IndexIQ cuts fees for hedge fund ETF

Oct 24th, 2017 | By | Category: Alternatives / Multi-Asset

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IndexIQ has reduced the management fee charged for its IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QIA) from 0.75% to 0.53%.

IndexIQ cuts fees for hedge fund ETF

The fund offers exposure to hedge funds strategies including long/short equity, market neutral, event-driven, fixed income arbitrage and emerging markets.

Including acquired fund fees, the total expense ratio will now be 0.76%, effective on 1 November 2017.

The move comes just two months after the ETF’s fee was raised by 2 basis points due to changes in underlying fund fees.

QAI, which launched in 2009, was the first hedge fund replication ETF and has grown to become the largest ETF in the multi-alternative category, with total assets under management now standing at $1.1bn.

Salvatore Bruno, CIO of IndexIQ, commented: “Lowering the fees on this flagship ETF will allow more investors to benefit from exposure to hedge fund performance and the diversification it provides within a well-constructed portfolio. With a live track record stretching back more than eight years, QAI has performed exactly as planned while supporting the launch of other successful liquid alternative funds like our merger arbitrage ETF, MNA. We remain focused on delivering cost-effective innovative ETF approaches that help advisors and investors achieve their financial goals.”

The ETF tracks the IQ Hedge Multi-Strategy Index which replicates the performance of hedge funds using various hedge fund investment styles, including long/short equity, market neutral, event-driven, fixed income arbitrage and emerging markets. However, the fund does not invest in hedge funds and the index does not include hedge funds as constituents.

Current significant constituents include the Vanguard Short-Term Bond ETF (NYSE Arca: BSV) which makes up 24.6% of the index, followed by the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE Arca: LQD) and the iShares Short Treasury Bond ETF (Nasdaq: SHV), comprising 12.3% and 6.3% of the index, respectively.

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