IndexIQ, a leader in developing index-based liquid alternative investments, including absolute return, real asset and international strategies, is set to launch the IQ US Real Estate Small Cap ETF (Ticker: ROOF) on the NYSE Arca platform this morning, it was announced today.
ROOF, a unique new ETF designed to be income producing, is the first Exchange-Traded Fund (ETF) dedicated to providing access to the small-cap US real estate sector and will include exposure to a wide variety of small-cap Real Estate Investment Trusts (REITs), including Mortgage REITs, Retail REITs, and Office REITs which made up 20.73 percent, 17.97 percent, and 17.68 percent, respectively, of the fund’s underlying index as of May 31, 2011. Hotel, Diversified, Specialized (including medical, warehousing & self-storage) and Residential REITs will also be represented as well.
ROOF seeks to replicate, before fees and expenses, the performance of the IQ US Real Estate Small Cap Index (IQSMRES), a float-adjusted market cap-weighted index that is intended to track the overall performance of small capitalization US real estate companies. ROOF is intended to provide pure-play exposure to this sector either as a standalone vehicle or in combination with large-cap US real estate ETF offerings to create a broad-based portfolio. 1
“Performance among both small- and large-cap REITs took a big hit at the start of the financial crisis in 2007, but since 2009, REITs have seen a performance resurgence, with small-cap offerings far outpacing the performance of their large-cap counterparts,” 2 said Adam Patti, CEO of IndexIQ. “In today’s environment, investors are hungry for income producing assets. With ROOF, ETF investors now have the potential to capture a robust new income stream and significant capital appreciation by isolating small cap US real estate exposure; and they can do this in a transparent, liquid, tax efficient way.” * Patti added, “Investors can use ROOF as a complement to one of the large-cap REIT ETFs in the market given the lack of portfolio overlap, or as a standalone allocation in lieu of large-cap exposure given the diversification benefits of small-caps, the higher yield, and the potential for greater capital appreciation in the future, which is typical when comparing small caps to large caps in most sectors. Additionally, as REITs often look to acquisitions for growth, these small cap REITs are well positioned to become acquisition targets for the large REITs.”ROOF has an expense ratio of 0.69 percent. ROOF joins IndexIQ’s Real Assets family of funds that includes:
- IQ Global Resources ETF (NYSE Arca: GRES), the first Global Natural Resources ETF;
- IQ Global Agribusiness Small Cap ETF (NYSE Arca: CROP), the first global agribusiness small cap ETF; and
- IQ Global Oil Small Cap ETF (NYSE Arca: IOIL), the first global oil small cap ETF.
- IQ Japan Mid Cap ETF (NYSE Arca: RSUN), the first Japan mid cap ETF.
- IQ Hong Kong Small Cap ETF (NYSE Arca: HKK), the first Hong Kong small cap ETF; and
- IQ South Korea Small Cap ETF (NYSE Arca: SKOR), the first South Korea small cap ETF;
- IQ Taiwan Small Cap ETF (NYSE Arca: TWON), the first Taiwan small cap ETF ;
- IQ Australia Small Cap ETF (NYSE Arca: KROO), the first Australia small cap ETF;
- IQ Canada Small Cap ETF (NYSE Arca: CNDA), the first Canada small cap ETF;
- IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro ETF;
- IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first US-listed Hedge Fund Replication ETF;
- IQ Alpha Hedge Strategy Fund (IQHIX – Institutional Share Class; IQHOX – Investor Share Class), the first open-end, no-load Hedge Fund Replication mutual fund;
- IQ Merger Arbitrage ETF (NYSE Arca: MNA), the first Merger Arbitrage ETF; and
- IQ Real Return ETF (NYSE Arca: CPI), the first multi-asset class “Real Return” ETF, which seeks to generate a real return above the rate of inflation as measured by changes in the Consumer Price Index;