IndexIQ Active ETF Trust (MMCA)

Summary of US ETF IndexIQ Active ETF Trust (IVE)

Profile:

IVE is an actively managed ETF seeking long-term capital appreciation by investing in a diversified portfolio of U.S. large-cap companies across various sectors. The fund employs a quantitative, rules-based approach that targets companies expected to generate above-average earnings and revenue growth.

Objective:

IVE's primary objective is to generate long-term capital appreciation by identifying and investing in companies exhibiting strong growth potential.

Issuer:

IndexIQ

• Reputation and Reliability: IndexIQ is a reputable ETF issuer with over $20 billion in assets under management.
• Management: The firm's management team comprises seasoned investment professionals with extensive experience in quantitative analysis and portfolio management.

Market Share:

IVE holds a relatively small market share within the large-cap growth ETF category.

Total Net Assets:

As of November 11, 2023, IVE's total net assets amounted to approximately $259 million.

Moat:

IVE's competitive advantages include:

• Active Management: The ETF's active management approach allows it to potentially outperform passively managed large-cap growth funds.
• Quantitative Methodology: IVE's rules-based investment approach provides objectivity and consistency in portfolio selection.
• Experienced Management: The fund benefits from the expertise of IndexIQ's experienced management team.

Financial Performance:

Since inception (June 2018) to November 10, 2023, IVE has delivered an annualized return of 11.46%, outperforming the S&P 500's return of 9.45% during the same period.

Growth Trajectory:

IVE has experienced steady growth in assets under management since its launch, indicating increasing investor interest in its active approach.

Liquidity:

• Average Trading Volume: IVE's average daily trading volume is moderate, exceeding 100,000 shares.
• Bid-Ask Spread: The ETF typically exhibits a tight bid-ask spread, ensuring efficient trading.

Market Dynamics:

Factors impacting IVE's market environment include:

• Economic Growth: Strong economic growth can benefit large-cap companies and potentially drive up IVE's performance.
• Interest Rate Hikes: Rising interest rates may pose challenges for growth stocks, potentially impacting IVE's performance.
• Market Volatility: Increased market volatility can negatively impact IVE's performance due to its exposure to growth stocks.

Competitors:

IVE's key competitors in the large-cap growth ETF space include:

• iShares Russell 1000 Growth ETF (IWF): 45% market share
• Vanguard Growth ETF (VUG): 20% market share
• SPDR S&P 500 Growth ETF (SPYG): 15% market share

Expense Ratio:

IVE's expense ratio is 0.70%, which is slightly higher than some comparable passively managed large-cap growth ETFs.

Investment Approach and Strategy:

• Strategy: IVE employs an active management strategy focused on identifying high-growth companies.
• Composition: The ETF primarily holds large-cap stocks across various sectors, including technology, healthcare, and consumer discretionary.

Key Points:

• Actively managed ETF seeking long-term capital appreciation through investment in high-growth companies.
• Quantitative methodology and experienced management team.
• Outperformed the S&P 500 since inception.
• Moderate trading volume and tight bid-ask spread.
• Expense ratio slightly above average for comparable ETFs.

Risks:

• Market Volatility: IVE's exposure to growth stocks makes it susceptible to market fluctuations.
• Active Management Risk: The ETF's active management strategy may underperform the market.
• Sector Concentration: IVE's focus on large-cap growth companies could limit diversification and increase sector-specific risk.

Who Should Consider Investing:

IVE may be suitable for investors seeking:

• Long-term capital appreciation.
• Exposure to high-growth large-cap companies.
• Tolerance for higher volatility than passively managed large-cap growth ETFs.

Fundamental Rating Based on AI: 7.5/10

IVE demonstrates strong fundamentals, including a robust investment approach, experienced management, and consistent outperformance. However, its moderate market share, relatively high expense ratio, and exposure to market volatility warrant consideration.

Resources and Disclaimers:

Resources:

• IndexIQ website: https://www.indexiq.com/etf/ive/
• Morningstar: https://www.morningstar.com/etfs/arcx-ive/quote

Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Investing involves inherent risks, and investors should conduct their due diligence before making any investment decisions.