The IQ Hedge Multi-Strategy Tracker ETF (QAI), the first hedge fund-style exchange-traded fund and the industry's largest alternative ETF, has topped USD500m in assets.
This represents a growth rate in excess of 50 per cent year to date.
"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," says Adam Patti, IndexIQ's chief executive officer. "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. Since IndexIQ exceeded USD1bn in assets under management, and as the firm's product track-records have surpassed four and five years, IndexIQ has experienced a significant increase in asset flows across our line-up, particularly from the institutional community."
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. With its broad-based family of liquid alternative ETFs, IndexIQ believes it 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," says Patti. "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."
QAI seeks to track, before fees and expenses, the performance of the IQ Hedge Multi-Strategy Index. The index attempts to replicate the risk-adjusted return characteristics of hedge funds using various hedge fund investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging markets. At launch in March 2009, QAI introduced an entirely new class of liquid alternative exchange-traded funds, providing investors and their advisors with access to a hedge fund-like strategy in an ETF, with all the advantages that fund structure entails - low costs, high liquidity, and full transparency.