ETF Report: DAY HAGAN SMART SECTOR FIXED INCOME ETF (SSFI)

What this ETF is trying to do

The DAY HAGAN SMART SECTOR FIXED INCOME ETF (SSFI) is an exchange-traded fund listed on the NYSE. Based on its name, it focuses on fixed income, which generally refers to bonds or other debt-related investments.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and any cash distributions (dividends) paid out to investors.

Here is what the data shows for SSFI:

• Year-to-Date (YTD): The price return is approximately -5.62%. However, the total return is -3.29%.

• One Year: The price return is approximately -6.34%, while the total return is -2.73%.

• Three Year: The price return is approximately -1.12%, but the total return is 11.02%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $21.61, and the current price is $20.24.

Income and distribution explanation

This ETF pays out cash distributions to investors. The distribution yield is approximately 3.96%. This means the amount of cash paid out is about 3.96% of the current share price. These payments usually happen quarterly, and there were 4 payments in the last 12 months.

It is important to remember that a high distribution yield does not mean you are making that much money in total. You must look at the "total return" to see how the price changes and distributions work together.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. While a falling share price does not always mean the NAV is dropping, we use "erosion scores" to measure risk.

SSFI has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and is not a guarantee that the fund's value has collapsed. There is no severe erosion-risk flag for this ETF.

Pros

• The three-year total return is positive at approximately 11.02%.

• The ETF provides regular cash distributions (usually quarterly).

Cons

• The one-year and year-to-date price returns have been negative.

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

Beginner takeaway

When studying SSFI, notice that the total return is often higher than the price return. This happens because the cash distributions help offset some of the share-price declines. However, because the price has been falling recently, investors should always look at both the price movement and the total return to get the full picture.