UTES: VIRTUS REAVES UTILITIES ETF Report

The VIRTUS REAVES UTILITIES ETF (UTES) is an exchange-traded fund designed to provide exposure to the utilities sector. This ETF focuses on companies involved in providing essential services like electricity and gas.

What this ETF is trying to do

UTES invests in a variety of utility companies. Based on its top holdings, the fund has significant exposure to energy-related companies such as Constellation Energy Corp (12.33%), Talen Energy Corp (11.11%), and Vistra Corp (10.40%). The fund holds a total of 18 different companies.

What the numbers show

When looking at how this ETF has performed, it is important to distinguish between price return (the change in the share price) and total return (which includes distributions).

• Year-to-Date (YTD): The YTD price return is -3.03%, while the YTD total return is -1.98%.

• One-Year: The one-year price return was -9.44%, and the one-year total return was -7.99%.

• Three-Year: Over the last three years, the price return was 84.80%, and the total return was 94.37%.

• Five-Year: The five-year total return was 100.32%.

An estimated price from roughly one year ago was $84.54, compared to the current price of $76.56.

Income and distribution explanation

This ETF provides cash distributions to investors. The current distribution yield is 1.60%. Distributions are usually paid on a quarterly basis, with four payouts recorded over the last 12 months. While distributions provide cash income, they are not the same as total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Regarding price erosion, the fund has an erosion-risk score of 75, which is labeled as "Mild price erosion." This is a measurement of price-based trends and is not a severe erosion-risk flag.

Pros

• Strong Long-Term Returns: The fund has shown significant total returns over three-year and five-year periods.

• Sector Focus: It provides concentrated exposure to the utilities and energy sectors through its 18 holdings.

Cons

• Recent Price Declines: The ETF has experienced negative price returns and total returns over the last year and year-to-date.

• Mild Price Erosion: The data indicates a mild trend of price erosion.

Beginner takeaway

Investors researching UTES should note that while the fund has had strong growth over several years, it has faced recent share-price declines. When looking at this ETF, remember that the distribution yield (1.60%) is separate from the total return, and a falling share price does not always mean the underlying value of the fund's assets (NAV) is disappearing.