What this ETF is trying to do

The STATE STREET(R) SPDR(R) PORTFOLIO MORTGAGE BACKED BOND ETF (ticker: SPMB) is an exchange-traded fund. This type of investment focuses on mortgage-backed bonds.

What the numbers show

When looking at this 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 goes up or down.

• Total return tracks the share price change *plus* any cash payments (distributions) you received.

Currently, the price of one share is $21.00. An estimated price from roughly one year ago was about $22.42.

Over the last year, the price return was -6.33%. However, the total return for the same period was -2.39%. This shows that while the share price dropped, the cash payments helped make the overall loss a little smaller.

Looking at longer periods:

• Year-to-date (YTD): The price return is -6.31%, and the total return is -3.57%.

• Three-year period: The price return was 2.29%, but the total return was much higher at 14.74%.

To visualize the price change: If you had $10,000 invested in this ETF one year ago, and we only look at the share price (not the cash payments), your investment would be worth approximately $9,366.68 today based on the estimated prices.

Income and distribution explanation

This ETF provides cash payments to investors. The distribution yield is 4.37%. This number describes the cash paid out compared to the current share price. It is important to remember that a high yield does not mean your total return will be that same percentage.

These payments are usually made monthly. Over the last year, the trailing distributions were approximately $0.92 per share.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in the fund decreases. The data shows an erosion-risk score of 75, which is labeled as "Mild price erosion." This means there is a mild risk regarding the stability of the fund's value. However, there is no "severe erosion-risk flag" for this ETF.

Pros

• The three-year total return has been positive at 14.74%.

• It provides regular cash income, usually on a monthly basis.

Cons

• The share price has declined over the last year (a -6.33% price return).

• There is a measurement of "mild" price erosion.

Beginner takeaway

When looking at an ETF like SPMB, don't just look at the cash it pays out. Always check the total return to see how the share price and the cash payments work together. Because this ETF has had some price declines recently, it is helpful to understand that the cash distributions can help offset some of those losses, but they do not guarantee you won't lose money on the share price.