ETF Education Report: HARBOR SCIENTIFIC ALPHA HIGH-YIELD ETF (SIHY)

What this ETF is trying to do

The HARBOR SCIENTIFIC ALPHA HIGH-YIELD ETF (ticker: SIHY) is an exchange-traded fund listed on the NYSE. Based on its name, this fund focuses on high-yield opportunities.

What the numbers show

It is important to understand that "price return" and "total return" tell different stories. Price return only tracks how the share price moves. Total return includes both the price movement and the cash distributions paid out to investors.

Here is how SIHY has performed:

• Year-to-Date (YTD): The price return is approximately -1.60%. However, the total return is positive at about 2.44%.

• One Year: The price return was approximately -3.08%, while the total return was about 3.88%.

• Three Years: The price return was approximately 3.23%, but the total return was much higher at about 28.40%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was about $46.38. The current price is $44.95. This shows that while the share price has gone down, the total return (which includes dividends) has remained positive.

Income and distribution explanation

This ETF focuses on providing cash to investors. The distribution yield is approximately 7.04%. This means the fund paid out a significant amount of cash relative to its share price. These distributions usually happen monthly, with 12 payments recorded over the last year.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Investors often look for stability in their principal (the original money they put in).

For SIHY, 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 not currently showing signs of a major collapse in value.

Pros

• The fund has a history of positive total returns over the one-year and three-year periods.

• It provides a relatively high distribution yield for investors seeking regular cash.

• The erosion-risk measurements suggest the fund is currently stable.

Cons

• The share price has experienced declines (price return) over the year-to-date and one-year periods.

• High distribution yields can sometimes be misleading; a high yield does not guarantee that the total value of your investment will grow.

Beginner takeaway

When looking at SIHY, it is helpful to distinguish between the share price and the total return. While the price of a single share has dropped recently, the total return—which counts the cash paid out to you—has been positive. Always remember that a high distribution yield is not the same thing as total profit.