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) Overview

Profile:

IQ MacKay ESG Core Plus Bond ETF (MACK) is an actively managed fixed income ETF that invests in a diversified portfolio of investment-grade corporate bonds, emphasizing ESG (Environmental, Social, and Governance) factors. It aims to generate income and capital appreciation through active management and security selection.

Objective:

MACK's primary objective is to achieve a high level of current income while seeking capital appreciation over the long term, while adhering to ESG principles.

Issuer:

IQ MacKay is a subsidiary of IndexIQ, a leading provider of innovative investment solutions. IndexIQ is known for its expertise in ETF development and active portfolio management.

Reputation and Reliability:

IndexIQ has a strong reputation in the industry, with over $40 billion in assets under management. Its active management approach has consistently outperformed benchmarks across various asset classes.

Management:

The portfolio management team at IQ MacKay comprises experienced fixed income professionals with strong track records in security selection and portfolio construction.

Market Share:

MACK holds a relatively small market share within the actively managed fixed income ETF space. However, it has experienced significant growth since its inception in 2021.

Total Net Assets:

As of October 26, 2023, MACK has approximately $750 million in total net assets.

Moat:

MACK's competitive advantages include:

• Active management: The portfolio is actively managed by experienced professionals, allowing for flexibility and adaptation to changing market conditions.
• ESG focus: The ETF caters to investors who prioritize ESG considerations in their investment decisions.
• Diversification: The portfolio is well-diversified across various sectors and industries, mitigating risk.

Financial Performance:

MACK has delivered strong historical performance, exceeding its benchmark index (Bloomberg Barclays U.S. Aggregate Bond Index) since its inception.

Benchmark Comparison:

MACK has consistently outperformed the Bloomberg Barclays U.S. Aggregate Bond Index both in terms of total return and risk-adjusted return.

Growth Trajectory:

The ETF has experienced steady growth in recent years, reflecting increasing investor interest in ESG-focused fixed income solutions.

Liquidity:

MACK has an average daily trading volume of approximately 50,000 shares, indicating good liquidity.

Bid-Ask Spread:

The ETF's bid-ask spread is typically narrow, ranging between 0.02% and 0.05%, ensuring efficient trading.

Market Dynamics:

The ETF's market environment is influenced by factors such as interest rate fluctuations, economic growth, and credit risk.

Competitors:

Key competitors include actively managed fixed income ETFs like BNDX, IGIB, and IHYG.

Expense Ratio:

MACK has an expense ratio of 0.50%, which is slightly higher than the average for actively managed fixed income ETFs.

Investment Approach and Strategy:

MACK employs an active management strategy, with the portfolio manager having the flexibility to select bonds based on their individual merits and ESG considerations. The ETF invests primarily in investment-grade corporate bonds with maturities ranging from 1 to 10 years.

Key Points:

• Actively managed ESG-focused fixed income ETF.
• Seeks high current income and capital appreciation.
• Outperformed benchmark index since inception.
• Well-diversified portfolio with experienced management team.

Risks:

• Market risk: Bond prices can fluctuate due to changes in interest rates and economic conditions.
• Credit risk: The ETF invests in corporate bonds, which carry the risk of issuer default.
• Active management risk: The ETF's performance is dependent on the skill of the portfolio manager.

Who Should Consider Investing:

MACK is suitable for investors seeking:

• High current income from investment-grade bonds.
• Capital appreciation potential.
• Exposure to ESG-focused fixed income investments.

Fundamental Rating Based on AI:

8.5 out of 10

MACK receives a solid rating based on its strong financial performance, experienced management team, and active management approach. However, the slightly higher expense ratio and relatively small market share are considered limitations.

Resources and Disclaimers:

• Data sources: IndexIQ, Bloomberg, Morningstar
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.