Understanding the BONDBLOXX CCC RATED USD HIGH YIELD CORPORATE BOND ETF (XCCC)

What this ETF is trying to do

The XCCC ETF is an exchange-traded fund that focuses on high-yield corporate bonds. Specifically, it looks at "CCC rated" bonds. In the world of investing, these are often considered higher-risk bonds because they come from companies with lower credit ratings.

What the numbers show

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

• Price Return only tracks how much the share price moves up or down.

• Total Return includes both the price changes and the cash distributions (dividends) paid out to investors.

For XCCC, the numbers show different trends depending on how much time has passed:

• Year-to-Date (YTD): The price return is approximately -8.10%. However, the total return is higher at -1.85%.

• One Year: The price return was approximately -10.92%, while the total return was approximately -1.83%.

• Three Years: The price return was approximately -7.88%, but the total return was a positive 25.64%.

To visualize the price change, you can look at the estimated price from roughly one year ago, which was $39.23. The current price is $34.95.

Income and distribution explanation

This ETF has a high distribution yield of approximately 10.34%. This means the fund pays out a significant amount of cash relative to its price. These distributions usually happen monthly, and over the last 12 months, there were 12 payouts.

It is important to remember that a high distribution yield does not mean you are making that much money in total. You must always look at the total return to see how the price changes and the cash payments work together.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. StockValueFinder uses an erosion-risk score to measure this risk.

XCCC has an erosion score of 75, which is labeled as "Mild price erosion." While the share price has declined over the last year, there is no "severe erosion-risk flag" for this ETF.

Pros

• High Distribution Yield: The fund offers a high percentage of cash distributions (approximately 10.34%).

• Three-Year Total Return: Over a three-year period, the total return was positive at 25.64%.

Cons

• Price Decline: The share price has seen a decline over the last year and year-to-date.

• Credit Risk: Because it invests in CCC-rated bonds, it deals with higher-risk corporate debt.

Beginner takeaway

When looking at high-yield ETFs like XCCC, don't just look at the distribution yield. A high yield can look attractive, but if the share price is falling, it can offset those gains. Always check the total return to get a clearer picture of how the investment has actually performed over time.