ETF Education Report: SANJAC ALPHA CORE PLUS BOND ETF (SJCP)

What this ETF is trying to do

The SANJAC ALPHA CORE PLUS BOND ETF (SJCP) is an exchange-traded fund that focuses on bond-related assets. Based on its top holdings, the fund holds various United States Treasury bonds and notes, along with other investments like preferred shares from companies such as Rithm Capital Corp and PennyMac Mortgage Investment Trust.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This measures only the change in the share price. For SJCP, the one-year price return was approximately -1.93%. The year-to-date (YTD) price return was approximately -2.01%.

• Total Return: This includes the share price change plus any distributions (cash paid out to investors). The one-year total return was approximately 1.90%, and the YTD total return was approximately 0.59%.

To visualize this, we can look at an estimated price from roughly one year ago, which was $25.14. The current price is $24.66. While the share price has gone down, the total return shows a positive number because of the cash distributions.

Income and distribution explanation

This ETF provides cash to investors through distributions. The current distribution yield is approximately 3.91%. Over the last 12 months, the trailing distributions were approximately $0.96 per share. These payments usually happen quarterly, and in the last year, they were paid out four times.

It is important to remember that a high distribution yield is not the same as total return. While distributions provide cash income, 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 share price can sometimes be related to erosion, it is not proof of it.

For SJCP, 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.

Top Holdings

The following are the top holdings in this portfolio (note that this list is partial):

• United States Treasury Bonds 2.38%: 21.90%

• United States Treasury Notes 0.38%: 16.78%

• United States Treasury Notes 4%: 13.34%

• United States Treasury Notes 3.38%: 11.28%

• Rithm Capital Corp FXDFR PRF Perpetual USD 25 Ser D: 9.19%

• United States Treasury Notes 1.63%: 8.89%

• PennyMac Mortgage Investment Trust 9%: 3.45%

• Dynex Capital Inc: 3.07%

• PennyMac Mortgage Investment Trust Cum Red Pfd: 2.18%

• Xcel Energy Inc 6.25%: 1.91%

*Holdings can change over time.*

Pros

• The fund provides regular cash distributions.

• The erosion-risk score suggests a stable price trend.

Cons

• The share price (price return) has seen a decline over the last year and year-to-date.

Beginner takeaway

When looking at SJCP, notice that the share price went down slightly, but the total return was positive. This happened because the cash distributions helped offset the drop in share price. Always look at both price return and total return to get the full picture of how an ETF is performing.