IQ MacKay ESG Core Plus Bond ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy merits an Average Process Pillar. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time. IQ MacKay ESG Core Plus Bond ETF earns an Average Process Pillar rating.    The leading factor in the rating is the firm's five-year retention rate of 87% over the period. The depth of the portfolio management team also supports the process. With five portfolio managers, the fund is well-staffed. Lastly, the process is limited by its parent firm's disappointing risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.8 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 Compared with other funds in the Intermediate Core-Plus Bond Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity over the past few years. Moreover, it has no significant biases in terms of credit quality, bond sectors, or maturity when compared to its category peers in recent years.   

 This strategy has a 5.0% 12-month yield, higher than its average peer's 3.9%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 5.5%. Higher yields tend to indicate higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated BBB.

Average

Process

IQ MacKay ESG Core Plus Bond ETF earns an Average People Pillar rating. The team is backed by Neil Moriarty, the longest-tenured manager on the strategy, who provides over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.0 stars, demonstrating average risk-adjusted performance. The team boasts an experienced corps of listed portfolio managers, with four others supporting Neil Moriarty. Together, they average 20 years of listed portfolio management experience.  None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

New York Life Investments' collection of autonomous investment boutiques will have a new leader in May 2023, and it will take time to assess his impact. The firm keeps its Average Parent rating.
New York Life, the insurance giant that owns NYL Investments, tapped Naïm Abou-Jaoudé to be the asset manager's CEO after the previous CEO departed. Abou-Jaoudé inherits a firm that has grown by building internally and through acquisition. The firm offers mandates in partnership with 13 different asset managers--eight of which are wholly or partially owned affiliates – through several global outlets. Most U.S. funds fall under the established MainStay brand, whereas IndexIQ oversees a growing lineup of ETFs managed both internally and by other affiliates. Candriam, at which Abou-Jaoudé has been CEO even prior to its 2014 acquisition by NYL Investments, takes the lead in Europe through its own offerings and through those subadvised by other boutiques.
Plenty of these capabilities are compelling, with Candriam and fellow affiliates MacKay Shields and Ausbil sporting standout teams in several wheelhouses. Yet many of the boutiques have also struggled with managing bloated lineups or with improving lagging teams. NYL Investments hasn't shied from changing subadvisors or merging platforms and doesn't have a spotless record of managing capacity or of avoiding trendy offerings.

Parent

IQ MacKay ESG Core Plus Bond ETF

ESGB actively invests in a wide range of corporate, government, mortgage-related and asset-backed securities, while aiming to maintain a portfolio modified duration to worst within 2.5 years of its benchmark. Up to 30% may be invested in high yield bonds, and up to 20% in foreign issuers.

Environmental, social, and governance (ESG) ratings are an increasingly prominent part of the investment lexicon and that theme extends to multiple asset classes, including bonds. As such, advisors and investors are clamoring for more fixed income exchange traded funds that integrate ESG principles.

Why ESG Is Meaningful With Fixed Income ETFs

In what's been a treacherous year in the bond market, it'd be reasonable to expect that investors are ditching fixed income funds. To an extent, that's true, but it's a matter of which bond funds they're departing.

Fixed Income Investors Continue Embracing ETFs

The widely observed Bloomberg US Aggregate Bond Index is down 12% year-to-date, confirming that 2022 will be an utterly forgettable year for bonds. Six interest rate increases by the Federal Reserve will do that.

ESGB Could Be Right Idea for Bond Rebound

There are just a few weeks remain in 2022, meaning that now is as good of a time as any for investors to consider tax loss harvesting opportunities, of which there are plenty, including ESGB.

Evaluate ESGB for Tax Loss Harvest Bond Opportunities

In a brutal year for fixed income assets, some advisors and investors may be looking for tax loss harvesting ideas or positioning for a 2023 bond rebound.

ESGB Could Be Ticket for Bond Rebound

Not surprisingly, the Federal Reserve on Wednesday revealed an interest rate increase of 75 basis points — its fifth such move this year. Some market observers are forecasting another 75 basis points hike in October followed by a 50 basis points hike in December.

Reconsidering Bond ETFs in ESG Fashion

It's been a rough year for fixed income investors, but now could be an opportune time for investors to part with some disappointing assets and consider tax harvesting by examining other investment ideas.

Examine ESGB Because Bonds Still Merit Attention

The universe of environmental, social, and governance (ESG) fixed income exchange traded funds is expanding, and while bonds are currently out of fashion due to interest rate tightening by the Federal Reserve, it could be an ideal time for investor to build watchlists of ESG bond ETFs. One fund worthy of that consideration is the [.

ESGB Right Bond ETF for Net-Zero Transition

In the world of environmental, social, and governance (ESG) exchange traded funds, the next wave of growth will likely be fueled by fixed income offerings. There's evidence that this groundswell is already materializing.

ESGB: Active Approach to ESG Fixed Income Expansion

As we explore the current marketplace, fixed income exchange traded fund investors should consider what to look for from their external fixed income managers and ways that asset managers can add value. In the recent webcast, Bonding Over Fixed Income: Beyond ESG Ratings and Labels, Janelle Woodward, president of MacKay Shields LLC, highlighted the growing [.

An Active ESG Bond ETF Can Help Fixed-Income Investors Add Value

High net worth investors are increasingly demanding ESG solutions from their financial advisors. But how do you fill that need when it comes to the fixed income side of the portfolio?

Bonding Over Fixed Income: Beyond ESG Ratings and Labels

The fund is likely the first of its kind in the fixed income ETF space.

News for IQ MacKay ESG Core Plus Bond ETF ETF (ESGB)