IndexIQ’s lineup includes ETFs tracking hedge-fund-replication strategies, commodities and natural resources, real estate and international stocks. Many of the ETFs target small-cap stocks.
“Over long enough time periods, small-cap stocks outperform in any sector,” Patti said.
Some of the company’s latest ETFs reflect this outlook, such as the IQ US Real Estate Small Cap ETF (NYSEArca: ROOF). It invests in small-cap real estate investment trusts, or REITs.
“ROOF is trading at a 30% discount to large-cap REITs, based on price to earnings ratios. It also has a higher dividend yield at 5%,” says Patti. [Options traders Bet Against REITs as Small-Cap ETF Launches.]
Likewise, IQ Global Agribusiness Small-Cap ETF (NYSEArca: CROP) is comprised of global small-cap stocks that are involved in the agribusiness sector. It is also trading at a discount to its large-cap peers with a fatter dividend yield to boot, Patti said. [Small-Cap Agriculture ETF Leverages Food Prices, Population.]
IQ Hedge Multi-Strategy Tracker ETF
Tisha Guerrero contributed to this article.