What this ETF is trying to do

The XTWO ETF, known as the BONDBLOXX Bloomberg Two Year Target Duration US Treasury ETF, is an exchange-traded fund. Based on its name, it focuses on U.S. Treasury securities with a two-year target duration.

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.

• Total Return: This includes both the share price changes and any cash distributions (dividends) paid out.

For XTWO, the numbers show different results depending on which you look at:

• Year-to-Date (YTD): The price return is approximately -2.45%, but the total return is +0.41%.

• One Year: The price return is approximately -2.44%, while the total return is +1.44%.

• Three Year: The price return is approximately -1.06%, but the total return is +12.50%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The estimated price was $49.47, and the current price is $48.26.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the distribution yield. XTWO has a distribution yield of approximately 3.96%. These distributions are usually paid out monthly, with the most recent trailing distributions totaling $1.913 per share.

It is important to remember that a high distribution yield does not mean the investor earned that same percentage as their total return. You must look at the "total return" figure to see how the investment performed overall including those payments.

NAV erosion explanation

NAV erosion refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes look like erosion, they are not always the same thing.

StockValueFinder uses an erosion-risk score to measure this risk. XTWO has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag for this ETF.

Pros

• The fund provides regular monthly distributions.

• While the share price has seen some declines, the total return (which includes distributions) has been positive over the one-year and three-year periods.

Cons

• The share price itself has experienced negative returns over the one-year and three-year periods.

• The YTD price return is currently negative.

Beginner takeaway

When studying XTWO, notice how the total return is higher than the price return. This happens because the cash distributions help offset the decline in the share price. Always check both numbers to get a full picture of how an ETF is performing.