Share-split context: A reverse split was recorded on Mar 24, 2022 with coefficient 0.5. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: WISDOMTREE FLOATING RATE TREASURY FUND (USFR)

What this ETF is trying to do

The WISDOMTREE FLOATING RATE TREASURY FUND (ticker: USFR) is an exchange-traded fund (ETF). While the specific holdings are not listed in this report, the name suggests it focuses on floating rate Treasury instruments.

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 the cash distributions (dividends) paid out to investors.

For USFR, the numbers show:

• Year-to-Date (YTD): The price return is approximately 0.20%, while the total return is approximately 3.00%.

• One Year: The price return is approximately 23.86%, while the total return is approximately 4.05%.

• Three Years: The price return is approximately 9.93%, while the total return is approximately 14.48%.

Because this ETF has a history of reverse splits, we use split-adjusted returns to see how the value has changed over time. In a reverse split, multiple old shares are combined into fewer new shares, which causes the price per share to rise mechanically.

Income and distribution explanation

Some investors look for ETFs that pay regular cash. USFR has a distribution yield of approximately 3.73%. This means the amount of cash paid out is about 3.73% of the current share price. These distributions usually happen monthly, with 12 payments recorded over the last year. It is important to remember that a high distribution yield is not the same thing as total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value, which is the actual value of the assets held by the fund. If an ETF's price falls significantly, investors watch for erosion.

For USFR, 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 fund's price has remained relatively stable rather than experiencing major deterioration.

Pros

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

• It provides regular monthly distributions.

• The erosion-risk score suggests price stability.

Cons

• The price return (the change in share price alone) is lower than the total return, meaning much of the value comes from distributions rather than share price growth.

• The fund has a history of reverse splits.

Beginner takeaway

When studying USFR, notice that the total return is higher than the price return. This happens because the fund pays out cash distributions to investors. Always look at both numbers to get a full picture of how an ETF is performing. High yields can provide income, but they are separate from the growth of the share price itself.