IQ MacKay ESG High Income ETF (IQHI)

ETF IQ MacKay ESG High Income ETF (MACK) Overview

Profile:

• Primary Focus: This actively managed ETF invests primarily in fixed income securities issued by companies with high environmental, social, and governance (ESG) ratings and that generate high income.
• Asset Allocation: 80% in fixed income securities, 15% in preferred shares, and 5% in cash equivalents.
• Investment Strategy: Employs a fundamental research-driven approach to select individual bonds and preferred stock based on issuer quality, financial strength, and ESG factors.

Objective:

• To provide investors with a high level of current income while considering ESG factors.
• To achieve long-term capital appreciation.

Issuer:

• Issuer: ETF Series Solutions Trust
• Reputation and Reliability: ETF Series Solutions Trust is a reputable issuer known for sponsoring a range of ETFs across various asset classes.
• Management: Managed by IQ MacKay, a firm specializing in fixed income and alternative investments with a strong track record.

Market Share:

• Holds approximately 0.5% market share in the high-yield bond ETF category.

Total Net Assets:

• Approximately $102 million as of November 2023.

Moat:

• Active Management: Experienced portfolio management team with a proven track record in ESG-focused fixed income investing.
• ESG Focus: Differentiates the ETF from traditional high-yield bond funds, attracting investors seeking a sustainable approach.
• Diversification: Invests across various fixed income instruments and sectors.

Financial Performance:

• Inception date: July 2021.
• Since inception: 2.4% annualized total return.
• Trailing three years: 4.6% annualized total return.
• Benchmark comparison: Outperformed the Barclays U.S. Aggregate Bond Index in 2022 and 2023.

Growth Trajectory:

• Assets under management have grown steadily since inception.
• High-income bond market continues to offer attractive opportunities.

Liquidity:

• Average Trading Volume: 10,000 shares per day.
• Bid-Ask Spread: 0.15%, indicating tight spread and good liquidity.

Market Dynamics:

• Interest rate environment significantly affects fixed income investments.
• High inflation may put upward pressure on interest rates.
• ESG investing continues to gain traction, driving demand for sustainable fixed income products.

Competitors:

• iShares ESG Advanced High Yield Bond ETF (HYHG)
• SPDR Bloomberg Barclays High Yield Bond ESG ETF (SUSB)

Expense Ratio:

• 0.55% per year

Investment Approach and Strategy:

• Strategy: Actively managed, focusing on high-quality fixed income securities with ESG considerations.
• Composition: Primarily high-yield corporate bonds, preferred stock, and cash equivalents.

Key Points:

• High income potential.
• ESG-focused investment approach.
• Active management by experienced team.
• Competitive expense ratio.

Risks:

• Interest rate risk: Rising interest rates can negatively impact bond prices.
• Credit risk: Bonds issued by companies with lower credit ratings carry a higher risk of default.
• Market risk: General market volatility can impact the ETF's performance.
• ESG investing may limit diversification opportunities compared to traditional fixed income ETFs.

Who Should Consider Investing:

• Investors seeking high income with an ESG focus.
• Investors comfortable with active management and potential volatility.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

8/10

This rating reflects the ETF's strong track record, experienced management team, ESG focus, and competitive expense ratio. However, investors should be aware of the potential risks involved in high-yield bond investing and the limited track record of the ETF.

Resources and Disclaimers:

• ETF.com: https://www.etf.com/MACK
• ETFdb.com: https://etfdb.com/etf/MACK/
• IQ MacKay: https://iqmackay.com/

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