IndexIQ, an issuer of index-based liquid alternative solutions focused on absolute return, real assets and international strategies, has expanded its longtime suite of innovative ETF model portfolios with the launch of the IQ Global Alternatives ETF Model Portfolio.
Since the successful launch of IndexIQ’s IQ Hedge Multi-Strategy Portfolio in March 2009, the firm’s ETF portfolios have been adopted across a broad segment of the financial advisor community, including registered investment advisors (RIAs), wirehouses, and other intermediary financial advisors. Some examples include Morgan Stanley Smith Barney, which offers the IQ Hedge Multi-Strategy Portfolio as a separately managed account portfolio, and Fortigent LLC, which selected the Multi-Strategy Portfolio as an Alternative Investment solution for the firm’s customizable UMA program. IndexIQ’s ETF models are being utilized by many financial advisors who understand the importance of portfolio diversification through alternative investments. IndexIQ provides these models on a subscription basis along with additional research. The firm builds its model ETF portfolios by leveraging IndexIQ’s extensive internal expertise as a pioneer in liquid alternative investments.
The IQ Global Alternatives ETF Portfolio builds upon the success of IndexIQ’s first-generation model ETF portfolios and is a comprehensive investment strategy designed to achieve portfolio diversification, growth of capital and low volatility through the use of liquid, transparent, low cost alternative investments. The Model includes exposures to multiple hedge fund investing styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, and emerging markets hedge. The strategy targets volatility of 6-8% through exposures to a broad range of asset classes, including domestic, international and emerging market equities, bonds, commodities, currencies and real estate, as well as exposure to volatility. Historically, the model provides a low correlation to equity markets, with a beta to equities of approximately zero.
The IQ Global Alternatives ETF Portfolio is constructed using a proprietary, rules-based methodology developed by IndexIQ and invests in liquid exchange-traded products. The benefits of this approach include transparency, liquidity, significantly lower costs compared to traditional alternative investment options, and the avoidance of manager and style-specific risk. The model is available to subscribers who receive monthly guidance on tactical asset allocation across 10 underlying exchange-traded products.
"The IQ Global Alternatives ETF Portfolio offers a comprehensive solution for investors seeking diversification across multiple asset classes and efficient pricing through the use of ETFs," says Adam Patti, IndexIQ’s CEO. "The Portfolio is the latest iteration in our suite Alternative ETF models and is our most comprehensive solution to date. We have been incubating this strategy for quite some time and, given market conditions, we believe the time is right to make it more broadly available. At a time of significant market volatility and uncertainty, the IQ Global Alternatives ETF Portfolio provides liquid and transparent access to a strategy designed to dampen volatility while maintaining upside potential. The Portfolio is one of several ETF model portfolios that we provide to advisors who understand the power and importance of alternative investments. Our IQ Global Alternatives ETF Portfolio is designed for advisors who would prefer a highly diverse solution, rather than having to wade through the numerous untested solutions being launched into the market."