ETF Education Report: F/M US TREASURY 5 YEAR NOTE ETF (UFIV)

What this ETF is trying to do

The UFIV ETF is designed to track U.S. Treasury 5-year notes. These are essentially loans made to the United States government. Investors use these types of ETFs to get exposure to government debt.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return."

• Price return only tracks how much the share price itself has changed.

• Total return includes both the price changes and any cash payments (distributions) made to investors.

For UFIV, the numbers show different results depending on how you look at them:

• Year-to-Date (YTD): The price return is approximately -5.59%, while the total return is approximately -2.87%.

• One Year: The price return is approximately -5.61%, while the total return is approximately -2.09%.

• Three Years: The price return is approximately -2.22%, but the total return is a positive 9.78%.

To visualize the price change, you can look at the estimated price from roughly one year ago, which was about $49.28. The current price is approximately $46.51.

Income and distribution explanation

This ETF provides cash distributions to investors. The current distribution yield is approximately 3.83%. These payments usually happen monthly, and there were 12 payments in the last year.

It is important to remember that a distribution yield tells you how much cash was paid out relative to the price, but it is not the same as your total return. High yields can sometimes be misleading if the share price is also falling.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. StockValueFinder uses an "erosion-risk score" to measure this risk.

UFIV has an erosion score of 75, which is labeled as "mild price erosion." This means there has been some mild deterioration in the share price. However, there is no "severe erosion-risk flag" for this ETF.

Pros

• The three-year total return is positive at approximately 9.78%, meaning the combination of price changes and distributions has grown over that period.

• The ETF provides regular monthly cash distributions.

Cons

• The share price has seen a decline over the last year and year-to-date.

• There is a "mild" erosion-risk score, indicating some price deterioration.

Beginner takeaway

When studying UFIV, notice how the total return is often higher than the price return. This happens because the cash distributions help offset some of the share-price declines. Always look at both numbers to get a full picture of how an ETF is performing.

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*Disclaimer: This report is for educational purposes only. It does not provide financial advice and does not recommend buying, selling, or holding any security.*