IndexIQ Active ETF Trust - IQ MacKay ESG Core Plus Bond ETF (ESGB)

ETF IndexIQ Active ETF Trust - IQ MacKay ESG Core Plus Bond ETF (MACK)

Profile:

MACK is an actively managed ETF that invests primarily in investment-grade fixed-income securities issued by U.S. and non-U.S. companies. The ETF focuses on ESG (Environmental, Social, and Governance) criteria, seeking to invest in companies with strong ESG practices.

Objective:

The primary objective of MACK is to provide a high level of current income and long-term capital appreciation with a focus on ESG investing.

Issuer:

MACK is issued by IndexIQ, a subsidiary of New York Life Investment Management.

Reputation and Reliability:

IndexIQ, founded in 2008, is a growing player in the ETF industry with approximately $18 billion in assets under management. The company has a good reputation for innovation and its focus on ESG investing is in line with growing investor demand.

Management:

The ETF is managed by MacKay Shields, a seasoned fixed-income investment firm with over 80 years of experience. The portfolio managers have a strong track record of managing fixed-income portfolios.

Market Share:

MACK is a relatively small ETF in the fixed-income space with approximately $0.4 billion in assets under management.

Total Net Assets:

$0.4 billion (as of November 2023)

Moat:

MACK's competitive advantage lies in its unique combination of active management, ESG focus, and access to the expertise of MacKay Shields.

Financial Performance:

Since its inception in June 2022, MACK has delivered a total return of approximately 7.5% (as of November 2023). This outperforms the Bloomberg Barclays US Aggregate Bond Index, which returned approximately 6.5% over the same period.

Growth Trajectory:

The growing demand for ESG investing and the strong performance of the ETF suggest a positive growth trajectory for MACK.

Liquidity:

The average daily trading volume of MACK is approximately 10,000 shares. The bid-ask spread is low, indicating high liquidity.

Market Dynamics:

The ETF's performance is primarily influenced by interest rate movements, economic conditions, and ESG factors.

Competitors:

Key competitors include iShares ESG Aware USD Corporate Bond ETF (ESGU), Vanguard ESG US Corporate Bond ETF (VCEB), and Nuveen ESG Focused U.S. Corporate Bond ETF (NUVE).

Expense Ratio:

The expense ratio of MACK is 0.55%.

Investment Approach and Strategy:

MACK uses an active management approach to select individual bonds based on their credit quality, potential for income generation, and ESG profile. The ETF invests primarily in U.S. dollar-denominated investment-grade corporate bonds.

Key Points:

• Actively managed ETF with an ESG focus.
• Strong track record of outperforming its benchmark.
• Moderate expense ratio.
• Good liquidity.

Risks:

• Interest rate risk: Rising interest rates can lead to a decline in the value of fixed-income securities.
• Credit risk: The ETF invests in bonds of varying credit quality, which can lead to defaults.
• ESG risk: The ETF's focus on ESG factors may limit its ability to track the broader bond market.

Who Should Consider Investing:

MACK is suitable for investors seeking a high level of current income and long-term capital appreciation, with a focus on ESG investing.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of the factors mentioned above, MACK receives a fundamental rating of 8 out of 10. The rating is supported by the ETF's strong track record, experienced management team, and unique ESG focus. However, the relatively small size of the ETF and its limited track record represent potential risks.

Resources and Disclaimers:

• IndexIQ website: https://www.indexiq.com/
• MacKay Shields website: https://www.mackayshields.com/
• Bloomberg Terminal for historical performance data and net asset value.

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.