ETF Spotlight: Multi-Strategy Hedge Fund Replicator
August 9th 2012 at 6:00am by Tom Lydon
ETF Spotlight on the IndexIQ Hedge Multi-Strategy Tracker ETF (NYSEArca: QAI), part of an ongoing series.
Assets: $208.5 million.
Objective: The IndexIQ Hedge Multi-Strategy Tracker ETF tries to reflect the performance of the IQ Hedge Multi-Strategy Index, which replicates the risk-adjusted return characteristics of hedge funds by using hedge fund strategies, such as long/short equity, global macro, market neutral, event-driven, fixed-income arbitrage and emerging markets.
Holdings: Top holdings include: iShares iBoxx Investment Grade Corporate Bond (NYSEArca: LQD) 22.0%, iShares Barclays 1-3 Year Treasury Bond (NYSEArca: SHY) 7.2%, iShares MSCI EAFE Index (NYSEArca: EFA) 6.7%, Vanguard Short-Term Bond ETF (NYSEArca: BSV) 6.6% and iShares Russell 2000 Index (NYSEArca: IWM) 5.6%.
What You Should Know:
- IndexIQ sponsors the fund.
- QAI has an expense ratio of 1.06%.
- Sector allocations include: basic materials 5.8%, consumer cyclical 10.1%, financial services 14.4%, real estate 12.5%, communications 3.7%, energy 7.5%, industrials 12.9%, technology 10.7%, consumer defensive 8.8%, healthcare 10.1% and utilities 3.5%.
- The ETF is up 1.1% over the last month, up 0.9% over the past three months and up 2.8% year-to-date.
- The fund is 1.2% above its 200-day exponential moving average.
- QAI tries to mirror the performance of the overall hedge fund universe and provide a low correlation to the equity markets.
The Latest News:
- According to Bloomberg data, hedge funds posted 0.2% gains in July, but long/short equity and multistrategy managers saw declines, reports Kelly Bit for Bloomberg.
- In comparison, the MSCI All-Country World Index returned 1.4% last month as.
- “People are in that cautious watch-and-don’t-do-anything mode,” Emma Sugarman, global head of capital introduction at BNP Paribas SA, said in the article. “We had some pretty intense intra-month volatility.”
- Hedge funds rose 1.9% in the first seven months of the year, whereas global equities gained 7.5%, with dividends.
- “During the month of July, what hurt long-short equity managers was low net exposure,” Don Steinbrugge, managing partner of Agecroft Partners LLC, a firm that advises hedge funds and investors, said.
IndexIQ Hedge Multi-Strategy Tracker ETF
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.