Understanding the ISHARES ESG AWARE USD CORPORATE BOND ETF (SUSC)

What this ETF is trying to do

The ISHARES ESG AWARE USD CORPORATE BOND ETF (ticker: SUSC) is an exchange-traded fund. While the specific holdings are not listed in this report, this type of ETF generally focuses on corporate bonds.

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: This measures only the change in the share price.

• Total Return: This includes both the share price changes and any cash distributions (dividends) paid out.

For SUSC, the numbers show different trends depending on how much time has passed:

• Year-to-Date (YTD): The price return is approximately -4.32%. However, the total return is -1.37%.

• One Year: The price return was approximately -5.21%, while the total return was -0.84%.

• Three Years: The price return was approximately 0.97%, but the total return was much higher at 15.14%.

• Five Years: The five-year total return was approximately -2.61%.

To visualize the price change, we can look at an estimate. The current price is $22.38. An estimated price from roughly one year ago was approximately $23.61.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the distribution yield. For SUSC, the distribution yield is approximately 4.67%. This means the ETF has paid out about $1.04 in trailing distributions.

These payments happen frequently; the ETF usually pays out monthly, with 12 payments recorded over the last year. It is important to remember that a high distribution yield does not guarantee that an investor will earn that same percentage as a total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. In this report, we use an erosion-risk score to measure this risk.

SUSC has an erosion score of 75, which is labeled as "Mild price erosion." This is a measurement of risk and does not necessarily mean the fund's value has collapsed. There is no "severe erosion-risk flag" for this ETF.

Pros

• Total Return over 3 years: The three-year total return (15.14%) was higher than the three-year price return (0.97%), showing that distributions added value over that period.

• Regular Income: The ETF provides a distribution yield of approximately 4.67% with monthly frequency.

Cons

• Recent Price Declines: Both the year-to-date and one-year price returns have been negative.

• Mild Erosion Risk: The fund has a score indicating mild price erosion.

Beginner takeaway

When studying SUSC, remember that the share price and the total return are different. While the share price has gone down recently, the total return (which includes cash payments) tells a slightly different story. Always look at both the price movement and the distributions to get a full picture.