First US-listed hedge fund replication ETF celebrates third anniversary
The IQ Hedge Multi-Strategy Tracker ETF (nyse arca:QAI), the first US-listed hedge fund replication exchange-traded fund, has attracted USD200 million in AUM since it’s launch three years ago.
“We launched the IQ Hedge Multi-Strategy Tracker ETF in March 2009 with the goal of making a whole new asset class available to the average investor,” says Adam Patti (pictured), CEO of IndexIQ. “Before the launch of QAI, hedge fund investing was generally limited to institutions and high net worth individuals. QAI changed all of that. While the concept was novel at the time, QAI has performed as we anticipated over the past three years and has attracted more than $200 million in assets.”
QAI is designed to give investors and their financial advisors access to institutional quality investment strategies in a low cost, fully transparent, and highly liquid vehicle. It seeks to replicate, before fees and expenses, the returns of the IQ® Hedge Multi-Strategy Index. The Index uses multiple hedge fund investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, and emerging markets.
“During this period of extraordinary turbulence, advisors, investors, institutions, and even other hedge funds have used QAI to maintain exposure to the markets at lower risk as measured by standard deviation,” says Patti. “It has proven to be a highly effective tool for diversifying a wide variety of portfolios.”
In addition to QAI, IndexIQ is also the sponsor of a number of liquid, index-based absolute return products designed to “democratise” the alternative investment landscape, including:
IQ Hedge Macro Tracker ETF (nyse arca:MCRO), the first Global Macro ETF;
IQ Merger Arbitrage ETF (nyse arca:MNA), the first Merger Arbitrage ETF;
IQ Real Return ETF (nyse arca:CPI), the first multi-asset class “Real Return” ETF, which seeks to generate a real return above the rate of inflation as measured by changes in the Consumer Price Index; and
IQ ALPHA Hedge Strategy Fund (IQHIX), the first no-load, open-end mutual fund designed to replicate broad-based hedge fund performance characteristics.
IndexIQ also offers its liquid alternative strategies via separate account and model ETF portfolios, making them the only firm to offer liquid alternative solutions via four separate product wrappers, including ETFs, Mutual Fund, Separate Accounts and Model Portfolios.
“We’re proud to have created one of the most comprehensive families of liquid alternative strategies available in the market today,” says Patti. “We have continued our quest to identify opportunities for innovation in the liquid alternatives space in the years since we first brought QAI to market.”
IndexIQ also noted that it has formed several partnerships with large firms in the financial services and advisory spaces based on IndexIQ’s liquid alternative offerings since launching QAI, including Envestnet, which recently added IndexIQ’s Global Alternatives ETF Model Portfolio (of which QAI is a core holding) to its Liquid Alternatives Program; Fortigent, which added the IQ Hedge Multi-Strategy SMA Portfolio as an Alternative Investment solution for its customisable UMA program; and NATIXIS, which licensed a hedge fund replication composite index from IndexIQ for use in creating products for the European and Asian markets.
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