ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Dual Impact Channel
  2. For Bond Rebound, Consider ESGB
Dual Impact Channel
Share

For Bond Rebound, Consider ESGB

Tom LydonDec 07, 2022
2022-12-07

The widely observed Bloomberg US Aggregate Bond Index is down 12% year-to-date, confirming that 2022 will be an utterly forgettable year for bonds.

Six interest rate increases by the Federal Reserve will do that. On the other hand, all that gloominess is giving way to optimism that 2023 will be better for fixed income assets, and that could spur renewed interest in the related exchange traded funds.

With investors focusing on both the possibility of a bond resurgence as well as the combination of fixed income and environmental, social, and governance (ESG) advantages, the IQ MacKay ESG Core Plus Bond ETF (ESGB B-) could be an ETF to watch in 2023. In fact, ESGB’s quality traits could be ideal for what could be a bumpy ride back in the fixed income market.

“It’s likely to be a bumpy ride due to the cross currents created by global central banks’ tightening policies, a volatile global economy, and ongoing political uncertainty here and abroad. Despite these challenges, we see opportunities in 2023 for the bond market to provide investors with attractive yields at lower risk than we’ve seen for several years,” according to Charles Schwab research.

The actively managed ESGB holds 474 bonds, which is far less than a traditional, passive aggregate bond fund. That’s a sign that just a sliver of the broader bond market credibly earns strong ESG ratings, but that’s also a signal that the combination of bonds and ESG is poised for exponential growth in the years ahead as more market participants demand access to ESG bonds.

As for ESGB’s 2023 rebound potential, several interesting factors highlight why the ETF could be uniquely positioned to deliver for investors in the new year.

“With starting yields low and the rate of change in tightening so fast, nearly every segment of the fixed income markets experienced declines, especially bonds with long durations,” added Schwab. “In fact, performance in 2022 year to date has been  an anomaly. Even in past periods of sharply rising interest rates, bonds have usually delivered positive returns since the income from a bond’s coupon offset price declines. However, during 2022, without the cushion of high coupon income, returns were historically weak.”

The actively managed ESGB allocates the bulk of its portfolio to U.S. government debt, indicating that credit risk is minimal with the fund. On that note, 71.8% of its holdings are rated AAA while another 10% carry BBB grades.

For more news, information, and strategy, visit the Dual Impact Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X