid to investors. Always remember that high yields can sometimes exist even when share prices are falling.