New York Life's IndexIQ files for new actively-managed fixed income ETF

IQ MacKay ESG Core Plus Bond ETF

Ticker: ESGB
Exchange: TBD
Expense ratio: TBD
Filing date: December 15, 2020
Effective date: March 01, 2021

 
Adviser: IndexIQ Advisors LLC (New York Life)
Sub-Adviser: MacKay Shields LLC (New York Life)

INVESTMENT PROCESS

Portfolio modified duration to worst within +/- 2.5 years from duration of Bloomberg Barclays U.S. Aggregate Bond Index

At least 80% of fund assets to be invested in bonds:

• debt or debt-related securities issued or guaranteed by the U.S. or foreign governments that are members of the Organization for Economic Cooperation and Development (“OECD”), their agencies or instrumentalities; 
• obligations of international or supranational entities; 
• debt securities issued by U.S. or foreign corporate entities; 
• zero coupon bonds; 
• municipal bonds; 
• mortgage-related and other asset-backed securities; 
• loan participation interests

The Fund’s bond investments may have fixed or floating rates of interest. 

ESG

MacKay Shields LLC (the “Subadvisor”) seeks to invest in securities that meet environmental, social, and corporate governance (ESG) standards as measured by its proprietary ESG methodology:

• The Fund will not invest in securities of issuers that the Subadvisor determines derive greater 5% of their revenue from the production, distribution, and services of coal, manufacturing of military equipment, alcoholic beverages, and tobacco products, operation of gambling casinos, and the production or trade of pornographic materials. 

• The Fund will only invest in energy-related securities that the Subadvisor determines to be transitioning to more sustainable business practices or in energy-related securities issued to generate proceeds that will be used to finance or re-finance sustainability-related projects. 

• The Fund will not invest in the securities of issuers determined by the Subadvisor to not meet the Subadvisor’s human rights, labor standards, environmental, and anti-corruption screening criteria.

OTHER INVESTMENTS

• The Fund may invest up to 30% of its total assets in securities rated below investment grade by a nationally recognized statistical rating organization (“NRSRO”) (such securities rated lower than BBB- and Baa3).

• The Fund may invest in mortgage dollar rolls, to-be-announced ("TBA") securities transactions, variable rate notes and floating rate notes. 

• The Fund may invest up to 20% of its net assets in securities of foreign issuers, including up to 10% of its net assets in securities of emerging market issuers. 

• The Fund may invest up to 20% of its net assets in securities denominated in a currency other than the U.S. dollar. 

• The Fund may invest up to 5% of its net assets in common stocks. 

• To the extent possible, the Fund will attempt to hedge its foreign currency exposure against the U.S. dollar. 

• The Fund may also invest in derivatives such as futures, options and swap agreements to try to enhance returns or reduce the risk of loss by hedging certain of its holdings. 

• Commercial paper must be, when purchased, rated in the highest rating category by a NRSRO or if unrated, determined by the Subadvisor to be of comparable quality.

Prospectus is here.

Portfolio managers:

Joseph Cantwell

Stephen Cianci, CFA

Neil Moriarty

Alexandra Wilson-Elizondo

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