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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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
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 managed by Inspire. IBD has been able to amass assets over $338.26 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. Before fees and expenses, IBD 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.44% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.16%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Trimble Inc 4.9 06/15/28 (896239AC4) accounts for about 1.53% of total assets, followed by Arch Capital Group Ltd 4.011 12/15/26 (03939CAA1) and Alexandria Real Estate Equities Inc. 4.9 12/15/30 (015271AU3).
The top 10 holdings account for about 15.04% of total assets under management.
Performance and Risk
So far this year, IBD has added roughly 0.43%, and is up about 4.25% in the last one year (as of 01/21/2025). During this past 52-week period, the fund has traded between $23.04 and $24.29.
The fund has a beta of 0.24 and standard deviation of 6.24% 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 $13.50 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $21.76 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?
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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
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 managed by Inspire. IBD has been able to amass assets over $338.26 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. Before fees and expenses, IBD 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.44% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.16%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Trimble Inc 4.9 06/15/28 (896239AC4) accounts for about 1.53% of total assets, followed by Arch Capital Group Ltd 4.011 12/15/26 (03939CAA1) and Alexandria Real Estate Equities Inc. 4.9 12/15/30 (015271AU3).
The top 10 holdings account for about 15.04% of total assets under management.
Performance and Risk
So far this year, IBD has added roughly 0.43%, and is up about 4.25% in the last one year (as of 01/21/2025). During this past 52-week period, the fund has traded between $23.04 and $24.29.
The fund has a beta of 0.24 and standard deviation of 6.24% 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 $13.50 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $21.76 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.