The first Exchange-Traded Fund (ETF) designed to offer investors low cost, liquid and transparent access to the risk and return benefits of Global Macro hedge fund investment strategies marked its third anniversary on June 9, it was announced today by the fund’s sponsor, IndexIQ. Launched during a period of high market volatility, the IQ Hedge Macro Tracker ETF (MCRO) has exhibited strong returns since inception with low volatility as compared to the hedge fund industry benchmarks.
“The last three years have been a roller coaster ride for the markets,” said Adam Patti, chief executive officer at IndexIQ. “While we could not have fully anticipated this when we launched MCRO, the fund was designed as a low volatility vehicle that would provide downside mitigation while allowing an investor to maintain exposure to the global equity markets. We have been pleased to see that it has performed as intended over this period.”
MCRO seeks to replicate, before fees and expenses, the returns of the IQ Hedge Macro Index, which has nearly five years of live history. Global Macro hedge fund strategies generally span the globe in search of investment opportunities, employing a top-down approach to identifying market inefficiencies and dislocations, and typically invest in a range of instruments and asset classes including stocks, bonds, commodities, and currencies.
“As they seek to balance risk and return, investors and their financial advisors continue to express great enthusiasm for ETFs like MCRO that provide low cost, transparent access to the alternative investment asset class,” Patti said. “We look forward to continuing to pioneer in the area of alternative investments.”
MCRO has performed as follows:
|As of May 31, 2012||As of March 31, 2012|
|1 Month||3 Month||YTD||1 Year||35 Months|
|IQ Hedge Macro Tracker ETF (MCRO)||6/9/2009|
|IQ Hedge Macro Index (IQHGMAT)||-2.11%||-3.55%||1.88%||-3.19%||3.44%||3.63%||4.23%||0.26%||4.61%||5.04%||9/15/2008|
|HFRI Fund of Funds Index||-1.98%||-2.19%||1.05%||-5.68%||2.25%||N/A||N/A||-3.40%||N/A||N/A|
|MSCI World Index||-8.52||-8.32||1.07||-10.48||10.02%||9.19||1.57||1.14||13.76||4.57|
|*Performance greater than 1 year is annualized|
Standard deviation shows how much variation or dispersion exists from the average. Performance greater than 1 year is annualized. Performance data shown represents past performance and is not a guarantee of future results. Investment return and value of the Funds’ 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.
IndexIQ utilizes a proprietary rules-based methodology to construct the IQ Hedge Macro Index. While the index is built using data on hedge fund strategy returns, the IQ Hedge Macro Strategy Tracker ETF does not invest directly in hedge funds. Rather, it seeks to replicate the returns and common risk factors of hedge fund investing strategies, using existing Exchange-Traded Funds as the building blocks of the portfolio.
IndexIQ Indexes underlie a variety of investment products globally including ETFs, mutual funds, and institutional accounts. IndexIQ products are designed to be liquid, transparent, low cost,* and accessible to abroad range of investors, many of which are the first of their kind to be introduced to the market, including:
- 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 Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first US-listed hedge fund replication Exchange-Traded Fund;
- IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro ETF;
- 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;
- IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF), the first US Real Estate Small Cap ETF;
- 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;
- IQ South Korea Small Cap ETF (NYSE Arca: SKOR), the first South Korea small cap ETF;
- IQ Emerging Markets Mid Cap ETF (NYSE Arca: EMER), the first Emerging Markets mid 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.
*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.
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.