ETF Education Report: SIMPLIFY Short Term Treasury Futures Strategy ETF (TUA)

What this ETF is trying to do

The SIMPLIFY Short Term Treasury Futures Strategy ETF (TUA) is an exchange-traded fund listed on the NYSE. While the specific investment strategy details are not listed in the holdings, this type of fund generally focuses on treasury futures.

What the numbers show

When looking at an ETF, it is important to understand the difference between "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 TUA, the numbers show a decline in both areas:

• Year-to-Date (YTD): The price return is approximately -12.25%, while the total return is approximately -10.38%.

• One Year: The price return is approximately -12.24%, while the total return is approximately -9.59%.

• Three Year: The price return is approximately -11.83%, while the total return is approximately -0.17%.

To visualize this, an investor's share price was estimated to be roughly $21.90 one year ago, compared to the current price of $19.22.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 3.23%. These payments usually happen monthly, with Tuesday being the most common day for a payout. Over the last 12 months, there were 12 distributions totaling $0.62 per share.

It is important to remember that a distribution yield tells you how much cash was paid out, but it does not guarantee that your total investment will grow.

NAV erosion explanation

"NAV erosion" is a term used to describe a decline in the value of the fund's underlying assets. StockValueFinder uses an "erosion-risk score" to measure this risk. TUA has an erosion score of 75, which is labeled as "mild price erosion." While the share price has declined, this score is a measurement of risk rather than a definitive proof of total value collapse. There is no "severe erosion-risk flag" for this ETF.

Pros

• The fund provides regular monthly cash distributions.

• The total return figures are higher than the price return figures, meaning the distributions helped offset some of the share-price decline.

Cons

• The ETF has experienced a share-price decline over the last year and three years.

• The total return has been negative for the one-year and year-to-date periods.

• The erosion-risk score indicates mild price erosion.

Beginner takeaway

When looking at TUA, notice that the share price has gone down, but the total return is slightly better than the price return alone. This is because the monthly cash distributions help cushion the impact of the falling share price. Always look at both price return and total return to get the full picture.