IndexIQ Unveils Market Neutral ETF
October 5, 2012
IndexIQ introduced the the IQ Hedge Market Neutral Tracker ETF (QMN), on October 4, 2012, it was announced today. QMN is designed to offer investors liquid, transparent Market Neutral hedge fund exposure.
QMN follows the IQ Market Neutral Index (IQHGMN), which has live performance dating from September 2008. (VIDEO: 2008-2015 = 7 Years of Famine for Income Investors.)
“Market Neutral is one of the largest hedge fund investment styles, both in terms of the number of funds and in the amount of assets being put to work,” said Adam Patti, IndexIQ CEO. “After incubating the index underlying QMN for four years, we felt it was an excellent time to roll out this strategy, particularly given the volatility and uncertainty inherent in today’s market environment.
QMN is linked to the IQ Hedge Market Neutral Index and holds other ETFs within its portfolio. The top three holdings are the Vanguard Short-Term Bond ETF (NYSEARCA:BSV), iShares Barclays 1-3 Yr Treasury Bond Fund (NYSEARCA:SHY), and the Vanguard Total Bond Market ETF (NYSEARCA:BND).
QMN’s market neutral approach means that it can invest in both long and short positions in various asset classes. These strategies seek to have a zero “beta” or market exposure to one or more systematic risk factors including the overall market (as represented by the S&P 500 Index), economic sectors or industries, market cap, region and country. Market neutral strategies that effectively neutralize the market exposure are not impacted by directional moves in the market.
According to IndexIQ’s prospectus, QMN will charge annual expenses of 0.99%, which include the expenses of the underlying funds held within the portfolio.
The New York, NY-based company’s IQ Hedge Multi-Strategy Tracker ETF (QAI) is the largest “hedge-style” ETF by assets. Other funds managed by IndexIQ in the alternatives space include:
--IQ Hedge Multi-Strategy Tracker ETF (NYSEArca: QAI), designed to be a core holding in the
alternative category, and the first US-listed hedge fund replication Exchange-Traded Fund;
--IQ Hedge Macro Tracker ETF (NYSEArca: MCRO), designed as an equity alternative, and the
first Global Macro hedge fund replication ETF.
--IQ Merger Arbitrage ETF (NYSEArca: MNA), designed as an equity alternative, and the first merger arbitrage ETF.
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