The IndexIQ IQ Alpha Hedge Strategy Fund (IQHIX – Institutional Class; IQHOX – Investor Class), the no-load, open-end mutual fund that launched the “liquid alternatives” revolution, marked its 5-year anniversary on June 30, 2013, it was announced today. At its introduction, the IndexIQ fund was the first open-end hedge fund replication mutual fund in the market. Total assets in U.S. alternative mutual funds and Exchange-Traded Funds (ETFs) are now approximately $550 billion, according to a recent report from SEI. 1 “Since we launched the IQ Alpha Hedge Strategy Fund, both retail and institutional investors and their advisors have come to embrace ‘liquid alternatives’ as an asset class, recognizing that these funds can bring diversification, liquidity, and other desirable characteristics to an investment portfolio,” said Adam Patti, chief executive officer at IndexIQ. “We are confident that this trend is still in its infancy.” The IQ Alpha Hedge Strategy Fund is designed as a core holding for investors, providing broad market exposure and also acting as a replacement for more costly traditional hedge funds. It uses a proprietary investment process to synthesize the risk and return profiles of a broad range of hedge fund investing strategies, seeking to deliver hedge fund-like performance in a low cost, transparent, and highly liquid investment vehicle. The rules-based investment process selects components from a wide array of ETFs that cover commodities, currencies, stocks, bonds and real estate. Since its launch, the fund has performed as follows:
|Since Fund||Since Index||Inception|
|1 Month||3 Month||YTD||1 Year||3 Year||5 Year||Inception*||Inception*||Date|
|Index - IQHGALPH||-2.81%||-2.11%||-0.70%||3.76%||4.75%||4.59%||4.63%||3.27%||10/31/2007|
IndexIQ’s leadership in liquid alternatives extends beyond open-end mutual funds to the ETF marketplace as well. The firm introduced the IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first liquid alternatives ETF in 2009. Its family of liquid alternative ETFs now also includes IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro/Emerging Markets hedge fund replication ETF; IQ Hedge Market Neutral Tracker (NYSE Arca: QMN), designed to provide Market Neutral hedge fund exposure; IQ Merger Arbitrage ETF (NYSE Arca: MNA), the first merger arbitrage ETF; IQ Real Return ETF (NYSE Arca: CPI), the first US-listed “real return” ETF, which seeks to generate a real return above the rate of inflation as measured by changes in the Consumer Price Index; and IQ Global Resources ETF (NYSE Arca: GRES), the first hedged global natural resources ETF.IndexIQ's Rules-Based Alpha solutions combine the benefits of traditional index investing — rules-based methodologies, low turnover, tax efficiency, low cost, systematic rebalancing and no manager selection risk — with the alpha potential sought by active managers. They increasingly are used as the basis for investment products worldwide, and as benchmarks for advisors to determine how well actively managed hedge funds and alternative mutual funds are performing. The firm’s indexes underlie a variety of investment products including ETFs, mutual funds, separately managed accounts, model portfolios, and institutional accounts. Other IndexIQ funds include:
- IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF), the first US Real Estate Small Cap ETF;
- IQ Global Agribusiness Small Cap ETF (NYSE Arca: CROP), the first agribusiness small cap ETF;
- IQ Global Oil Small Cap ETF (NYSE Arca: IOIL), the first global oil small cap ETF;
- IQ Canada Small Cap ETF (NYSE Arca: CNDA), the first Canada small cap ETF; and,
- IQ Australia Small Cap ETF (NYSE Arca: KROO), the first Australia small cap ETF.
2) Financial Advisor, “Ready or Not, Alternative Investments Are Going Mainstream,” December 6, 2012.Index performance does not reflect charges and expenses associated with the Funds or brokerage commissions associated with buying and selling ETF shares. One cannot invest directly in an index. The IQ Alpha Hedge Strategy Fund (IQ Fund), the IQ Hedge Multi-Strategy Tracker ETF (IQ Multi-Strategy ETF), and the IQ Macro Tracker ETF (IQ Macro ETF) are not hedge funds and do not invest in hedge funds. The IQ Alpha Hedge Strategy Fund is a registered open-end mutual fund that invests in exchange-traded funds (ETFs) and similar securities in an attempt to replicate the performance characteristics of certain hedge fund investing styles, but with less cost, more liquidity, and greater portfolio transparency than traditional hedge funds. There can be no assurance that the Funds’ investment strategies will be successful. The investment performance of the IQ Multi-Strategy ETF, the IQ Macro ETF and the IQ Real Return ETF (collectively, the IQ ETFs), because they are funds of funds, depends on the investment performance of the underlying ETFs in which they invest. There is no guarantee that the IQ ETFs themselves, or each of the underlying ETFs in the Funds’ portfolios, will perform exactly as its underlying index. The IQ ETFs are non-diversified and susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The IQ ETFs’ underlying ETFs invest in: foreign securities, which subject them to risk of loss not typically associated with domestic markets, such as currency fluctuations and political uncertainty; commodities markets, which subject them to greater volatility than investments in traditional securities, such as stocks and bonds; and fixed income securities, which subject them to credit risk; the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt; and interest rate risk; changes in the value of a fixed-income security resulting from changes in interest rates. Leverage, including borrowing, will cause some of the IQ ETF’s underlying ETFs to be more volatile than if the underlying ETFs had not been leveraged.
Investors are reminded that all investing involves risk, including possible loss of principal. Consider the Funds’ investment objectives, risks, charges and expenses carefully before investing. A prospectus with this and other information about the Funds may be obtained by visiting www.indexiq.com or by calling (888) 934-0777. Read the prospectus carefully before investing.IndexIQ ETFs and mutual funds are distributed by ALPS Distributors, Inc., which is not affiliated with IndexIQ. IDX001250.070114