iShares ESG Advanced Investment Grade Corporate Bond ETF (ELQD)

ETF iShares ESG Advanced Investment Grade Corporate Bond ETF (SUSG)

Profile:

The iShares ESG Advanced Investment Grade Corporate Bond ETF (SUSG) seeks to track the investment results of the Bloomberg MSCI US Corporate Sustainability Advanced ESG Select Liquid Index. This index includes investment-grade corporate bonds that meet certain environmental, social and governance (ESG) criteria. The ETF primarily focuses on the US corporate bond market, with approximately 70% of its assets allocated to investment-grade bonds. Its investment strategy involves passively tracking the underlying index, offering broad exposure to ESG-focused investment-grade corporate bonds.

Objective:

The primary investment goal of SUSG is to provide investors with a high level of current income and long-term capital appreciation, while also aligning with ESG principles.

Issuer:

BlackRock, the world's largest asset manager, issues the ETF.

Reputation and Reliability: BlackRock has a strong reputation and a long track record in the financial industry. It is known for its expertise in managing large and complex investment portfolios.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income investing and ESG analysis.

Market Share:

SUSG has a market share of approximately 2.5% within the ESG corporate bond ETF category.

Total Net Assets:

As of November 10, 2023, SUSG has total net assets of $1.2 billion.

Moat:

SUSG's competitive advantages include:

• ESG Focus: The ETF's focus on ESG-screened bonds appeals to investors seeking to align their investments with sustainability principles.
• BlackRock's Expertise: BlackRock's extensive resources and experience in ESG investing provide the ETF with an edge in managing the portfolio.
• Cost-Effectiveness: With an expense ratio of 0.15%, SUSG offers a relatively low-cost way to access the ESG corporate bond market.

Financial Performance:

SUSG has delivered strong historical performance, outperforming its benchmark index and most of its competitors over various timeframes.

Benchmark Comparison:

The ETF has consistently outperformed the Bloomberg Barclays US Corporate Bond Index, its benchmark, by an average of 0.5% per year over the past three years.

Growth Trajectory:

The demand for ESG-focused investments is growing rapidly, which could benefit SUSG's future growth. Additionally, the increasing issuance of ESG-compliant bonds provides the ETF with a larger pool of potential investments.

Liquidity:

SUSG has an average daily trading volume of over 200,000 shares, indicating good liquidity.

Bid-Ask Spread:

The bid-ask spread for SUSG is typically around 0.02%, which is considered tight and reflects its high liquidity.

Market Dynamics:

Several factors could impact the market environment for SUSG, including:

• Economic Indicators: Interest rate changes, economic growth, and inflation can affect bond prices.
• ESG Regulations: Increased government regulations promoting sustainable investing could benefit ESG-focused ETFs.
• Market Volatility: Overall market volatility can impact the ETF's performance.

Competitors:

Key competitors of SUSG include:

• Vanguard ESG U.S. Corporate Bond ETF (VESG)
• SPDR Bloomberg SASB ESG Select Corporate Bond ETF (BSCS)
• iShares ESG Aware USD Corporate Bond ETF (ESGU)

Expense Ratio:

The expense ratio for SUSG is 0.15%, which is considered low compared to other ESG corporate bond ETFs.

Investment Approach and Strategy:

• Strategy: SUSG passively tracks the Bloomberg MSCI US Corporate Sustainability Advanced ESG Select Liquid Index.
• Composition: The ETF primarily holds investment-grade corporate bonds that meet specific ESG criteria.

Key Points:

• ESG-focused investment approach.
• Diversified exposure to the US corporate bond market.
• Strong historical performance.
• Competitive expense ratio.
• High liquidity.

Risks:

• Interest Rate Risk: Rising interest rates can decrease the value of bond investments.
• Credit Risk: The possibility of an issuer defaulting on its debt obligations.
• ESG Risk: The potential for the ETF's ESG criteria to fail to exclude companies with negative environmental or social impacts.

Who Should Consider Investing:

SUSG is suitable for investors seeking:

• Exposure to the US corporate bond market with a focus on ESG principles.
• Passive investment with low costs.
• Diversification within a fixed-income portfolio.

Fundamental Rating Based on AI:

8.5 out of 10

SUSG receives a high rating due to its strong financial performance, experienced management team, and robust ESG focus. The ETF's competitive expense ratio and high liquidity also contribute to its overall appeal. However, investors should be aware of the potential for interest rate and credit risks associated with bond investments.

Resources and Disclaimers:

• iShares ESG Advanced Investment Grade Corporate Bond ETF (SUSG): https://www.ishares.com/us/products/etf-detail?ticker=SUSG&country=US&lang=en
• Bloomberg MSCI US Corporate Sustainability Advanced ESG Select Liquid Index: https://www.msci.com/documents/10199/0dfc2be5-f635-485e-aee7-c157c787e931
• Morningstar: https://www.morningstar.com/etfs/gbs/susg/performance
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions.