SCHWAB MORTGAGE-BACKED SECURITIES ETF (SMBS) Educational Report

What this ETF is trying to do

The SCHWAB MORTGAGE-BACKED SECURITIES ETF, which uses the ticker symbol SMBS, is an exchange-traded fund. Based on its name, it focuses on mortgage-backed securities.

What the numbers show

As of October 5, 2026, the current price of one share is $23.91. An estimated price from roughly one year ago was $25.66.

When looking at how this ETF has performed, it is important to look at two different numbers: the price return and the total return.

• Price Return: This only tracks how much the share price itself went up or down. Over the last year, the one-year price return was -6.83%. So far this year (YTD), the price return is -6.87%.

• Total Return: This includes the change in share price plus any cash distributions paid to investors. The one-year total return was -1.90%, and the YTD total return is -3.17%.

Because the total return is a higher number than the price return, it shows that the cash payments helped offset some of the losses from the falling share price.

Income and distribution explanation

This ETF has a distribution yield of approximately 5.47%. This means the fund pays out cash relative to its share price. These payments are usually made monthly, and there were 12 payments in the last year.

It is important for new investors to remember that a high distribution yield does not mean you are making a profit. Even if you receive regular cash, the overall value of your investment can still go down if the share price falls.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of an ETF's underlying assets or its share price declines over time. StockValueFinder uses an "erosion-risk score" to measure this risk.

SMBS has an erosion score of 75, which is labeled as "mild price erosion." This means there is a mild risk regarding the stability of the share price. However, it does not have a "severe erosion-risk flag."

Pros

• The ETF provides regular cash income through distributions that are usually paid out monthly.

• The distribution yield is approximately 5.47%.

Cons

• The share price has declined over the last year and so far this year.

• Both the one-year and YTD total returns have been negative.

• There is a mild erosion-risk score of 75.

Beginner takeaway

When looking at SMBS, you can see that while it pays out regular cash (distributions), the actual price of the shares has been going down. This is why it is important to look at both the "price return" and the "total return" to get a full picture of how an investment is performing.