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Is Inspire Corporate Bond ESG ETF (IBD) a Strong ETF Right Now?
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Designed to provide broad exposure to the Investment Grade Corporate Bond ETFs category of the market, the Inspire Corporate Bond ESG ETF (IBD - Free Report) is a smart beta exchange traded fund launched on 07/10/2017.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Inspire, IBD has amassed assets over $225.34 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Inspire Corporate Bond Impact Equal Weight Index.
The Inspire Corporate Bond Impact Equal Weight Index is comprised of 250 investment grade, intermediate term corporate bonds issued by some of the most inspiring large cap blue chip companies in the United States.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.44%.
It has a 12-month trailing dividend yield of 1.39%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Usd accounts for about 4.01% of the fund's total assets, followed by Cboeglobalmarketsinc.3.6501/12/27 (12503MAA6) and Parker-Hannifincorp.31/406/14/29 (701094AN4).
Its top 10 holdings account for approximately 13.08% of IBD's total assets under management.
Performance and Risk
So far this year, IBD has lost about -7.16%, and is down about -7.73% in the last one year (as of 05/13/2022). During this past 52-week period, the fund has traded between $23.53 and $26.52.
The fund has a beta of 0.16 and standard deviation of 7.92% for the trailing three-year period. With about 226 holdings, it effectively diversifies company-specific risk.
Alternatives
Inspire Corporate Bond ESG ETF is not a suitable option for investors seeking to outperform the Investment Grade Corporate Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.70 billion in assets, iShares ESG Aware MSCI USA ETF has $22.35 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Investment Grade Corporate Bond ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Inspire Corporate Bond ESG ETF (IBD) a Strong ETF Right Now?
Designed to provide broad exposure to the Investment Grade Corporate Bond ETFs category of the market, the Inspire Corporate Bond ESG ETF (IBD - Free Report) is a smart beta exchange traded fund launched on 07/10/2017.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Inspire, IBD has amassed assets over $225.34 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Inspire Corporate Bond Impact Equal Weight Index.
The Inspire Corporate Bond Impact Equal Weight Index is comprised of 250 investment grade, intermediate term corporate bonds issued by some of the most inspiring large cap blue chip companies in the United States.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.44%.
It has a 12-month trailing dividend yield of 1.39%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Usd accounts for about 4.01% of the fund's total assets, followed by Cboeglobalmarketsinc.3.6501/12/27 (12503MAA6) and Parker-Hannifincorp.31/406/14/29 (701094AN4).
Its top 10 holdings account for approximately 13.08% of IBD's total assets under management.
Performance and Risk
So far this year, IBD has lost about -7.16%, and is down about -7.73% in the last one year (as of 05/13/2022). During this past 52-week period, the fund has traded between $23.53 and $26.52.
The fund has a beta of 0.16 and standard deviation of 7.92% for the trailing three-year period. With about 226 holdings, it effectively diversifies company-specific risk.
Alternatives
Inspire Corporate Bond ESG ETF is not a suitable option for investors seeking to outperform the Investment Grade Corporate Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.70 billion in assets, iShares ESG Aware MSCI USA ETF has $22.35 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Investment Grade Corporate Bond ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.