The IQ Hedge Multi-Strategy Tracker ETF, the first hedge fund style ETF and the industry’s largest alternative exchange-traded fund, topped US$500 million in assets, it was announced by IndexIQ, the fund’s sponsor.
This represents a growth rate in excess of 50 percent year to date.
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Adam Patti, CEO, IndexIQ’s, said: "We are seeing tremendous interest in QAI from the financial advisor community, who increasingly are using the fund as their core hedge fund portfolio holding, while QAI also is being added to ETF model portfolios throughout the industry. In many cases, QAI is used to provide the liquid alternatives allocation in these models, while in other cases, it is viewed as a bond substitute.
"Using QAI as a fixed income alternative has resonated strongly with investors since QAI is designed to seek strong performance in rising rate environments with a similar volatility profile to the aggregate bond market, while providing a competitive yield. Since IndexIQ exceeded $1 billion in assets under management, and as the firm’s product track-records have surpassed 4 and 5 years, IndexIQ has experienced a significant increase in asset flows across our lineup, particularly from the institutional community."
The liquid alternative category has grown substantially in recent years with firms such as SEI and McKinsey & Company predicting that billions of dollars in new assets will flow into these funds over the next decade.
With its broad-based family of liquid alternative ETFs, IndexIQ believes it is very well positioned to take advantage of this trend, according to Patti.
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By GlobalDataPatti added: "There is no question that investors have been confronted with a series of extraordinary challenges over the last few years, ranging from the financial crisis to quantitative easing and the potential impact of Fed tapering. We believe our funds help solve a real problem faced by many investors who want exposure to the markets but are concerned about volatility and downside risk."
QAI seeks to track, before fees and expenses, the performance of the IQ Hedge Multi-Strategy Index. The Index attempts to replicate the risk-adjusted return characteristics of hedge funds using various hedge fund investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging markets.
At launch in March 2009, QAI introduced an entirely new class of liquid alternative Exchange-Traded Funds, providing investors and their advisors with access to a hedge fund-like strategy in an ETF, with all the advantages that fund structure entails -low costs, high liquidity, and full transparency.
IndexIQ sponsors a family of liquid alternative ETFs, including QAI; IQ Hedge Macro Tracker ETF (NYSE Arca:MCRO), the first Global Macro/Emerging Markets hedge fund replication ETF; IQ Hedge Market Neutral Tracker (NYSE Arca:QMN), designed to provide Market Neutral hedge fund exposure; IQ Merger Arbitrage ETF (NYSE Arca:MNA), the first merger arbitrage ETF; and IQ Global Resources ETF (NYSE Arca:GRES), the first hedged global natural resources ETF.
The IQ Hedge Indexes are used as the basis for investment products worldwide, and as benchmarks for advisors to determine how well actively managed hedge funds and alternative mutual funds are performing.
The indexes underlie a variety of investment products in addition to ETFs, including mutual funds, separately managed accounts, model portfolios, and institutional accounts.
In addition to the alternative products named above, other IndexIQ funds include:
- IQ Alpha Hedge Strategy Fund (IQHIX – Institutional Share Class; IQHOX – Investor Share Class), the first open-end, no-load hedge fund replication mutual fund;
- IQ Real Return ETF (NYSE Arca:CPI), the first US-listed "real return" ETF, which seeks to generate a real return above the rate of inflation as measured by changes in the Consumer Price Index;
- IQ US Real Estate Small Cap ETF (NYSE Arca:ROOF), the first US Real Estate Small Cap ETF;
- IQ Global Agribusiness Small Cap ETF (NYSE Arca:CROP), the first agribusiness small cap ETF;
- IQ Global Oil Small Cap ETF (NYSE Arca:IOIL), the first global oil small cap ETF;
- IQ Canada Small Cap ETF (NYSE Arca:CNDA), the first Canada small cap ETF; and,
- IQ Australia Small Cap ETF (NYSE Arca:KROO), the first Australia small cap ETF.
