What this ETF is trying to do

The Invesco Advantage Municipal Income Trust II (VKI) is an Exchange Traded Fund (ETF). While the specific holdings are not listed in this report, ETFs like this one generally aim to provide income to investors through distributions.

What the numbers show

When looking at an ETF, it is important to know the difference between price return and total return.

• Price Return: This only tracks how much the share price itself has changed.

• Total Return: This includes both the change in share price AND any cash distributions (dividends) paid out to investors.

For VKI, the numbers show different results depending on how you measure them:

• Year-to-Date (YTD): The price return is approximately -7.62%. However, the total return is -2.36%.

• One Year: The price return was approximately -4.04%, but the total return was +3.35%.

• Three Year: The price return was approximately +7.32%, while the total return was much higher at +32.21%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $8.78. The current price is $8.43.

Income and distribution explanation

This ETF focuses on providing regular cash to investors. The distribution yield is approximately 7.96%. This number describes the cash distributions relative to the current ETF price.

The fund usually pays out money monthly, with 12 payments made over the last year. It is important to remember that a high distribution yield does not guarantee that an investor will earn that same percentage as a total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Investors often care about this because they want their original investment (the principal) to stay stable while they collect income.

For VKI, 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 present. This suggests the fund's price movement is not currently showing signs of a major structural collapse in value.

Pros

• Higher Total Returns: Over the three-year period, the total return (+32.21%) was significantly higher than the price return (+7.32%), showing the impact of distributions.

• Regular Income: The fund has a high income rating grade of "A" and provides frequent monthly distributions.

Cons

• Price Declines: The share price has seen declines in both the year-to-date and one-year periods.

• Total Return Fluctuations: While long-term total returns have been positive, the year-to-date total return is currently negative.

Beginner takeaway

When looking at VKI, it is helpful to distinguish between the share price and the total return. While the share price has dropped recently, the distributions help boost the overall total return. Always remember that a high yield is not the same as a high total return, and it is important to watch how much the share price changes alongside the income you receive.