ETF Chart of the Day: Hedge Funds

September 10th at 1:00pm by Paul Weisbruch, Street One Financial

An expanding area of the ETF space is that of Hedge Fund replication products. Each fund in the category generally has a unique way of delivering returns using strategies that are typically associated with “hedge fund managers,” such as merger arbitrage of multi-asset real returns, or even managed futures.

Currently, there are fourteen funds in this space, with IndexIQ’s QAI (IQ Hedge Multi-Strategy Tracker), MCRO (IQ Hedge Macro Tracker), CPI (IQ CPI Inflation Hedged), and MNA (IQ Merger Arbitrage) standing out as pioneers (they debuted back in early 2009).

They have accumulated roughly $400 million in assets since inception, and there seems to be institutional and advisor driven appetite for additional strategies in this space judging by the launch of new products.

QAI in fact saw a huge volume spike just last week, with more than 1.5 million shares trading in a single session (versus average daily volume of about 75,000 shares).

WDTI (WisdomTree Managed Futures Strategy) is the second largest fund in the Hedge Fund space in terms of assets, having raised $148 million since inception, falling behind QAI as the asset leader.

CSMA (Credit Suisse Merger Arbitrage Liquid Index) and MNA are both, as their names suggest, aimed at delivering a merger arbitrage strategy to investors.

Other funds in the space currently are ALT (iShares Diversified Alternatives Trust), CSLS (Credit Suisse Long/Short Liquid Index), HDG (ProShares Hedge Replication ETF), RLY (SPDR Multi-Asset Real Return), RRF (WisdomTree Global Real Return Fund), ALFA (AlphaClone Hedge Fund Long/Short Index), and QEH (AdvisorShares QAM Equity Hedge).

IQ Hedge Multi-Strategy Tracker

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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