Index IQ Launches Inflation Hedged ETFs
October 28, 2009

SAN DIEGO (ETFguide.com) – IndexIQ has just introduced two ETFs designed to hedge against rising inflation.

“To date, investors have been limited in the tools they have available in their efforts to protect their assets against inflation,” said Adam Patti, CEO at IndexIQ. “With many forecasters believing that we are about to enter an extended period of greater inflationary pressures, we believe the time is right for a new approach to protecting wealth by seeking real return at or above the rate of inflation.”

The IQ CPI Inflation Hedged ETF (NYSEArca: CPI) attempts to hedge against changes in the U.S. inflation rate by providing a return above the rate of inflation as measured by the Consumer Price Index (CPI).

CPI uses a fund-of-fund strategy. Top holdings within CPI include the iShares Barclays Short Treasury Fund (NYSEArca: SHV), the SPDR Barclays Capital 1-3 Month T-Bill (NYSEArca: BIL) and the iShares Barclays 20+ Treasury Bond Fund (NYSEArca: TLT). The fund’s total annual fee including the cost of the underlying funds it owns is 0.65%.

The IQ ARB Global Resources ETF (NYSEArca: GRES) aims to hedge against inflation by owning a basket of commodity related stocks. GRES will compete with other commodity ETFs that employ a similar strategy like the Thomson Reuters/Jeffries CRB Global Commodity Index Fund (NYSEArca: CRBQ) and the Market Vectors RVE Hard Assets Producers ETF (NYSEArca: HAP). HAP was launched one year ago and has around $94 million in assets.

The annual expenses for GRES are 0.75%.

“These two new funds offer a sophisticated approach to hedging the impact of a broad based rise in price levels as measured by the CPI,” said Patti.