IndexIQ Offers HF Replication Portfolios

Date: Tuesday, December 2, 2008
Author: FINalternatives

IndexIQ, a developer of index-based alternative investment products, has launched three new index-based separately-managed account offerings for high-net worth investors.

The firm’s IQ Alternative Beta Portfolio uses multiple hedge fund investing styles including long/short equity, global macro, market-neutral, event-driven, fixed-income arbitrage and emerging markets to replicate as closely as possible the returns of the hedge fund universe as measured by the CS/Tremont Blue Chip Index and the HFRX Global Hedge Fund Index.

Its IQ Inverse Alternative Beta Portfolio seeks to replicate the inverse risk-adjusted returns characteristics of that same collective hedge fund universe, and the IQ Commodity Rotation Portfolio seeks to achieve long-term capital appreciation by rotating exposure to various commodities. Exposures are determined using a rules-based price momentum methodology that rotates through seven commodity exchange-traded funds

Each of the IndexIQ portfolios is constructed using a proprietary rules-based methodology; each uses publicly-traded exchange-traded funds, with no hedge funds included as components.

“We are agnostic regarding the packaging of our strategies,” said Adam Patti, chief executive officer at IndexIQ. “While we plan to offer our innovative strategies as Mutual Funds, ETFs and Managed Accounts, the Managed Accounts allow for the greatest flexibility and customization for clients.”