IndexIQ’s leading hedge fund-style exchange-traded fund, the IQ Hedge Multi-Strategy Tracker ETF (QAI), has topped $500 million in assets, with assets up 50 percent year to date.
The NYSE Arca-listed IQ Hedge Multi-Strategy Tracker ETF (QAI) is industry’s largest alternative exchange-traded fund.
Listed on the NYSE Arca, the fund seeks to track the performance of the IQ Hedge Multi-Strategy Index, a proprietary index that attempts to replicate the risk-adjusted return characteristics of hedge funds using various hedge fund investment styles.
These styles include long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging markets.
At launch in March 2009, the fund introduced an entirely new class of liquid alternative ETF, offering investors access to a hedge fund-like strategy with all the advantages of an ETF – low costs, high liquidity and full transparency.
Commenting on the milestone, Adam Patti, IndexIQ’s chief executive officer, 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.”
He added: “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.”
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.
Patti believes IndexIQ is well positioned to take advantage of this trend.
“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.”
In addition to QAI, IndexIQ offers a range of other hedge-fund style ETFs. These include: IQ Hedge Macro Tracker ETF (MCRO), the first global macro/emerging markets hedge fund replication ETF; IQ Hedge Market Neutral Tracker (QMN), which is designed to provide market neutral hedge fund exposure; IQ Merger Arbitrage ETF (MNA), the first merger arbitrage ETF; and IQ Global Resources ETF (GRES), the first hedged global natural resources ETF.
Across its entire range, IndexIQ manages in excess of $1 billion in assets.
The firm is headquartered in New York.