What this ETF is trying to do

The F/M CALLABLE TAX-FREE MUNICIPAL ETF (ticker: ZMUN) is an exchange-traded fund listed on the NASDAQ. While the specific holdings are not listed in this report, this type of ETF generally focuses on municipal bonds.

What the numbers show

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

• Price Return: This only tracks how much the share price itself has changed.

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

For ZMUN, the numbers show:

• Year-to-Date (YTD): The price return is approximately -1.08%, meaning the share price has dropped slightly this year. However, the YTD total return is approximately 1.81%.

• One Year: The one-year price return is approximately -1.01%, while the one-year total return is approximately 2.60%.

To visualize this, we can look at an estimated price from roughly one year ago. The estimated price was $50.05, and the current price is $49.55. This shows a small decline in the share price alone.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 3.61%. These payments usually happen monthly, with the most common day for a payment being Thursday. Over the last 12 months, there were 12 distributions totaling approximately $1.79 per share.

It is important to remember that a high distribution yield does not mean you have earned that same amount in total return. You must look at the total return figure to see how the investment performed overall.

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. ZMUN 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 shows a positive total return over the last year, even though the share price itself went down slightly.

• The erosion-risk score suggests the fund's value has been relatively stable or "sideways."

Cons

• The share price has experienced a slight decline over the last year and year-to-date.

• The income rating grade is a "C."

Beginner takeaway

When evaluating ZMUN, notice that the share price and the total return tell different stories. The share price has dipped slightly, but when you include the cash distributions, the total return is positive. Always check both numbers to understand how an ETF is performing.