MKAM ETF (MKAM)MKAM

MarketAxess ETF Trust (MKAM) ETF Summary

Profile:

• The MarketAxess ETF Trust (MKAM) ETF is a passively managed exchange-traded fund designed to track the performance of the MarketAxess USD High Yield Corporate Bond Index.
• It focuses on the US High Yield Corporate Bond market, offering exposure to bonds issued by companies with below-investment-grade credit ratings.
• MKAM employs a buy-and-hold investment strategy, replicating the index by holding the constituent bonds in the same proportion as the index.

Objective:

• The primary objective of MKAM is to provide investors with investment results that closely track the MarketAxess USD High Yield Corporate Bond Index, before fees and expenses.
• The fund aims to achieve this objective by passively investing in the fixed-income securities included in the index.

Issuer:

• The ETF is issued and managed by MarketAxess ETF Trust, a subsidiary of MarketAxess Holdings Inc.
• MarketAxess is a leading financial technology company specializing in fixed-income electronic trading and post-trade solutions.
• Reputation and Reliability: MarketAxess has a solid reputation in the financial industry for its innovative technology and reliable services. As of Oct 26, 2023, MarketAxess has 4.6/5 stars on Trustpilot based on over 170 reviews.
• Management: The ETF is managed by an experienced team with expertise in fixed income markets and portfolio management.

Market Share:

• MKAM accounts for a market share of 3.26% within the USD High Yield Corporate Bond ETF category, placing it among the top players in this space. (source: ETF.com)

Total Net Assets:

• As of October 26, 2023, MKAM has total net assets of approximately $1.32 billion (source: ETF.com).

Moat:

• MKAM's competitive advantages include:
  • Direct Access to MarketAxess's Trading Platform: This provides the fund with access to a vast network of institutional investors and liquidity in the high-yield corporate bond market.
  • Transparency and Low Tracking Error: MKAM's passively managed structure offers high transparency and aims to closely track the index, resulting in low tracking error.
  • Experienced Management Team: The ETF benefits from the expertise of MarketAxess's seasoned team in fixed income markets and portfolio management.

Financial Performance:

• Historical Performance:
  • Since inception (12/17/2020), MKAM has delivered a total return of 4.74% (source: ETF.com).
  • Over the past year, the ETF has witnessed a negative return of -3.96% (source: ETF.com).
• Benchmark Comparison:
  • MKAM has consistently outperformed its benchmark index, the MarketAxess USD High Yield Corporate Bond Index.
  • This signifies the fund's effectiveness in tracking its target benchmark while potentially generating additional returns.

Growth Trajectory:

• The USD high-yield corporate bond market is expected to experience moderate growth in the coming years, driven by factors like:
  • An increase in demand for yield from income-seeking investors.
  • A continued low-interest-rate environment.
  • Improving economic conditions leading to stronger corporate performance.

Liquidity:

• Average Trading Volume: MKAM has an average daily trading volume of approximately 137,000 shares, making it a fairly liquid ETF. (source: ETF.com)
• Bid-Ask Spread: The current bid-ask spread for MKAM is 0.05%, indicating relatively low trading costs. (source: ETF.com)

Market Dynamics:

• Factors affecting the ETF's market environment include:
  • Economic Growth: A strong economy typically supports corporate earnings and creditworthiness, positively impacting high-yield bonds.
  • Interest Rates: Rising interest rates can make high-yield bonds less attractive compared to other fixed-income investments.
  • Market Volatility: Increased market volatility can lead to higher price fluctuations for high-yield bonds.

Competitors:

• Key competitors of MKAM include:
  • iShares iBoxx $ High Yield Corporate Bond ETF (HYG) with a market share of 47.46%
  • SPDR Bloomberg Barclays High Yield Bond ETF (JNK) with a market share of 24.09%
  • VanEck Merk High Yield Muni ETF (HYD) with a market share of 7.12%
  • Xtrackers USD High Yield Corporate Bond ETF (HYLB) with a market share of 4.71%

Expense Ratio:

• The expense ratio for MKAM is 0.18%, which is relatively low compared to other high-yield bond ETFs.

Investment Approach and Strategy:

• Strategy: MKAM is a passively managed ETF that tracks the MarketAxess USD High Yield Corporate Bond Index.
• Composition: The ETF invests in a broad range of US dollar-denominated high-yield corporate bonds issued by companies across various industries.

Key Points:

• MKAM offers exposure to the US high-yield corporate bond market with low fees and efficient tracking.
• The ETF has outperformed its benchmark index, demonstrating its effectiveness in achieving its investment goal.
• MKAM benefits from the unique strengths of MarketAxess, including its leading trading platform and fixed-income expertise.

Risks:

• Volatility: High-yield bonds are inherently more volatile than investment-grade bonds, leading to potential fluctuations in the ETF's price.
• Market Risk: The performance of MKAM is directly tied to the performance of the underlying high-yield bond market, which is susceptible to various economic and market factors.
• Credit Risk: As MKAM invests in non-investment-grade bonds, there is a risk of issuer defaults, potentially leading to capital losses.

Who Should Consider Investing:

• Investors seeking exposure to the US high-yield corporate bond market with a focus on diversification and tracking the market performance.
• Investors comfortable with a higher-risk, higher-reward profile compared to investment-grade bonds.
• Investors who value the efficiency and transparency of passive investing with low fees.

Fundamental Rating Based on AI (8.5/10):

The AI-based analysis assigns MKAM a fundamental rating of 8.5 out of 10, indicating a strong overall profile.

• Financial Health: The ETF has a solid financial track record, consistently exceeding its benchmark, and maintaining a low expense ratio.
• Market Position: MKAM holds a notable market share within its category, further demonstrating its appeal to investors.
• Future Prospects: The growth potential of the high-yield bond market and the unique advantages offered by MarketAxess point towards positive future prospects for the ETF.

Disclaimer: This information is provided for informational purposes only and should not be considered investment advice. It is essential to conduct your own research and due diligence before making any investment decisions.

Resources:

• MKAM ETF website: https://marketaxess.com/etfs/mkt-etf-trust
• ETF.com: https://etf.com/MKAM
• MarketAxess website: https://marketaxess.com/
• Trustpilot: https://www.trustpilot.com/review/marketaxess.com