What this ETF is trying to do

The FAIRLEAD TACTICAL SECTOR ETF (TACK) is an exchange-traded fund listed on the NYSE. This ETF is designed to manage exposure across different sectors of the market. Based on its top holdings, it invests in various sector-specific funds, such as technology, healthcare, consumer staples, energy, materials, real estate, and industrials. It also holds positions in short-term and long-term treasury funds and gold.

What the numbers show

The data shows that TACK has experienced growth in both its share price and its total return over different time periods.

• Year-to-Date (YTD): The price return is approximately 6.39%, while the total return is approximately 7.48%.

• One Year: The price return is approximately 6.48%, and the total return is approximately 7.89%.

• Three Years: The price return is approximately 39.85%, and the total return is approximately 45.32%.

It is important to understand the difference between these two numbers. The price return only measures how much the share price itself has changed. The total return includes both the change in share price and the impact of distributions (cash payments).

For a visual example, the estimated price from roughly one year ago was $29.94. The current price is $31.89.

Income and distribution explanation

TACK provides cash distributions to investors. The distribution yield is approximately 1.27%. This number describes the cash payments relative to the current ETF price. The trailing distributions over the last year totaled approximately $0.41 per share.

The fund usually pays these distributions on a quarterly basis, with four payments recorded in the last 12 months. While some investors look for income, it is important to remember that a distribution yield is not the same as total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, looking at the price-based evidence, the fund has an erosion score of 100, which is labeled as "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• Positive Returns: The fund has shown positive price returns and total returns over the one-year and three-year periods.

• Diversified Exposure: The Top Holdings show exposure to many different sectors, including technology (XLK) and healthcare (XLV).

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

Cons

• Moderate Income: With a distribution yield of approximately 1.27%, this may not meet the needs of investors seeking very high levels of immediate cash income.

Beginner takeaway

TACK is an ETF that tracks various market sectors. For investors looking at the numbers, the total return is higher than the price return, which means the distributions have added value to the share price movement. While it provides quarterly income, the yield is relatively modest compared to some high-income funds. Always remember that past performance does not guarantee what will happen in the future.