What this ETF is trying to do

The COLUMBIA SELECT TECHNOLOGY ETF (ticker: SEMI) is an exchange-traded fund that focuses on technology companies. Based on its top holdings, the fund invests in large tech names like NVIDIA Corp, Apple Inc, and Broadcom Inc. This ETF provides exposure to a variety of companies within the technology sector.

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 measures only how much the share price has changed.

• Total Return: This includes both the change in share price and any cash distributions (dividends) paid out to investors.

For SEMI, the numbers show significant growth:

• Year-to-Date (YTD): The YTD price return is approximately 34.66%. The YTD total return is also approximately 34.66%.

• One Year: The one-year price return was approximately 29.88%, while the one-year total return was higher at approximately 35.88%.

• Three Years: The three-year price return was approximately 115.55%, and the three-year total return was approximately 129.64%.

To give you an idea of the price movement, the estimated price from roughly one year ago was $31.76. The current price is $41.25.

Income and distribution explanation

Some investors look for "income," which is cash paid out by the ETF. This is called the distribution yield. SEMI has a distribution yield of approximately 3.33%.

It is important to remember that a distribution yield is not the same as total return. While distributions provide cash, they are separate from the growth of the share price itself. In this case, the fund has an irregular distribution frequency, meaning it does not pay out on a set schedule.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases significantly. Some investors worry that high payouts might cause this. However, for this ETF, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this fund.

Pros

• Strong Growth: The fund has shown high price returns over the last year and three years.

• Top Holdings: The fund holds well-known companies like NVIDIA, Apple, and Microsoft.

• Income: It provides a distribution yield of approximately 3.33%.

Cons

• Irregular Income: The distributions are described as "irregular" or "less frequent," so you cannot rely on a steady monthly or quarterly schedule.

• Partial Data: The list of top holdings is only a partial list; there are 36 total holdings in the fund.

Beginner takeaway

The COLUMBIA SELECT TECHNOLOGY ETF has shown strong price and total returns over the last few years. It also offers a distribution yield, which provides some cash income. When looking at this ETF, remember to distinguish between the share price growth and the cash distributions you receive. Always keep in mind that holdings can change over time.