Understanding the AMERICAN CENTURY SHORT DURATION STRATEGIC INCOME ETF (SDSI)

What this ETF is trying to do

The SDSI is an Exchange Traded Fund (ETF) listed on the NASDAQ. While the specific investment strategy details are not provided in this report, ETFs like this one generally aim to provide investors with a specific type of market exposure or 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 only tracks how much the share price itself has changed.

• Total Return includes both the change in share price *and* the money paid out through distributions.

For SDSI, the numbers show a difference between these two:

• Year-to-Date (YTD): The price return is approximately -1.94%, but the total return is +1.15%.

• One Year: The price return was approximately -2.15%, while the total return was +2.20%.

• Three Year: The price return was approximately 0.91%, but the total return was much higher at 17.33%.

To visualize the price change, we can look at an estimated example. The current price is $50.58. An estimated price from roughly one year ago was approximately $51.69. This shows that the share price has declined over the last year, even though the total return was positive.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 4.42%. This means the amount of cash paid out is about 4.42% relative to the current ETF price. These payments happen frequently; in the last 12 months, there were 11 distributions, and they usually occur monthly.

It is important to remember that a high distribution yield does not mean the investor earned that same percentage as their total return. You must look at the "total return" figure to see how much you actually gained or lost overall.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. Investors often care about this because they want to keep their original investment (the principal) stable while collecting income.

For SDSI, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present. This suggests the fund's price movement is currently considered stable by these specific risk measurements.

Pros

• The ETF provides regular cash distributions (usually monthly).

• The total return has been positive over the one-year and three-year periods, even when the share price itself was down.

Cons

• The share price (price return) has shown some decline over the last year.

Beginner takeaway

When looking at SDSI, notice that the share price and the total return tell different stories. While the price of a single share has gone down slightly over the last year, the total return is positive because the cash distributions helped make up for that price drop. Always look at both numbers to get the full picture of how an ETF is performing.