IndexIQ has launched a mutual fund-of-fund that will mimic hedging strategies, invest in exchange-traded funds and leverage up to 100% of its assets.
Called the IQ Alpha Hedge Strategy Fund, it will be team led, including of IndexIQ Chief Investment Officer Robert Whitelaw, who is also chairman of the finance department at the Stern School of Business at New York University. Joining Whitelaw is Salvatore Bruno, IndexIQ director of research.
The fund will track the IQ Alpha Hedge Index, which uses an algorithm to duplicate six hedge fund strategies: equity long/short, global macro, emerging markets, fixed income arbitrage, equity market neutral and event driven.
Interest in hedge funds has grown enormously over the past decade.
However, the vast majority of investors have not had access to this important asset class, said Adam Patti, chief executive officer at IndexIQ. The IQ Alpha Hedge Strategy Fund opens up hedge fund-style investing by providing access to hedge fund performance in an open-end mutual fund.
Whitelaw added: There is a significant body of academic research that supports the ability of hedge fund replication strategies to capture the characteristics of broad-based hedge fund returns, without the associated costs and risks of investing directly in the underlying strategies.
Mellon Capital Management will sub-advise the fund, which has a minimum investment of $2,500.