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Is Inspire Corporate Bond ETF (IBD) a Strong ETF Right Now?
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The Inspire Corporate Bond ETF (IBD - Free Report) made its debut on 07/10/2017, and is a smart beta exchange traded fund that provides broad exposure to the Investment Grade Corporate Bond ETFs category of the market.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Inspire. It has amassed assets over $297.56 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. IBD, before fees and expenses, 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.
Annual operating expenses for this ETF are 0.45%, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.73%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Devonenergycorp. Accounts for about 0.69% of total assets, followed by Trimbleinc and Alexandriarealestateequitiesinc.
The top 10 holdings account for about 6.66% of total assets under management.
Performance and Risk
The ETF has added roughly 0.52% and is up about 4% so far this year and in the past one year (as of 05/16/2024), respectively. IBD has traded between $22.22 and $23.99 during this last 52-week period.
The fund has a beta of 0.22 and standard deviation of 5.91% for the trailing three-year period. With about 251 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 USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $13.04 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $13.24 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.
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?
The Inspire Corporate Bond ETF (IBD - Free Report) made its debut on 07/10/2017, and is a smart beta exchange traded fund that provides broad exposure to the Investment Grade Corporate Bond ETFs category of the market.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Inspire. It has amassed assets over $297.56 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. IBD, before fees and expenses, 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.
Annual operating expenses for this ETF are 0.45%, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.73%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Devonenergycorp. Accounts for about 0.69% of total assets, followed by Trimbleinc and Alexandriarealestateequitiesinc.
The top 10 holdings account for about 6.66% of total assets under management.
Performance and Risk
The ETF has added roughly 0.52% and is up about 4% so far this year and in the past one year (as of 05/16/2024), respectively. IBD has traded between $22.22 and $23.99 during this last 52-week period.
The fund has a beta of 0.22 and standard deviation of 5.91% for the trailing three-year period. With about 251 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 USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $13.04 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $13.24 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.
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.