What this ETF is trying to do

The F/M Opportunistic Income ETF (ticker: ZHOG) is an exchange-traded fund listed on the NASDAQ. Based on its top holdings, which include various corporate bonds and U.S. Treasury notes, this fund appears to focus on generating income through different types of debt 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.

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

For ZHOG, the numbers show a difference between these two:

• Year-to-Date (YTD): The price return is approximately -2.89%, but the total return is positive at about 0.45%.

• One-Year: The price return was approximately -3.45%, while the total return was about 1.55%.

• Three-Year: The price return was approximately 0.75%, but the total return was much higher at about 18.21%.

An estimated price from roughly one year ago was $52.27, while the current price is $50.46.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 5.17%. This means the amount of cash paid out is about 5.17% relative to the current share price. These payments usually happen monthly, with 12 payouts recorded over the last year.

It is important to remember that a high distribution yield does not mean an investor earned that same percentage as total return. Total return is the most complete way to see how much value was actually gained or lost.

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.

For ZHOG, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• Total Returns: Over a three-year period, the total return (18.21%) was significantly higher than the price return (0.75%), showing the impact of distributions.

• Income: The fund has an income rating grade of "B" and provides regular monthly distributions.

Cons

• Price Declines: The share price has seen recent declines, including a negative one-year price return of approximately -3.45%.

• Partial Data: The list of top holdings is only a partial view of the full portfolio.

Beginner takeaway

When looking at ZHOG, notice how the total return is often higher than the price return. This happens because the cash distributions help make up for the decline in share price. Always look at the total return to get the full picture of an investment's performance, rather than just looking at the share price or the yield alone.