 The
IQ Mackay ESG Core Plus Bond ETF (ESGB) is an exchange-traded fund
that seeks to provide exposure to U.S. investment-grade fixed income
securities while incorporating environmental, social, and governance
(ESG) factors in the security selection process. The ETF is managed by
IndexIQ Advisors LLC and tracks the IQ Mackay ESG Core Plus Bond
Index.
ESGB aims to provide broad-based exposure to the U.S.
investment-grade fixed income market while focusing on companies that
demonstrate a strong commitment to ESG practices. The fund seeks to
achieve its investment objective by investing in a diversified
portfolio of fixed income securities, which may include government
bonds, corporate bonds, and mortgage-backed securities.
One
unique aspect of ESGB is its use of a multi-factor ESG scoring system
to select securities. The scoring system takes into account a variety
of ESG factors, including climate change, diversity and inclusion,
labor and human rights, and business ethics. The securities are then
weighted according to their ESG scores.
ESGB's expense ratio is
0.18%, which is relatively low compared to other actively managed bond
funds. As of September 2021, the fund had over $68 million in assets
under management.
Investors considering ESGB should be aware of
the risks associated with investing in fixed income securities,
including interest rate risk, credit risk, and inflation risk.
Additionally, ESG investments may be subject to greater volatility and
potential losses due to the exclusion of certain sectors or companies
from the investment universe.
Overall, the IQ Mackay ESG Core
Plus Bond ETF may be a suitable option for investors looking to
incorporate ESG considerations into their fixed income portfolios
while maintaining broad exposure to the U.S. investment-grade bond
market.
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