ETF Education Report: WISDOMTREE BLOOMBERG U.S. DOLLAR BULLISH FUND (USDU)

What this ETF is trying to do

The WISDOMTREE BLOOMBERG U.S. DOLLAR BULLISH FUND (ticker: USDU) is an exchange-traded fund designed to track the performance of the U.S. dollar in a bullish way. This means it aims to benefit when the U.S. dollar performs strongly compared to other currencies.

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 only measures 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 USDU, the numbers show:

• Year-to-Date (YTD): The price return is approximately 2.95%. The total return is also approximately 2.95%.

• One Year: The price return was approximately 1.34%, while the total return was higher at approximately 5.24%.

• Three Year: The price return was approximately -2.60%, but the total return was positive at approximately 12.50%.

To give you an idea of price movement, the estimated price from roughly one year ago was $26.21. The current price is $26.56.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 3.72%. It is important to remember that a high yield does not guarantee that an investor will earn that same percentage as a total return. Distributions are cash payments, which are different from the growth of your original investment (your principal). In the last 12 months, there was one distribution payment.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases over time. StockValueFinder uses an "erosion-risk score" to measure this risk. USDU has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Top Holdings

The fund's holdings can change over time. As of the latest update, the top holdings include:

• WISDOMTREE FLOATING RATE TREASURY ETF (4.04%)

• U.S. DOLLAR (1.01%)

• EURO (0.78%)

• JAPANESE YEN (0.36%)

• CANADIAN DOLLAR (0.34%)

• GREAT BRITISH POUND (0.28%)

• MEXICAN NUEVO PESO (0.28%)

• CURRENCY CONTRACT CNH (0.22%)

• AUSTRALIAN DOLLAR (0.11%)

• SOUTH KOREAN WON (0.11%)

Pros

• The total return over three years (12.50%) is significantly higher than the price return (-2.60%), showing that distributions have added value.

• The erosion-risk score suggests the fund is currently stable.

Cons

• The three-year price return has been negative, meaning the share price itself has declined over that period.

• Distributions are described as "irregular" or "less frequent."

Beginner takeaway

When looking at USDU, notice that the total return is often higher than the price return. This happens because the cash distributions help boost the overall value. However, always look at both numbers to see how the share price is moving on its own.