ETF Education Report: WisdomTree Managed Futures Strategy Fund (WTMF)

What this ETF is trying to do

The WisdomTree Managed Futures Strategy Fund (WTMF) is an exchange-traded fund (ETF). While the specific strategy details are not listed, ETFs like this one typically aim to follow a specific investment rule or strategy. This particular fund holds assets such as the WisdomTree Floating Rate Treasury ETF and BNY Dreyfus Treasury Oblgtons Csh Mgmt Ins.

What the numbers show

When looking at an ETF, 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 WTMF, the one-year price return was approximately 10.65%. The three-year price return was approximately 22.39%.

• Total Return: This is a more complete picture because it includes both the share price changes and any cash distributions (dividends) paid out. For WTMF, the one-year total return was approximately 14.03%, and the three-year total return was approximately 37.07%.

To visualize the price change, you can look at the estimated price from roughly one year ago, which was about $38.48. The current price is $42.58.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. WTMF has a distribution yield of approximately 2.72%. This means the cash paid out is about 2.72% of the ETF's price. Over the last 12 months, there were two distributions. It is important to remember that a high distribution yield does not guarantee the fund will grow in value, and distributions are separate from the total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF steadily loses value. StockValueFinder uses an "erosion-risk score" to help monitor this. For WTMF, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this fund.

Pros

• The fund has shown positive price returns over the one-year and three-year periods.

• The total return is higher than the price return, meaning distributions added value to the overall performance.

• The fund has a high income rating grade of "A."

Cons

• Distributions are described as "irregular" or "less frequent," meaning they may not be paid out on a steady, predictable schedule.

Beginner takeaway

When studying WTMF, notice the difference between the share price movement and the total return. The total return provides a fuller picture of how the fund performed by including cash payments. Always look at both price returns and total returns to understand the full history of an ETF.