What this ETF is trying to do

The BAHL & GAYNOR SMALL/MID CAP INCOME GROWTH ETF (ticker: SMIG) is an exchange-traded fund that focuses on small and medium-sized companies. Based on its name, it aims to find companies that offer both growth and income. The fund holds a variety of different stocks, including Silicon Motion Technology Corp ADR and Targa Resources Corp.

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 only tracks how much the share price itself has changed.

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

For SMIG, the numbers show:

• Year-to-Date (YTD): The price return is approximately 9.38%, while the total return is approximately 10.66%.

• One Year: The price return was approximately 7.29%, and the total return was approximately 9.23%.

• Three Year: The price return was approximately 37.25%, and the total return was approximately 45.24%.

An estimated price from roughly one year ago was $29.36. The current price is $31.50.

Income and distribution explanation

This ETF provides cash to investors through distributions. The distribution yield is currently approximately 1.74%. This number describes the cash paid out relative to the ETF's price.

The fund typically pays these distributions monthly, with 12 payments recorded over the last year. Most of these payments have been made on Thursdays. It is important to remember that a distribution yield tells you about the cash paid out, but it does not tell you the total amount an investor earned.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Some investors worry about this because they want to make sure their original investment stays stable while they collect income.

For SMIG, the erosion-risk score is 100, and the label states "No price erosion detected." The erosion severity is listed as "good," and there is no severe erosion-risk flag.

Pros

• Positive Returns: Both price returns and total returns have been positive over the one-year and three-year periods.

• Regular Income: The fund has a history of monthly distributions.

• Low Erosion Risk: The data shows no detected price erosion.

Cons

• Partial Data: The list of holdings provided is only a partial list of the 41 total companies held in the fund.

• Yield Level: The distribution yield is 1.74%, which may be lower than what some income-focused investors are looking for.

Beginner takeaway

When studying SMIG, notice the difference between the price return and the total return. The total return is higher because it accounts for the cash distributions paid to shareholders. While this ETF provides monthly income, always remember that high yields can sometimes be linked to price changes, so it is helpful to look at the erosion-risk score to see how stable the share price has been.