IndexIQ launches international quality ETF

Dec 14th, 2018 | By | Category: Equities

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IndexIQ, a New York Life Investments company, has launched the IQ 500 International ETF (IQIN US) on NYSE Arca.

IndexIQ unveils smart beta international equity ETF

IQIN provides exposure to 500 international equities with strong quality characteristics.

The smart beta fund provides exposure to equities listed in developed markets excluding the US that have superior quality characteristics.

IQIN is linked to the IQ 500 International Index which selects its constituents from a starting universe of stocks with at least $1 billion in assets under management and a one-year average daily trading volume of $5 million.

Firms will also only be eligible for inclusion if their stocks began trading at least two quarters prior to the index’s annual reconstitution.

Companies are then ranked according to sales and market share within their sector peer groups and on three-year operating margin relative to the total universe. A composite rank is calculated based on an equal-weighted average of the three scores.

The top 500 securities based on the composite rank are included in the index and are weighted according to their composite scores subject to a cap of 5%.

Stocks from Japan account for nearly a third (30.6%) of the total index weight, with the next largest country exposures being France (13.1%), Germany (12.2%), the UK (12.1%), and Canada (5.5%).

The largest sector exposures are consumer discretionary (20.1%), industrials (18.3%), consumer staples (11.7%), financials (9.6%), and materials (9.3%).

The fund comes with an expense ratio of 0.25% due to a contractual fee waiver in place until at least August 2020. This price tag positions the fund on the cheaper end of the fee scale for developed ex-US ETFs.

IndexIQ already offers a suite of international equity ETFs. Launched in July 2015, the “IQ 50 Percent Hedged” ETFs provide exposure to broad international, European, and Japan equity portfolios while hedging 50% of the currency fluctuations of the underlying index relative to the US dollar.

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