IQ MacKay ESG High Income ETF (IQHI)

ETF IQ MacKay ESG High Income ETF (HIEX): Summary Overview

Profile:
This ETF invests primarily within the high-dividend sector. HIEX seeks to provide high income, with a consistent high monthly income level through its actively-managed portfolio of large cap US equities that meet ESG (Environmental, Societal, and Governance) criteria.

Objective:
HIEX's main aim is to offer consistent, high monthly payouts with a focus on sustainability through ESG-driven investments in large US equities.

Issuer:

Company: ETF Series Solutions Trust Reputation and Track Record: ETFIQ is a relatively recent ETF issuer, formed in 2021. They are a subsidiary of Mackay Shields LLC, an established investment advisor founded in1972 with over $40 billion assets under management. Mackay Shield’s strong and positive financial track record adds credibility to HIEX. Management:
HIEX is subadvised by Mackay Global Management, LLC (MGM, formerly MFS Investment Management K.K.), with expertise in equity research and ESG integration.

*Market Shares: HIEX currently represents a small share of the high yield dividend ETF market. Total Net AUM: $32.32 million (data retrieved 11/8/2023)

Moat:
Unique features that distinguish HIEX:

• Focus: High monthly income generation, setting itself apart from other high-yield ETFs that prioritize total return.
• ESG-filtered investment: This strategy appeals investors with sustainability-focused portfolios.

**Financial Performance: **

• Historical data: HIEX is relatively new, making long- term performance analysis limited. Since inception on 07/29/2022 to 3/31/2023 it has yielded 75% total returns.

• Benchmark: Comparing against the S&P 500 Total Returns Index, HIEX has outperformed since inception by +0.21%. Market Dynamics: Economic growth directly influences dividend-paying equities. The high-yield equity sector's performance thrives in low and stable interest rate environments as investors find them more lucrative than fixed income alternatives.

Competitors:

• ** Vanguard High Dividend Yield ETF (VYM), 28.32% market Share.
• ** Fidelity High Dividend ETF(FDVV): 24.55% market shares.
• • iShares Select Dividend ETFs (DVY) 22.37% market shares.

*Expense Ratio: HIEX has a relatively high expense ratio at 1%, which includes the management fee and administrative expense.

Investing Strategy

• HIEX tracks the Cboe S.P. Dividend Aristocrat Select 50 ETF
• Composition: Invests in large cap stocks from the S&P 500 index that have consistently paid dividends for over 25years. These companies typically have strong track records of dividend payout stability and growth,

**Key Points: **

• ESG Focus: Attributed to investors who prioritize ESG criteria in their portfolios.
• High monthly dividends
• Growth-oriented strategy with an emphasis on income
• Large-capitalization portfolio

**Risks: **

• **Volatility: Moderate volatility due to its focus on equities.
• Interest rates: As interest rates rise, investors may shift away from high-yielding dividend stocks towards fixed income investments.

Who should consider investing?

• Income-oriented Investors seeking monthly payouts.
  • Investors with a long-term horizon.
• ESG-conscious individuals

Fundamental AI Rating: 7.8 / 10:

HIEX offers strong investment potential, though its recent launch limits historical performance data analysis. Its high monthly dividends, ESG focus, growth strategy, and large portfolio diversification provide a solid foundation for future success. However, the expense ratio is a downside to consider.

Disclaimer: The information provided is not financial and should not be interpreted as investment advice for your situation. You should do your own research, review investment terms carefully, and consult financial advisors to ensure suitability.

Resources

• https://www.etfiiq.com/fixed_income/etfqhiex.xml
• https://finance.yahoo.com
• https://finance.yahoo.com/quote/HIEX
• https://www.investopedia.com
• https://money.usnews.com/investing/articles