ETF Education Report: THORNBURG INTERNATIONAL EQUITY ETF (TXUE)

What this ETF is trying to do

The THORNBURG INTERNATIONAL EQUITY ETF (TXUE) is an exchange-traded fund that focuses on international stocks. This means it invests in companies located outside of the United States. Based on its top holdings, the fund includes a variety of global companies in sectors like technology, finance, and energy.

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. For TXUE, the one-year price return was approximately 12.38%. The year-to-date (YTD) price return was approximately 10.68%.

• Total Return: This includes the share price change plus any distributions (cash payments) made to investors. The one-year total return for TXUE was approximately 13.60%. The YTD total return was also approximately 10.68%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $30.88, and the current price is $34.70.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. TXUE has a distribution yield of approximately 0.98%. This number describes the cash distributions relative to the ETF's price. The trailing distributions were approximately $0.34.

It is important to note that the distribution frequency for this ETF is described as "irregular" or "less frequent," with one payout recorded in the last 12 months. While distributions provide cash income, they are not the same as total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of an ETF's underlying assets declines significantly. Investors often watch for this because they want to know if their initial investment is staying stable. For TXUE, the erosion-risk score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are some of the top holdings in this fund (note that this is a partial list):

• Thornburg Capital Management: 4.04%

• Taiwan Semiconductor Manufacturing Co Ltd: 3.91%

• BNP Paribas Act. Cat.A: 3.33%

• Mitsubishi UFJ Financial Group Inc: 3.21%

• ING Groep NV Common Stock EUR.01: 3.13%

• Orange SA: 3.04%

• NN Group NV: 2.97%

• TotalEnergies SE: 2.89%

• AstraZeneca PLC: 2.85%

• Siemens AG: 2.78%

*Holdings can change over time.*

Pros

• The ETF has shown positive price returns and total returns over the last year.

• The erosion-risk measurement is rated as "good."

Cons

• The distribution frequency is irregular rather than consistent.

• The income rating grade is a "C."

Beginner takeaway

When studying TXUE, remember that the share price and the total return are different numbers. The total return gives a fuller picture because it includes the cash distributions. Also, while this fund pays a distribution yield, high yields alone do not tell the whole story of how an investment is performing.