The largest hedge fund ETF saw outsized buying activity late last week, taking the fund’s total assets to nearly $500 million. Low interest rates have made it tough for hedge funds in recent years but they may fare better as rates rise.
In fact, IQ Hedge Multi-Strategy Tracker ETF (NYSEArca: QAI) on Friday saw one of the highest-volume days in its history.
QAI saw a $25 million inflow during the session, according to ETF liquidity provider WallachBeth Capital.
The index-based ETF attempts to replicate the risk-adjusted return characteristics of hedge funds using various hedge fund investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging markets, according to manager IndexIQ.
QAI charges an expense ratio of 0.75% and holds assets of about $474 million. [IndexIQ Gains Momentum in Alternative ETFs]
The ETF doesn’t invest in hedge funds. Instead, it seeks performance similar to the overall hedge fund universe, and a low correlation to the stock market. Most of QAI’s holdings are other ETFs.
IndexIQ Chief Executive Adam Patti in an interview earlier this year said hedge fund returns should improve as interest rates move higher. He said QAI and the firm’s other hedge fund ETFs are “cheaper” versions of hedge funds, without the lockup periods. [IndexIQ Gains Momentum in Alternative ETFs]
IQ Hedge Multi-Strategy Tracker ETF
