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HedgeCo.net (West Palm Beach) – One of the first no-load, open-end mutual funds designed to replicate broad-based hedge fund performance characteristics, the ‘IQ ALPHA Hedge Strategy Fund’ (IQHIX) has marked its one-year anniversary on June 30th, 2009.
For the trailing 12-month period, the fund was down -2.58 percent, compared to a loss of -26.21 percent for the S&P 500.
“The performance over the past year can be attributed to a number of factors, including the ability of the fund to hold both long and short positions, and the liquidity of the ETFs used to represent asset class exposures,” said Adam Patti, IndexIQ’s Chief Executive Officer. “As a result, we were able to continuously execute our strategy during the period, something not all hedge funds could do.”
The fund works by optimizing the relative index weights among six hedge fund strategies, Equity Long/Short; Global Macro; Emerging Markets; Fixed Income Arbitrage; Equity Market Neutral; and Event Driven.
The funds do not invest in hedge funds, but use ETFs and a variety of other highly liquid financial instruments to provide exposure to the components of the index in approximately the same weighting. It employs leverage totaling 25 percent of the portfolio to magnify returns.
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New York Daily News – The hedge fund industry has a public relations problem these days and you have to be a millionaire to invest in one anyway, but there’s a new fund for more modest investors that can offer similar benefits.
The IQ Hedge Multi-Strategy Tracker Exchange-Traded Fund doesn’t actually invest in hedge funds, but attempts to replicate their performance.
The fund does this by holding other ETFs that own various asset classes, including stocks, bonds, currencies and commodities.
Adam Patti, CEO of IndexIQ, the company behind the new fund, said it even enjoys some advantages over hedge funds, including the ability to sell on a moment’s notice. Hedge funds typically offer limited times to sell.
Reuters – For years, U.S. hedge fund managers have worried that their loosely regulated and secretive industry would one day face tougher regulations.
"It was inevitable that this would happen," said Brad Alford, founder of Alpha Capital Management, an advisory firm that invests in hedge funds. "From the time Congress had the industry’s top hedge fund managers testify late last year, we knew something was coming."
