ETF Education Report: Weitz Core Plus Bond ETF (WCPB)

What this ETF is trying to do

The Weitz Core Plus Bond ETF (WCPB) is an exchange-traded fund that trades on the NYSE. Based on its name, it focuses on bond investments.

What the numbers show

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

• Price Return: This measures only the change in the share price. For WCPB, the year-to-date (YTD) price return is approximately -5.44%. The one-year price return is approximately -5.35%.

• Total Return: This includes the share price change plus any cash distributions paid out to investors. The YTD total return is approximately -1.96%, and the one-year total return is approximately -0.90%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $25.52, and the current price is $24.15.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. WCPB has a distribution yield of approximately 4.81%. This means the cash distributions are about 4.81% of the current share price. These payments usually happen monthly, with 12 payments recorded over the last year. Most of these payments have occurred on Thursdays.

It is important to remember that a high distribution yield does not mean the investor earned that percentage as their total return. Total return is the more complete picture of how the investment performed.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. While a falling share price does not always mean the NAV is dropping, we can look at "erosion-risk" measurements to see how the price is behaving.

WCPB has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk and does not mean the fund's value has definitely collapsed. There is no severe erosion-risk flag for this ETF.

Pros

• The ETF provides regular cash distributions, which usually occur on a monthly basis.

Cons

• The ETF has experienced both share-price declines and negative total returns over the last year.

• The erosion-risk score indicates mild price erosion.

Beginner takeaway

When studying WCPB, remember that the share price and the cash distributions tell different parts of the story. The price return shows how the cost of a single share has changed, while the total return shows how much value was gained or lost including the cash paid out. High yields can be helpful for income, but they should always be viewed alongside the total return and price trends.