ETF Education Report: SPTS

What this ETF is trying to do

The STATE STREET(R) SPDR(R) PORTFOLIO SHORT TERM TREASURY ETF (ticker: SPTS) is an exchange-traded fund. Based on its name, it focuses on short-term U.S. Treasury securities.

What the numbers show

It is important to understand that "price return" and "total return" are different things. Price return only tracks how much the share price changes. Total return includes both the price change and the cash distributions (dividends) paid out to investors.

Here is what the data shows:

• Year-to-Date (YTD): The price return is approximately -2.25%, but the total return is 0.58%.

• One Year: The price return is approximately -2.22%, while the total return is 1.59%.

• Three Year: The price return is approximately -0.21%, while the total return is 12.70%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The estimated price was about $29.27, and the current price is $28.62. This shows a share-price decline over that period.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 3.89%. These payments usually happen monthly, with the most recent 12 months showing 12 payouts.

When looking at income, remember that a high distribution yield is not the same as total return. Total return is the more complete picture because it combines the cash you received with the change in the share price.

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, they are not the same thing.

For SPTS, 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.

Pros

• The fund has a high income rating grade of "A."

• The three-year total return is 12.70%, which shows the benefit of including distributions in the calculation.

Cons

• The share price has seen declines in the year-to-date, one-year, and three-year price return categories.

Beginner takeaway

When studying an ETF like SPTS, don't just look at the share price or just look at the dividend yield. The price return tells you how the share value moved, and the distribution yield tells you the cash payout. The total return is often the most helpful number for seeing how the investment performed overall by combining both pieces.