Seeking Alpha – The second hedge fund replication ETF from IndexIQ began trading on Tuesday (6/09/09). According to the press release, the IQ Hedge Macro Tracker ETF (MCRO) seeks to deliver risk-adjusted return characteristics similar to macro and emerging-market style hedge funds.

IndexIQ maintains indexes representing seven separate hedge fund strategies. Their first ETF, the IQ Hedge Multi-Strategy Tracker ETF (QAI), was launched on March 25 and is a composite of all seven underlying strategies.

The new MCRO ETF is designed to track two of the underlying strategies: the IQ Hedge Global Macro Beta Index and the IQ Hedge Emerging Markets Beta Index. The allocation to each strategy will change over time using a rules-based methodology.

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Tags: beta, emerging-market, emerging-markets, etf, global macro, hedge fund strategies, hedge funds, indexes, iq, march 25, mcro, methodology, press release, qai, replication, risk adjusted return, seeking alpha

West Palm Beach (HedgeCo.net) – At the MFA Legal, Compliance and Operations Seminar in New York last week, SEC staff described its examination and enforcement priorities for the foreseeable future with respect to hedge funds and investment advisers.

According to a letter obtained by HedgeCo, the SEC staff said that as part of their examination of hedge funds and investment advisers, the SEC intends to contact investors, verifying that the hedge fund/investment manager is providing the same statement information to both the client and SEC staff.

The concern here is that the manager might be providing one set of statements to the SEC for exam purposes and another set of statements to the clients that contain materially different account balances or performance information.

This aspect of the exam program may have significant investor relationship implications for fund managers. When questioned, the SEC staff members indicated that they may issue a press release stating that this aspect will be part of examinations going forward.

The SEC staff indicated that fund managers may run the risk of obstructing the examination by getting ahead of the process and communicating directly with investors ahead of SEC staff.

The SEC also warned investors about con-artists who may use the names of SEC employees to mislead, trick and conduct "emergency" examinations.

Alex Akesson

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Tags: account balances, accredited-investors, con artists, enforcement priorities, foreseeable future, fund-investment, fund-managers, hedgeco, investment advisers, investment manager, investor relationship, legal compliance, palm-beach, press release, sec employees, sec staff, staff members