Understanding the T. ROWE PRICE U.S. HIGH YIELD ETF (THYF)

What this ETF is trying to do

The T. ROWE PRICE U.S. HIGH YIELD ETF (ticker: THYF) is an exchange-traded fund listed on the NYSE. While the specific holdings are not listed in this report, high-yield ETFs generally focus on providing income to investors through distributions.

What the numbers show

It is important to understand that price return and total return are two different things. Price return only tracks how much the share price moves. Total return includes both the price movement and the money paid out through distributions.

Here is what the data shows for THYF:

• Year-to-Date (YTD): The price return is approximately -3.04%, but the total return is +1.35%.

• One Year: The price return is approximately -4.02%, while the total return is +2.71%.

• Three Years: The price return is approximately -0.05%, but the total return is +24.40%.

To visualize the price change, we can look at an estimate. The estimated price from roughly one year ago was $52.79. The current price is $50.67. This shows a decline in the share price over that period.

Income and distribution explanation

This ETF focuses on providing regular cash to investors. The distribution yield is approximately 6.94%. This number describes the cash distributions relative to the ETF's price.

The fund usually pays out money monthly, with 12 payments made over the last year. Most of these payments have occurred on Tuesdays. While a high yield can provide cash income, it 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). Some investors worry that high distributions might cause the fund's value to shrink over time.

For THYF, 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. This means the fund's price trends do not currently trigger a high-risk warning for erosion.

Pros

• Total Returns: Even when the share price went down over the last year, the total return remained positive because of the distributions.

• Income: The fund offers a distribution yield of approximately 6.94%.

Cons

• Price Fluctuations: The share price has seen declines in the year-to-date and one-year measurements.

• Yield vs. Price: A high distribution yield does not guarantee that the share price will stay stable.

Beginner takeaway

When looking at THYF, it is helpful to distinguish between the share price and the total return. While the share price has decreased recently, the total return has been positive due to the cash distributions paid out to investors. Always remember that a high distribution yield is not a guarantee of total profit.