Hedge fund ETF provider IndexIQ surpasses $1 billion in assets

May 16th, 2013 | By | Category: Alternatives / Multi-Asset

IndexIQ, a US-based specialist provider of exchange-traded funds (ETFs), best known for its hedge fund-style products, has surpassed $1 billion in assets under management.

Hedge fund ETF provider IndexIQ surpasses $1 billion in assets

Adam Patti, founder and chief executive officer of IndexIQ.

Adam Patti, IndexIQ’s chief executive officer, said: “In a few short years, liquid alternatives have gone from a novelty to playing an important role in a diversified investment portfolio and we’ve seen strong interest in our offerings from the institutional and retail advisor channels.”

IndexIQ was founded in part to solve the fundamental question of how to cost-effectively provide all investors access to sophisticated investment strategies typically reserved for institutional and ultra high-net-worth investors.

Patti continued: “Our goal since we began our research efforts in 2006 and launched our first mutual fund in 2008 and first ETF in 2009 has been to bring institutional-quality next-generation alternative investment solutions to the broader investment marketplace. We focused on that goal during one of the most turbulent periods in market history. Throughout that time, our solutions performed as designed giving us not only the solid track record, but also the scale needed to continue to expand the adoption of these products in investor portfolios.”

The firm’s flagship product, and by far it’s most successful, in terms of assets under management, is the NYSE Arca-listed IQ Hedge Multi-Strategy Tracker ETF (QAI). Since its debut in March 2009, the fund has accumulated more than $402 million in assets. It is linked to the proprietary IQ Hedge Multi-Strategy Index, an index which attempts to replicate the risk-adjusted return characteristics of hedge funds using multiple hedge fund investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging markets, by investing in a portfolio of ETFs and futures.

Other products in IndexIQ’s hedge fund suite include the IQ Hedge Market Neutral Tracker ETF (QMN), the IQ Hedge Macro Tracker ETF (MCRO), and the IQ Merger Arbitrage ETF (MNA).

Unfortunately, IndexIQ’s ETFs are currently only available on the NYSE Arca, which can make them inefficient from a tax perspective for non-US investors. Fortunately, UK/European investors looking for locally listed hedge fund-style strategies in ETF format have a number of alternatives to consider. Options include the UBS-ETF HFRX Global Hedge Fund SF (UC19), which tracks the HFRX Global Hedge Fund Index, and the db X-trackers db Equity Strategies Hedge Fund Index UCITS ETF (XHEG), which is linked to the db Equity Strategies Hedge Fund Index.

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