Tag Archives: market neutral etf

Market Neutral ETF Debuts

    Courtesy of Ronald Delegge, ETFGuide.com

IndexIQ introduced the the IQ HedgeMarket Neutral Tracker ETF (QMN) in October. QMN is designed to offer investors liquid, transparent market neutral hedge fund exposure.

QMN will seek to track, before fees and expenses, the performance characteristics of the IQ Hedge Market Neutral Index (IQHGMN), part of IndexIQ’s proprietary IQ Hedge family of benchmark hedge fund replication indexes. The IQ Market Neutral Index (IQHGMN) has live performance dating from September 2008.

“Market neutral is one of the largest hedge fund investment styles, both in terms of the number of funds and in the amount of assets being put to work,” said Adam Patti, IndexIQ CEO. “After incubating the index underlying QMN for four years, we felt it was an excellent time to roll out this strategy, particularly given the volatility and uncertainty inherent in today’s market environment.

QMN is linked to the IQ Hedge Market Neutral Index and holds other ETFs within its portfolio. The top three holdings are the Vanguard Short-Term Bond ETF (BSV), iShares Barclays 1-3 Yr Treasury Bond Fund (SHY) and the Vanguard Total Bond Market ETF (BND).

QMN’s market neutral approach means that it can invest in both long and short positions in various asset classes. These strategies seek to have a zero “beta” or market exposure to one or more systematic risk factors including the overall market (as represented by the S&P 500 Index), economic sectors or industries, market cap, region and country. Market neutral strategies that effectively neutralize the market exposure are not impacted by directional moves in the market.

According to IndexIQ’s prospectus, QMN will charge annual expenses of 0.99%, which include the expenses of the underlying funds held within the portfolio.

 

How To Hedge Market Top With ETFs.

Following is courtesy of ETF Database market analyst Stoyan Bojinov:

Are we near the top or did the bull train just leave the station? Fundamental news has been bolstering equity markets higher since the start of 2012, although many investors are fearful that if they jump in now, the next market correction may very well wipe out all of their gains and then some. Luckily, thanks to the evolution of the ETF industry, investors who wish to dip their toes in the water without going “all in” so to speak have a number of valuable instruments at their disposal.

Newcomer QuantShares offers mainstream investors a creative approach to hedging for a potential correction while also easing the burden of market timing. The Boston-based issuer offers a suite of market neutral ETFs that are worth a closer look for anyone who wishes to lower their portfolio’s overall volatility through the purchase of a single ticker.

Each of the products is market and sector neutral; QuantShares ETFs hold equal weighted, dollar neutral long/short positions, which means they can deliver positive returns in both bull and bear markets. Continue reading