SAN DIEGO (ETFguide.com) - Investors looking
for hedge fund like strategies within an ETF package now have a new choice.
IndexIQ, a Rye,
NY-based index provider, has just introduced the IQ Hedge Multi-Strategy
Tracker ETF (NYSEArca: QAI) which is benchmarked to the IQ Hedge Multi-Strategy
Index.
Although
QAI does not own or invest directly in hedge funds, it uses hedge fund like
investment strategies that include long/short equity, global macro, market
neutral, event-driven, fixed income arbitrage, and emerging markets. The goal
of the underlying index is to capture the risk-adjusted return characteristics
of the collective hedge fund universe using multiple hedge fund investment
styles.
"The IQ Hedge Multi-Strategy Tracker ETF brings together two
of the most significant developments in the investment business over the last
several years - the growing importance of alternative investments and the
convenience, low cost, liquidity and transparency of ETFs," said Adam Patti,
chief executive officer at IndexIQ.
QAI executes its hedge fund styled strategies using ETFs. The
fund's top three ETF holdings are the iShares Barclays Aggregate Bond Index Fund
(NYSEArca: AGG), the iShares Barclays 1-3 Year Treasury Bond Index Fund
(NYSEArca: SHY), and the iShares MSCI Emerging Markets Index Fund (NYSEArca:EEM). The portfolio weights of the underlying index components are rebalanced
monthly.
The IQ Hedge Multi-Strategy Tracker ETF is the first in a
planned series of alternative investment ETFs that are to be based on
proprietary indexes developed by IndexIQ. Unlike traditional market indexes,
which track the performance of publicly-traded issuers representing a market or
industry sector, the IndexIQ indexes provide exposure to alternative investment
asset classes, including the IQ Hedge family of indexes, which track the
returns of distinct hedge fund investing styles.
The fund's annual expense ratio is 0.75%.
"A large body of academic research shows that one need not
necessarily invest directly in a hedge fund to capture much of the potential
benefits of the various hedge fund strategies," said Professor Robert F.
Whitelaw, chief investment strategist of IndexIQ, and Chairman of the Finance
Department at NYU's Stern School of Business.
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