ETF Education Report: ACADEMY VETERAN BOND ETF (VETZ)

What this ETF is trying to do

The ACADEMY VETERAN BOND ETF (VETZ) is an exchange-traded fund listed on the NYSE. While the specific investment goals are not detailed in the data, it is categorized as an ETF and is not a leveraged or inverse fund.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For VETZ, the year-to-date (YTD) price return is approximately -6.90%. The one-year price return is also approximately -6.90%, and the three-year price return is approximately -3.63%.

• Total Return: This includes the share price change plus any distributions (cash payments) made to investors. The YTD total return is approximately -2.98%, and the one-year total return is approximately -1.25%. Interestingly, the three-year total return is approximately 14.70%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $19.99. The current price is $18.61.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 6.26%. This number describes the cash payments relative to the current ETF price. These distributions usually happen monthly, with 12 payments recorded over the last year. Most of these payments have been made on Mondays.

It is important to remember that a high distribution yield is not the same as total return. While distributions provide cash income, they do not guarantee that your original investment will stay the same value.

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. VETZ has an erosion score of 75, which is labeled as "Mild price erosion." This is considered a mild level of risk and does not trigger a severe erosion-risk flag.

Pros

• The ETF has a history of providing regular monthly distributions.

• The three-year total return is positive at approximately 14.70%.

Cons

• The share price has seen a decline recently, with a one-year price return of approximately -6.90%.

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

Beginner takeaway

When studying VETZ, notice the difference between the share price and the total return. While the share price has gone down over the last year, the total return (which includes cash distributions) is closer to breaking even. Always remember that high yields provide cash, but they do not prevent the share price from falling.