ETF Education Report: Tri-Continental Corp (TY)

What this ETF is trying to do

Tri-Continental Corp (ticker: TY) is an Exchange Traded Fund (ETF) traded on the NYSE. While the specific investment goal isn't listed in the data, ETFs are tools used by investors to gain exposure to different groups of assets.

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 only tracks how much the share price itself has changed.

• Total Return: This includes both the change in share price *and* any cash distributions (dividends) paid out to investors.

For TY, the numbers show that total returns are higher than price returns because of the cash paid out. Here is the breakdown:

• Year-to-Date (YTD): The price return is approximately 5.88%, while the total return is approximately 8.61%.

• One Year: The price return is approximately 2.25%, while the total return is approximately 12.38%.

• Three Years: The price return is approximately 26.81%, while the total return is approximately 64.87%.

To give you an idea of price movement, the current price is $34.58. The estimated price from roughly one year ago was approximately $33.82.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 9.20%. This number describes the cash paid out relative to the ETF's price.

The data shows that TY usually pays distributions quarterly, and it has made 4 payments over the last 12 months. 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 an ETF decreases over time. Investors often care about this because they want their original investment (the principal) to stay stable while they collect income.

For this ETF, 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 suggests the price trend has been relatively stable according to these measurements.

Pros

• The ETF shows a history of positive total returns over one, three, and five years.

• It provides a significant distribution yield of approximately 9.20%.

Cons

• The one-year price return (2.25%) is much lower than the one-year total return (12.38%), meaning a large portion of the value comes from distributions rather than share price growth.

Beginner takeaway

When looking at TY, it is helpful to distinguish between the share price and the total return. While the share price has grown slowly, the total return is much higher because of the cash distributions paid to investors. Always remember that high yields are just one part of how an ETF performs.