ETF Education Report: VOYA MULTI-SECTOR INCOME ETF (VMSB)

What this ETF is trying to do

The VOYA MULTI-SECTOR INCOME ETF (VMSB) is an exchange-traded fund listed on the NYSE. While the specific investment strategy is not detailed in the provided data, the name suggests it focuses on providing income through different sectors of the market.

What the numbers show

When looking at ETF performance, 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 VMSB, the Year-to-Date (YTD) price return is approximately -3.37%. This means the share price has gone down since the start of the year.

• Total Return: This measures the change in price *plus* any cash distributions (dividends) paid out to investors. The YTD total return for VMSB is approximately -0.54%.

Because the total return (-0.54%) is higher than the price return (-3.37%), it shows that the cash distributions helped offset some of the share-price decline.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the distribution yield.

VMSB has a distribution yield of approximately 3.71%. Over the last 12 months, it has made 9 distributions. These payments most often occur on Thursdays. It is important to remember that a high distribution yield does not guarantee an investor will earn that same percentage as a total return. Distributions are cash payments, which are different from the growth of your original investment (your principal).

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. While a falling share price can sometimes be related to this, a falling market price does not automatically prove that NAV erosion is happening.

For VMSB, there is no severe erosion-risk flag present. The data notes that the erosion score is withheld due to insufficient verified price history, and the severity is listed as unknown.

Pros

• The ETF provides regular cash distributions (9 times in the last year).

• The total return is higher than the price return, meaning distributions are helping to cushion the share-price decline.

Cons

• The YTD price return is negative, meaning the share price has decreased.

• The YTD total return is also negative.

• There is no data available regarding the ETF's top holdings or specific portfolio exposure.

Beginner takeaway

When looking at an income-focused ETF like VMSB, it is helpful to look at both the share price and the total return. The share price tells you if the cost of one share is going up or down, while the total return shows how much value you have gained or lost when including the cash payments you received. High yields can be helpful, but they do not prevent the share price from falling.