IndexIQ is launching a hedge fund ETF. It should start trading any day now under the ticker QAI. The fund will mimic the IQ Alpha Hedge Fund index.
The benchmark for QAI resembles a fund-of-funds portfolio since it includes six different types of hedge fund strategies. The idea is to capture the entire hedging universe rather than singling out one or two strategies. The ETF includes hedging strategies covering long-short; global macro; market neutral; event driven; fixed-income arbitrage and emerging markets.
QAI’s index will be rebalanced monthly. Entering the launch, its benchmark was weighted as follows: emerging markets (2.83%); long-short (-16.67%); global macro (13.83%); and 33.33% each in event driven, fixed-income arbitrage and market neutral.
IndexIQ has had a mutual fund trading under the same strategy for a few years now. The performance is pretty impressive compared to most markets. I’d wait to see how this thing trades before piling any money into it, but it’s certainly nice to see these kinds of products coming to the small investor. Best part about it? The expense ratio is 0.75%.