Earlier this week we spoke about iShares Diversified Alternatives (NYSEArca: ALT) and the “alternatives” space in exchange traded funds in general. Another prominent fund in this category of alternatives/hedge fund like exposure is IQ Hedge Multi-Strategy Tracker (NYSEArca: QAI).
QAI is designed to deliver absolute returns from a risk adjusted standpoint, and has the ability to replicate various hedge fund investment strategies which encompass long/short equity, global macro, market neutral, fixed income arbitrage, and emerging markets. [ProShares Tries Hand at Hedge Fund ETFs]
The ETF, using a proprietary methodology, utilizes other ETFs within its structure to replicate these investment styles. [ETF Manager Profile: IndexIQ]
The fund charges 75 basis points (0.75%) for this breadth of exposure, which is certainly cheaper than many institutional hedge fund structures. Also, to institutional investors, it will likely make a big difference that ETFs such as QAI or ALT offer daily intraday liquidity and are not subject to lockup periods nor do they levy early withdrawal penalties, so those institutional plans (endowments, foundations, pensions, and the like) may find these ETFs as compelling alternatives to the hedge funds or hedge fund of fund structures that they are generally familiar with. [ETF Chart of the Day: iShares Diversified Alternatives Trust]
Since inception in April of 2009, QAI has returned 11.3%, and current top holdings are LQD, AGG, BND, CWB, and IWM. From a technical standpoint, QAI has been trading comfortably above its 200 day moving average since late March, and recently broke through its 50 day moving average earlier this month as well. [First Mid-Cap Emerging Markets ETF]
IQ Hedge Multi-Strategy Tracker
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