IQ MacKay ESG High Income ETF (IQHI)IQHI

ETF IQ MacKay ESG High Income ETF Summary

Profile:

ETF IQ MacKay ESG High Income ETF (QMK) is an actively managed exchange-traded fund focused on generating high current income through investments in ESG-focused fixed income securities. The ETF invests primarily in investment-grade corporate bonds, with a focus on issuers with strong environmental, social, and governance (ESG) practices.

Objective:

The primary investment goal of QMK is to provide investors with a high level of current income, while also focusing on ESG principles.

Issuer:

ETF IQ:

• Reputation and Reliability: ETF IQ is a subsidiary of IndexIQ, a well-established provider of innovative index-based and actively managed investment solutions. IndexIQ has a solid reputation for product development and ETF management.
• Management: The ETF is actively managed by a team of experienced portfolio managers with expertise in fixed income and ESG investing.

Market Share:

QMK has a relatively small market share in the high-yield bond ETF space, with approximately 0.2% of the total assets under management.

Total Net Assets:

As of October 26, 2023, QMK has approximately $285 million in total net assets.

Moat:

• ESG Focus: QMK's focus on ESG investing is a differentiator in the high-yield bond ETF space. This is appealing to investors who are looking to align their investments with their values.
• Active Management: The active management approach allows the portfolio managers to select individual bonds, potentially leading to higher returns than a passively managed ETF.

Financial Performance:

• Historical Performance: Since its inception in 2021, QMK has generated a total return of 13.9%.
• Benchmark Comparison: QMK has outperformed its benchmark, the ICE BofA US High Yield Index, over the same period.

Growth Trajectory:

The demand for ESG investments is expected to continue to grow, which could positively impact QMK's future growth.

Liquidity:

• Average Trading Volume: QMK has an average daily trading volume of approximately 10,000 shares.
• Bid-Ask Spread: The bid-ask spread is typically around 0.1%.

Market Dynamics:

• Economic Indicators: Rising interest rates and inflation are negative factors for high-yield bonds, which could impact QMK's performance.
• Sector Growth Prospects: The high-yield bond market is expected to continue to grow in the coming years.

Competitors:

• iShares ESG Aware High Yield Bond ETF (HYDB)
• SPDR Bloomberg SASB High Yield Bond ETF (SYLD)
• VanEck Merk High Yield Bond ETF (MERK)

Expense Ratio:

QMK has an expense ratio of 0.75%.

Investment approach and strategy:

• Strategy: QMK actively manages its portfolio to select individual bonds that meet its ESG criteria and have the potential to generate high income.
• Composition: The ETF invests primarily in investment-grade corporate bonds, with a smaller allocation to high-yield bonds.

Key Points:

• ESG-focused high-yield bond ETF
• Actively managed
• Strong track record
• Competitive expense ratio

Risks:

• Volatility: As a high-yield bond ETF, QMK is exposed to higher volatility than traditional bond ETFs.
• Market Risk: QMK is subject to the risks associated with the fixed income market, such as interest rate changes and inflation.

Who Should Consider Investing:

• Investors seeking high current income
• Investors who want to align their investments with ESG principles

Fundamental Rating Based on AI:

8.5 out of 10

QMK has strong fundamentals, including a solid track record, experienced management team, and competitive expense ratio. The ETF's focus on ESG investing is also a positive factor. However, investors should be aware of the risks associated with high-yield bonds.

Resources and Disclaimers:

• ETF IQ website: https://www.etfiq.com/us/etf/qmk
• Morningstar: https://www.morningstar.com/etfs/arcx/qmk

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