IndexIQ has expanded its family of liquid alternative exchange-traded funds (ETFs) with the launch of the IQ Hedge Long/Short Tracker ETF (QLS) and the IQ Hedge Event-Driven Tracker ETF (QED).
The additon of the new funds, which join the IQ Hedge Macro Tracker ETF (MCRO), the IQ Hedge Market Neutral Tracker ETF (QMN) and the USD1 billion IQ Hedge Multi-Strategy Tracker ETF (QAI), means that IndexIQ now offers an ETF designed to track each of the four major hedge fund categories – Event-Driven, Equity Hedge or Long/Short, Market Neutral and Global Macro.
Through IndexIQ’s offerings, investors and advisors can construct their own diversified hedge fund-style portfolio based on the multiple hedge fund style strategies available from the firm.
“By managing the weightings of the strategies we offer, an investor or advisor can create a portfolio with a wide range of risk-return characteristics, from conservative to moderate to aggressive,” says Adam Patti, chief executive officer at IndexIQ.
The IQ Hedge Event-Driven Tracker ETF seeks to replicate, before fees and expenses, the risk-adjusted return characteristics of the IQ Hedge Event-Driven Index. The Index is intended to capture the collective returns of hedge funds using an event-driven investment style. Event-driven hedge fund managers typically invest in a combination of credit opportunities, such as high yield, leveraged loans, and capital structure arbitrage, and event-driven equities, such as risk arbitrage, holding company arbitrage, and special situations, which can include companies under pressure from activist investors.
The IQ Hedge Long/Short Tracker ETF attempts to replicate, before fees and expenses, the risk-adjusted return characteristics of the IQ Hedge Long/Short Index. The Index seeks to mirror the collective returns of hedge funds using a long/short equity investment style. Long/short equity hedge fund managers typically invest on both long and short sides of equity markets and diversify their risks by limiting the net exposure to particular sectors, regions or market capitalisations and focusing on company specific anomalies.
