A new suite of exchange traded funds (ETFs) is hitting the market soon, this time with an entirely new strategy.

Filings for five new ETFs have been submitted to the Securities and Exchange Commission (SEC) by Index IQ and each  will track indexes created by IndexIQ subsidiary Financial Development HoldCo LLC. According to Money Management Executive, the ETFs are:

  • IQ Hedge Multi Strategy Tracker ETF
  • IQ Hedge Macro Tracker ETF
  • IQ Hedge Long/Short Tracker ETF
  • IQ Hedge Event Driven Tracker ETF
  • IQ Hedge Market Neutral Tracker ETF

Paul Mazzilli, senior advisor and board member, is bringing his expertise to ETFs through these funds. As hedge funds and mutual funds continue to leak assets, these and other ETFs could benefit as they tackle new and interesting strategies. These ETFs will be employing strategies that have been common in hedge funds.

Tony Davidow, executive vice president and head of distribution at IndexIQ, has said that he feels ETFs will grow at the expense of mutual funds. “There’s trillions in mutual funds. Those assets went down, and ETFs will ultimately be the beneficiary of those flows.”

Negative news about hedge funds recently may have soured investors on the strategy, but Mazzilli and Davidow aren’t worried about that. In fact, they see it as one glaring hole within the industry in general.

“The issues have been more structurally. The lack of liquidity, they’re difficult for investors to get out of. [Bernie] Madoff is a perfect example of a lack of transparency and what it means to investors. We’re capturing the positive attributes,” Davidow says.

Index IQ will bring innovative products to market with the liquidity, tranparency and cost-efficiency investors are seeking.

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.