IndexIQ Active ETF Trust - IQ MacKay ESG Core Plus Bond ETF (ESGB)

Overview

The IQ MacKay ESG Core Plus Bond ETF (MKYB) is an actively managed ETF that seeks total return by investing in a diversified portfolio of investment-grade fixed-income securities, while also considering environmental, social, and governance (ESG) factors. It aims to outperform the Bloomberg Barclays U.S. Aggregate Bond Index.

Reputation and Reliability

IndexIQ has a solid reputation for innovative ETF solutions, including active and alternative strategies. They are known for their rules-based approach and strategic partnerships.

Management Expertise

MacKay Shields LLC serves as the sub-advisor, bringing extensive fixed-income management expertise and a strong focus on ESG integration.

Goal

To seek total return by investing in a diversified portfolio of investment-grade fixed-income securities, integrating ESG considerations.

Investment Approach and Strategy

Strategy: Actively managed, focusing on investment-grade bonds while incorporating ESG criteria. It does not track a specific index but uses the Bloomberg Barclays U.S. Aggregate Bond Index as a benchmark.

Composition Primarily holds investment-grade corporate bonds, government bonds, mortgage-backed securities, and asset-backed securities. ESG factors are integrated into the security selection process.

Market Share: Data not available for market share breakdown.

Total Net Assets (AUM): 75530000

Key Competitors

• AGG
• LQD
• VCSH
• SCHZ
• IEF

Competitive Landscape

The ETF industry for core plus bond funds is highly competitive. MKYB distinguishes itself through its active management and integration of ESG factors. Competitors such as AGG and LQD are passively managed, providing broad market exposure at a lower cost, while MKYB aims for outperformance through active security selection and ESG analysis. A disadvantage is MKYB's higher expense ratio compared to passively managed funds. A further disadvantage is MKYB's lower AUM.

Historical Performance: Historical performance data varies; refer to fund factsheet for specific returns over different time periods.

Benchmark Comparison: Performance is benchmarked against the Bloomberg Barclays U.S. Aggregate Bond Index; performance relative to the benchmark will vary based on market conditions and active management decisions.

Expense Ratio: 0.3

Average Trading Volume

The ETF exhibits moderate liquidity, with an average daily trading volume that can fluctuate based on market conditions.

Bid-Ask Spread

The bid-ask spread is typically competitive, reflecting the ETF's liquidity and trading activity.

Market Environment Factors

Economic growth, interest rate movements, inflation expectations, and credit spreads influence the ETF's performance. ESG investing trends also impact investor demand and market dynamics.

Growth Trajectory

Growth depends on the fund's ability to outperform its benchmark and attract assets, which is influenced by market conditions, investor interest in ESG, and the fund's investment strategy.

Competitive Edge

MKYB's competitive advantage lies in its active management and the integration of ESG factors. The fund seeks to generate alpha through strategic security selection and duration management, while also considering ESG principles. The MacKay Shields' expertise in fixed-income management and ESG analysis differentiates it from passive core bond ETFs. Its active approach allows it to adapt to changing market conditions and potentially generate higher returns, appealing to investors seeking both financial and social objectives.

Volatility

Volatility is influenced by interest rate risk, credit risk, and market risk. Active management can potentially mitigate some risks but does not eliminate them entirely.

Market Risk

The ETF is subject to market risk related to bond market fluctuations and economic conditions, as well as credit risk associated with the underlying bond holdings.

Ideal Investor Profile

Suitable for investors seeking income and capital appreciation from investment-grade bonds, who also prioritize ESG considerations. Investors who want active management and are willing to pay a slightly higher expense ratio may find this ETF appealing.

Market Risk

Suitable for long-term investors seeking a core bond allocation with ESG integration. Less suitable for active traders due to the focus on long-term investment and the nature of bond investments.

The IQ MacKay ESG Core Plus Bond ETF offers actively managed exposure to investment-grade bonds while incorporating ESG factors. Its goal is to outperform the Bloomberg Barclays U.S. Aggregate Bond Index through strategic security selection and duration management. The ETF is suitable for long-term investors seeking income and capital appreciation with a focus on ESG principles. However, its higher expense ratio compared to passive funds should be considered. Investors should assess their risk tolerance and investment objectives before investing.

Data Sources:

• IndexIQ ETF Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and consultation with a qualified financial advisor. Market data and fund information are subject to change.