ETF Education Report: WisdomTree Inflation Plus Fund (WTIP)

What this ETF is trying to do

The WisdomTree Inflation Plus Fund (WTIP) is an exchange-traded fund (ETF). While the specific goal isn't detailed in the data, its holdings suggest it focuses on a mix of United States Treasury notes and various commodity futures, such as gold, silver, and natural gas.

What the numbers show

When looking at how an ETF performs, 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 WTIP, the one-year price return was approximately 21.31%. The year-to-date (YTD) price return was approximately 11.50%.

• Total Return: This is a more complete measure because it includes both the price change and any cash distributions paid out to investors. The one-year total return was approximately 26.05%, and the YTD total return was approximately 14.52%.

To give you an idea of the price movement, the estimated price from roughly one year ago was $30.80. The current price is $37.37.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. WTIP has a distribution yield of approximately 3.65%. This means the cash paid out is about 3.65% of the ETF's price.

The fund usually pays out monthly and has made 10 payments over the last 12 months. It is important to remember that a high distribution yield is not the same thing as total return. Distributions provide cash income, but 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 an ETF's underlying assets decreases significantly. It is important not to confuse a falling share price with NAV erosion.

In the case of WTIP, the erosion-risk score is 100, and the label states "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The fund has shown positive price returns and total returns over the last year.

• It provides regular cash distributions (usually monthly).

Cons

• The fund's income rating is a "C," which suggests the income level may be moderate rather than high.

• The fund holds various commodities and futures, which can be complex assets.

Beginner takeaway

WTIP has experienced growth in both its share price and its total return over the past year. While it pays out regular cash distributions, investors should always look at the "total return" to see how much they have actually gained or lost, rather than just looking at the distribution yield or the share price alone.

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*Note: This report is for educational purposes only and does not provide financial advice. It does not recommend buying, selling, or holding this ETF.*