ETF Education Report: USCF Gold Strategy Plus Income Fund (USG)

What this ETF is trying to do

The USCF Gold Strategy Plus Income Fund (ticker: USG) is an exchange-traded fund (ETF) traded on the NYSE. While the specific investment strategy details are not listed in the provided data, the name suggests it focuses on a gold-related strategy while also aiming to provide income to investors.

What the numbers show

It is important to understand that "price return" and "total return" tell different stories. Price return only tracks how the share price changes. Total return includes both the price change and the cash distributions paid out to investors.

• Year-to-Date (YTD): The price return is approximately -6.21%. However, the total return is slightly higher at -4.53%.

• One Year: The share price declined by approximately 13.92%. Even with this decline, the one-year total return was positive at approximately 9.45%.

• Three Years: The share price increased by approximately 34.17%, while the three-year total return was much higher at approximately 92.56%.

To visualize the price change, if you had invested in this ETF one year ago, the estimated price was roughly $37.86. The current price is $32.59.

Income and distribution explanation

This ETF has a high distribution yield of approximately 29.23%. This means the fund pays out a large amount of cash relative to its share price. Over the last 12 months, it made four distributions. These payments usually happen on a quarterly basis, with Monday being the most common day for payouts.

It is important to remember that a high distribution yield does not mean an investor earned that same percentage as a total return. You should always look at the "total return" figure to see how the investment performed overall.

NAV erosion explanation

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

For USG, the erosion-risk score is 75, which is labeled as "Mild price erosion." This is a measurement of risk and does not necessarily mean the fund's value has collapsed.

Pros

• The three-year total return has been very high at approximately 92.56%.

• The fund provides a high distribution yield for those seeking cash income.

Cons

• The one-year price return shows a significant share-price decline of approximately 13.92%.

• The fund shows a "mild" erosion-risk score.

Beginner takeaway

When looking at high-yield ETFs like USG, it is vital to look at both the price return and the total return. A fund might pay out a lot of cash (high distribution yield), but if the share price is falling, the total return might be much lower than the yield suggests. Always check the erosion-risk score to understand the potential for price deterioration.