Understanding the F/M US Treasury 3 Year Note ETF (UTRE)

What this ETF is trying to do

The UTRE ETF is designed to track U.S. Treasury 3-year notes. These are essentially loans made to the United States government. Investors use these types of funds to get exposure to government debt.

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only looks at how much the share price changed. Total return includes both the price change and the cash distributions (dividends) paid out to investors.

Based on the data:

• Year-to-Date (YTD): The price return is approximately -3.59%. However, the total return is -0.89%.

• One Year: The price return was approximately -3.46%, while the total return was a positive 0.07%.

• Three Year: The price return was approximately -0.89%, but the total return was a much higher 11.19%.

To visualize the price change, we can look at an estimate. The price was approximately $49.76 one year ago, and the current price is $48.05.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 3.69%. This means the amount of cash paid out is about 3.69% of the current share price. These payments usually happen monthly, with 12 payments recorded over the last year.

Remember: a high distribution yield is not the same as total return. While distributions provide cash, they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes look like erosion, they are not always the same thing.

For this ETF, 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. This suggests the fund's value is not showing signs of significant deterioration according to these measurements.

Pros

• The fund has a "good" erosion severity rating.

• It provides regular monthly cash distributions.

• The three-year total return has been positive at 11.19%.

Cons

• The share price (price return) has been negative over the one-year and year-to-date periods.

• Total returns for the current year are currently negative.

Beginner takeaway

When looking at UTRE, it is helpful to look at both the share price and the total return. While the price of a single share has gone down recently, the cash distributions help improve the overall total return. Always remember that a falling share price and a high distribution yield are two different things.