RYE BROOK, N.Y.--(BUSINESS WIRE)--
IndexIQ, a leading developer of index-based liquid alternative investment solutions, saw assets under management (AUM) jump 37 percent in 2013 to $1.125 billion, driven in part by its IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first hedge fund-style ETF and the industry’s largest alternative exchange-traded fund, which more than doubled in size during the period, ending the year with nearly $630 million in assets. In addition, IndexIQ continued to invest in its future growth during the year, expanding the sales force to include two new external wholesalers, covering the western and eastern territories, and bringing three new internal wholesalers on board.
“We are pleased to see our education-focused approach to the market recognized by financial advisors and investors during 2013, with our families of liquid alternative ETFs and real asset ETFs attracting new assets,” said Adam Patti, chief executive officer at IndexIQ.
“QAI in particular is viewed as a potentially strong alternative for investors looking to generate income but concerned about the potential impact of rising interest rates on bonds. Investors are seeking alternatives to their fixed income allocations, and QAI has proven itself an excellent choice, having outperformed the aggregate bond market in 2013 by 7.5%* with a similar volatility profile.” As of December 31, 2013, QAI performed as follows:
|Quarter||1 Year||3 Year||
|QAI Share Price||2.69%||5.49%||3.14%||4.46%|
|Barclays Capital US Aggregate Index||-0.14%||-2.02%||3.26%||4.73%|
*QAI inception date is March 25, 2009. Performance greater than 1 year is annualized. The performance data quoted above represents past performance, which is not a guarantee of future results. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Fund returns reflect dividends and capital gains distributions. Fund performance current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. QAI’s expense ratio is 0.75%. ROOF’s expense ratio is 0.69%.
IndexIQ’s IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF) has been one of the leading ETFs in its category. ROOF’s indicated annual yield, which is the most recent quarterly yield multiplied by four, is approximately 9.40 percent, while the yield for the trailing four quarters was 7.25 percent, and the 30-day SEC yield as of December 31, 2013 is 5.26 percent.
The firm’s IQ Merger Arbitrage ETF (NYSE Arca: MNA) has provided a low cost vehicle for gaining access to the growing activity in mergers and acquisitions. “This investment area is heating up significantly given the trillions in cash on the balance sheets of companies around the world,” Patti said.
IndexIQ and its ETFs continued to win recognition for their unique product line in 2013. The firm was recognized as “Most Innovative North American ETF Provider” by etfexpress, while IndexIQ’s products also garnered industry recognition. The IQ Hedge Market Neutral Tracker ETF (NYSE Arca: QMN) was named “Most Innovative ETF” at the 9th annual Global ETF Awards, while QMN’s assets grew nearly 170% during the year.
Family of ETFs offer unique market exposure
The IndexIQ family of ETFs continued to perform strongly relative to their benchmarks and peers. "With our small cap ETFs, the goal is to add value and diversification to investor portfolios,” Patti said. “Most ETF investors focus on buying the same large cap sector ETFs that most other advisors buy. Given the billions flowing into these large cap ETFs, and the often severe concentration within the top 10 holdings of those products, much of the diversification benefits are washed away. Small cap companies often grow faster than their larger competitors, and may offer an effective pure-play on an industry or a single country economy. Moreover, small caps often are under-represented in investors’ portfolios relative to the large cap ETFs, and are subject to being acquired, all characteristics that can make this segment of the market particularly attractive.”
ETF model portfolios growing
IndexIQ’s model portfolios, which provide diversified exposure to a wide range of asset classes by investing in ETFs, continued to generate interest in the market, with multiple new advisory firms adding the portfolios to their investment platforms.
“ETF model portfolios have continued to gain traction in the marketplace, a trend we believe will accelerate in 2014,” said Patti. “With that in mind, we have focused on building out our distribution platform to make our family of model portfolios available to a broader range of financial advisors and their clients.”
The IndexIQ family of ETFs and mutual fund are designed to be liquid, transparent, and low cost.* Many were the first of their kind to be introduced to the market. In addition to the funds mentioned above, they include:
- 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 Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro/Emerging Markets hedge fund replication 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;
- IQ Global Resources ETF (NYSE Arca: GRES), the first hedged global natural resources 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;
- IQ Australia Small Cap ETF (NYSE Arca: KROO), the first Australia small cap ETF.
IndexIQ is a leading issuer of index-based liquid alternative solutions focused on absolute return, real asset and international strategies. IndexIQ solutions are offered as ETFs, Mutual Funds, Separate Accounts and Model Portfolios. IndexIQ’s philosophy is to democratize investment management by making innovative alternative investment strategies available to investors in low cost, liquid and transparent products.** IndexIQ strategies are marketed through the company’s proprietary investment products and select partnerships with leading global financial institutions. Additional information about the company and its products can be found at www.IndexIQ.com.
*During the 1-year period ended December 31, 2013, QAI returned 5.49%, while the Barclays Capital US Aggregate Index returned -2.02%.
**IndexIQ’s ETF holdings are available daily on IndexIQ’s website. Brokerage commissions apply to ETFs. ETFs are liquid in that they are exchange-traded. There are differences between investing in bonds and investing in liquid alternative ETFs. A bond is a debt instrument in which an investor loans money to a corporate or government entity that borrows the funds for a specified period of time at a fixed interest rate. Investors typically receive interest on the bonds when they mature. Bond funds hold a portfolio of bonds and can differ widely in strategies, ranging from U.S. Treasuries to high yields, from long-term to short-term. By contract, liquid alternative ETFs typically hold many non-bond securities, but provide investors with many of the same attributes as bond investing, such as dividend yield, lower volatility, and tax efficiency in terms of reduced capital gains distributions.
QAI and QMN (the “Funds”) are non-diversified and susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The Funds’ 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 Funds’ underlying ETFs to be more volatile than if the underlying ETFs had not been leveraged.
As ROOF’s investments are concentrated in the real estate sector, it is exposed to concentration risk, interest rate risk, leverage risk, property risk and management risk. The Fund is concentrated in small capitalization companies, whose stock prices generally are more volatile than those of larger companies. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund. The Fund is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund's Shares and the possibility of significant losses.
MNA: Certain of the proposed takeover transactions in which the Fund invests may be renegotiated, terminated or involve a longer time frame than originally contemplated, which may negatively impact the Fund’s returns. The Fund’s investment strategy may result in high portfolio turnover, which, in turn, may result in increased transaction costs to the Fund and lower total returns. The Fund is susceptible to foreign securities risk – since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets, including currency transaction risk. Diversification does not eliminate the risk of experiencing investment losses. Stock prices of mid and small capitalization companies generally are more volatile than those of larger companies and also more vulnerable than those of larger capitalization companies to adverse economic developments. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund. The ETF should be considered a speculative investment with a high degree of risk, does not represent a complete investment program and is not suitable for all investors.
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.
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. The ROOF prospectus can be obtained here: http://www.indexiq.com/docs/roof/summary_prospectus_roof.pdf Read the prospectus carefully before investing.
IndexIQ ETFs and mutual funds are distributed by ALPS Distributors, Inc. (ALPS), which is not affiliated with IndexIQ, and which does not distribute model portfolios. Adam Patti is a registered representative of ALPS. IDX001397.010815
- NYSE Arca
Mike MacMillan/Chris Sullivan