Share-split context: A forward split was recorded on Oct 11, 2024 with coefficient 2. A forward split turns each old share into multiple new shares and lowers the quoted price per share proportionally. Proportional ownership is unchanged at the split moment, so the split itself creates neither a gain nor a loss. The price-return figures in this report are already split-adjusted.

Understanding the SCHWAB MUNICIPAL BOND ETF (SCMB)

What this ETF is trying to do

The SCHWAB MUNICIPAL BOND ETF (SCMB) is an exchange-traded fund that focuses on municipal bonds. These are typically loans made to local governments.

What the numbers show

When looking at this ETF, it is important to understand two different types of returns: price return (how much the share price moves) and total return (which includes both price changes and cash distributions).

The data shows the following:

• Year-to-Date (YTD): The price return is approximately -7.18%. However, the total return is approximately -4.62%.

• One Year: The price return is approximately -6.75%, while the total return is approximately -3.33%.

• Three Years: The price return is approximately -2.43%, but the total return is positive at approximately 8.08%.

Because this ETF has a history of forward splits, we use split-adjusted returns to see how the value has changed over time. In a forward split, each old share becomes multiple new shares, and the price per share drops proportionally. This does not change how much you own; it just changes how the shares are counted.

Income and distribution explanation

This ETF provides cash to investors through distributions. The distribution yield is approximately 3.84%. This means the amount of cash paid out is about 3.84% of the current share price. These payments usually happen monthly, with the most recent trailing distributions totaling approximately $0.92 per share.

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" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling market price can sometimes look like erosion, they are not always the same thing.

For SCMB, the erosion-risk score is 75, which is labeled as "Mild price erosion." This is a measurement of risk rather than a confirmed collapse of value. There is no "severe erosion-risk flag" for this ETF.

Pros

• The three-year total return is positive at approximately 8.08%.

• It provides regular monthly cash distributions.

Cons

• The share price has seen declines in the one-year and year-to-date periods.

• There is a "mild" erosion-risk score.

Beginner takeaway

When looking at SCMB, notice the difference between price return and total return. While the share price has gone down recently, the total return (which includes the cash paid to you) is often higher because of the distributions. Always look at total return to get a fuller picture of how an investment is performing.