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Is Inspire Corporate Bond ETF (IBD) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Inspire Corporate Bond ETF (IBD - Free Report) debuted on 07/10/2017, and offers broad exposure to the Investment Grade Corporate Bond ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Inspire. IBD has been able to amass assets over $222.59 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.44%.
The fund has a 12-month trailing dividend yield of 1.72%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Its top 10 holdings account for approximately 6.93% of IBD's total assets under management.
Performance and Risk
The ETF has gained about 1.65% and is down about -6.79% so far this year and in the past one year (as of 01/16/2023), respectively. IBD has traded between $22.24 and $25.42 during this last 52-week period.
IBD has a beta of 0.17 and standard deviation of 8.37% for the trailing three-year period. With about 249 holdings, it effectively diversifies company-specific risk.
Alternatives
Inspire Corporate Bond 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 $7.21 billion in assets, iShares ESG Aware MSCI USA ETF has $20.53 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 ETF (IBD) a Strong ETF Right Now?
A smart beta exchange traded fund, the Inspire Corporate Bond ETF (IBD - Free Report) debuted on 07/10/2017, and offers broad exposure to the Investment Grade Corporate Bond ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Inspire. IBD has been able to amass assets over $222.59 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.44%.
The fund has a 12-month trailing dividend yield of 1.72%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Its top 10 holdings account for approximately 6.93% of IBD's total assets under management.
Performance and Risk
The ETF has gained about 1.65% and is down about -6.79% so far this year and in the past one year (as of 01/16/2023), respectively. IBD has traded between $22.24 and $25.42 during this last 52-week period.
IBD has a beta of 0.17 and standard deviation of 8.37% for the trailing three-year period. With about 249 holdings, it effectively diversifies company-specific risk.
Alternatives
Inspire Corporate Bond 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 $7.21 billion in assets, iShares ESG Aware MSCI USA ETF has $20.53 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.