The IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI ), the first hedge fund style ETF and the industry’s largest alternative exchange-traded fund, topped $500 million in assets, it was announced today by IndexIQ, the fund’s sponsor, a leading developer of index-based alternative investment solutions. This represents a growth rate in excess of 50 percent year to date.
“We are seeing tremendous interest in QAI from the financial advisor community, who increasingly are using the fund as their core hedge fund portfolio holding, while QAI also is being added to ETF model portfolios throughout the industry,” said Adam Patti, IndexIQ’s chief executive officer. “In many cases, QAI is used to provide the liquid alternatives allocation in these models, while in other cases, it is viewed as a bond substitute. Using QAI as a fixed income alternative has resonated strongly with investors since QAI is designed to seek strong performance in rising rate environments with a similar volatility profile to the aggregate bond market, while providing a competitive yield. Since IndexIQ exceeded $1 billion in assets under management, and as the firm’s product track-records have surpassed 4 and 5 years, IndexIQ has experienced a significant increase in asset flows across our lineup, particularly from the institutional community.”
The liquid alternative category has grown substantially in recent years with firms such as SEI and McKinsey & Company predicting that billions of dollars in new assets will flow into these funds over the next decade. With its broad-based family of liquid alternative ETFs, IndexIQ believes it is very well positioned to take advantage of this trend, according to Patti.
“There is no question that investors have been confronted with a series of extraordinary challenges over the last few years, ranging from the financial crisis to quantitative easing and the potential impact of Fed tapering,” said Patti. “We believe our funds help solve a real problem faced by many investors who want exposure to the markets but are concerned about volatility and downside risk.”
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