While ISE is perhaps best known as a US options exchange, the company has an established index business and has recently manoeuvred itself deeper into the fast-growing ETP industry.
Last month, the exchange operator announced that its beefed-up product development group would henceforth be known as ISE ETF Ventures, reflecting the group’s evolving focus and expanded capabilities in the ETF area.
The link-up with IndexIQ, a niche US-based provider of alternative ETFs, looks well suited as both companies have a demonstrated pedigree in creating innovative products. Examples include ISE’s cloud computing and diamond/gemstone indices, and IndexIQ’s suite of hedge fund replication ETFs.
ISE currently has a portfolio of over 30 proprietary indices with 19 ETP products, comprising ETFs and ETNs, based on them. ETP providers ISE currently works with include First Trust, PureFunds, UBS ETRACs, Direxion, AlphaClone and Horizons. Until now, IndexIQ’s products have mainly been linked to proprietary in-house indices.
Commenting on the partnership, Kris Monaco, Head of ISE’s ETF Ventures, said: “The partnership couples ISE’s ETP experience with IndexIQ’s reputation for creating innovative products. We look forward to working with IndexIQ to provide investors with more efficient access to new segments of the commodities market. Much like physically-backed commodity trusts like ‘GLD’ securitised gold, we hope to provide investors with similar benefits in different segments of the commodities market.”
Adam Patti, IndexIQ CEO, said: “Building on several years of successful product launches that have brought new exposures to retail and institutional investors, we believe this is an excellent time to continue our roll out of innovative exchange-traded products designed to provide investors with more efficient tools to diversify their portfolios.”
He added: “We are excited to partner with ISE in our continued effort to bring to market high-quality liquid alternative investments, which are resonating strongly as having significant value in today’s uncertain market environment.”