Moody’s Analytics announced that it is working with VanEck, a global investment manager, as a data and analytics provider for two new exchange-traded funds (ETFs). The funds are VanEck Vectors® Moody’s Analytics® IG Corporate Bond ETF (MIG®), whichfocuses on the US corporate investment-grade market, and the VanEck Vectors® Moody’s Analytics® BBB Corporate Bond ETF (MBBB®), which concentrates on the market’s BBB segment, for bonds with the lowest investment grade rating.
Moody’s Analytics has offered its credit risk metrics for use in the indices underlying these two new VanEck funds. VanEck is using several data points produced by the Moody’s Analytics industry-leading CreditEdgeTM solution as inputs for the indices underlying the new ETFs.
These metrics are based on information from financial markets and are combined with a detailed picture of a company’s capital structure. They are used by investors for credit quality assessment and to identify corporate securities that offer attractive spreads relative to their market-implied credit risk.
In recent years, the ETF industry has grown in popularity as investors look for new smart beta fixed-income strategies. Many ETFs performed well during the financial crisis of 2007-08 and are performing strongly now, even amid the economic downturn caused by the COVID-19 pandemic.
“The CreditEdge solution has a comprehensive set of credit risk metrics for early warning detection of credit deterioration,” said Nihil Patel, Managing Director at Moody’s Analytics. “These metrics have been shown to help identify undervalued corporate securities. We are pleased that VanEck will be using these metrics as key inputs for the indices underlying their new ETFs.”
“The new corporate bond funds are designed to provide investors with robust new tools to enhance their investment-grade bond exposures,” said Fran Rodilosso, Head of Fixed Income ETF Portfolio Management at VanEck. “They offer investors income potential and outperformance without having to assume excessive risk—particularly important in this prolonged low-yield environment.”