ETF Education Report: VGLT

What this ETF is trying to do

VGLT is the ticker symbol for the Vanguard Long-Term Treasury Index Fund ETF Shares. This is an Exchange Traded Fund (ETF), which is a type of investment that holds many different assets in one package.

What the numbers show

The current price of one share is $49.92. Based on our data, the estimated price from roughly one year ago was $56.95.

When looking at how an ETF performs, it is important to understand two different numbers: price return and total return.

• Price return only tracks how much the share price itself goes up or down.

• Total return includes both the change in share price *and* any cash payments (distributions) you received.

Here is what the data shows for VGLT:

• Year-to-Date (YTD): The price return is -10.54%, while the total return is -7.35%.

• One-Year: The price return is -12.34%, while the total return is -8.21%.

• Three-Year: The price return is -8.34%, while the total return is 4.33%.

To see how the share price changed, imagine you had $10,000 in this ETF one year ago. Based on the one-year price return of -12.34%, that $10,000 would be worth approximately $8,766 today if you only look at the share price.

Income and distribution explanation

Some investors look for ETFs that pay them cash regularly. This is called a distribution yield. For VGLT, the distribution yield is 5.06%. These payments are usually made monthly.

It is important to remember that a high distribution yield does not mean you are making a large profit. Even if an ETF pays out cash, the share price could still be falling. You should always look at the total return to see the full picture of how the investment performed.

NAV erosion explanation

"NAV erosion" is a term used when the value of the fund's assets or its share price drops over time. StockValueFinder uses an erosion-risk score to measure this risk.

VGLT has an erosion-risk score of 75, which is labeled as "mild price erosion." This means there has been some decline in the share price. However, it does not have a "severe erosion-risk flag."

Pros

• The ETF provides regular income through monthly distributions.

• Over a three-year period, the total return was positive at 4.33%.

Cons

• The share price has seen a decline over the last year and year-to-date.

• There is a measurement of mild price erosion.

Beginner takeaway

When studying VGLT, notice that the total return is higher than the price return in most periods. This happens because the cash distributions help offset some of the share-price decline. Always check both the price movement and the total return to understand how an ETF is performing.