ETF Education Report: F/M HIGH YIELD 100 ETF (ZTOP)

What this ETF is trying to do

The F/M HIGH YIELD 100 ETF (ZTOP) is an exchange-traded fund listed on the NASDAQ. While the specific investment strategy is not detailed in the provided data, the name suggests it focuses on high-yield assets.

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and the cash distributions paid out to investors.

Based on the data provided:

• Year-to-Date (YTD): The price return is approximately -2.65%. However, the YTD total return is approximately 1.73%.

• One-Year: The one-year price return is approximately -3.15%. However, the one-year total return is approximately 3.02%.

To visualize this, the estimated price from roughly one year ago was $52.50. The current price is $50.84. This shows a decline in the share price, but the total return figures show that when distributions are included, the overall result was positive for the year.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 6.30%. Over the last 12 months, there were 13 distributions, which usually happen on a monthly basis. Most of these payments have occurred on Tuesdays.

It is important to remember that a high distribution yield does not guarantee the same level of total return. Investors should look at the total return to see how the fund 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 be related to erosion, they are not the same thing.

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

Pros

• The fund has a positive one-year total return of approximately 3.02%.

• It provides regular cash distributions (usually monthly).

• The erosion-risk measurements suggest a stable profile.

Cons

• The share price has seen a decline over the last year (a one-year price return of approximately -3.15%).

• The income rating grade is a "C."

Beginner takeaway

When looking at high-yield ETFs, don't just look at the distribution yield. A fund might pay out a lot of cash, but if the share price drops significantly, your total return might be lower than expected. Always compare the price return to the total return to get a clearer picture of how the fund is performing.