IndexIQ saw assets under management jump 37 per cent in 2013 to USD1.125bn, driven in part by its IQ Hedge Multi-Strategy Tracker ETF (QAI).
QAI, the first hedge fund-style ETF and the industry’s largest alternative exchange-traded fund, more than doubled in size during the period, ending the year with nearly USD630m in assets.
In addition, IndexIQ continued to invest in its future growth during the year, expanding the sales force to include two new external wholesalers, covering the western and eastern territories, and bringing three new internal wholesalers on board.
“We are pleased to see our education-focused approach to the market recognised by financial advisors and investors during 2013, with our families of liquid alternative ETFs and real asset ETFs attracting new assets,” says Adam Patti, chief executive officer at IndexIQ.
“QAI in particular is viewed as a potentially strong alternative for investors looking to generate income but concerned about the potential impact of rising interest rates on bonds. Investors are seeking alternatives to their fixed income allocations, and QAI has proven itself an excellent choice, having outperformed the aggregate bond market in 2013 by 7.5 per cent with a similar volatility profile.”
IndexIQ’s IQ US Real Estate Small Cap ETF (ROOF) has been one of the leading ETFs in its category. ROOF’s indicated annual yield, which is the most recent quarterly yield multiplied by four, is approximately 9.40 percent, while the yield for the trailing four quarters was 7.25 per cent and the 30-day SEC yield as of 31 December 2013 is 5.26 per cent.
The firm’s IQ Merger Arbitrage ETF (MNA) has provided a low cost vehicle for gaining access to the growing activity in mergers and acquisitions.
“This investment area is heating up significantly given the trillions in cash on the balance sheets of companies around the world,” Patti says.