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Returns on IQ Hedge Index Family Mostly Modest in August

IndexIQ, the leading provider of innovative investment solutions, today announced the August performance of its family of IQ Hedge™ Indexes and the updated holdings in the firm’s IQ Merger Arbitrage ETF (NYSE Arca: MNA).

Gains across the indexes were mostly modest for the period, led by the IQ Hedge Merger Arbitrage Index, which was up 1.12 percent. The IQ Hedge Multi-Strategy Index was the only down index in the month, declining -0.06 percent.

“August was generally slow, as concerns over BREXIT continued to fade,” said Adam Patti, Chief Executive Officer at IndexIQ. “With the summer coming to an end, the market is likely to focus again on the potential for an increase in the Federal funds rate, and the impact that will have on credit spreads and the dollar. It may be that the time of relative quiet is drawing to an end.”

Salvatore Bruno, IndexIQ’s Chief Investment Officer, said, “We’re still seeing a disconnect between job growth, which has been good, and GDP growth, which has been tepid at best. This continues to create a dilemma for the Fed as it considers if and when to lift rates again.”

Designed as investable benchmarks that replicate the performance characteristics of sophisticated hedge fund strategies, the IQ Hedge Indexes comprise the first family of investable benchmark indexes covering hedge fund replication/alternative beta strategies. IQ Hedge index returns for the period ended August 31, 2016 were as follows:

IQ Hedge Indexes
1 Month3 MonthYTD1 Year3 Year5 Year
IQ Hedge Multi-Strategy IndexIQHGMS -0.06% 1.60% 3.83% 2.69% 4.02% 3.53%
IQ Hedge Market Neutral IndexIQHGMN 0.09% 1.54% 4.34% 3.49% 2.99% 2.72%
IQ Hedge Global Macro IndexIQHGMA 0.40% 2.28% 3.68% 4.02% 1.02% -0.19%
IQ Hedge Event Driven IndexIQHGED 0.29% 4.00% 6.57% 7.03% 6.78% 4.20%
IQ Hedge Long/Short IndexIQHGLS 0.54% 2.77% 5.47% 4.76% 5.05% 5.47%
IQ Merger Arbitrage IndexIQMNA 1.12% 0.25% 3.57% 3.49% 4.99% 4.89%

The latest updates to MNA ’s holdings, including recent additions and deletions, can be found here:

Additions to the IQ Merger Arbitrage Index since the last rebalance
TargetAcquirerTargetTargetAnnounceAdded
NameNameSectorCountryDateDate
AEP Industries, Inc. Berry Plastics Group, Inc. Materials United States 08/25/2016 09/06/2016
AVG Technologies NV AVAST Software Sro Information Technology Netherlands 07/07/2016 09/06/2016
Cardinal Financial Corp. United Bankshares, Inc. (West Virginia) Financials United States 08/18/2016 09/06/2016
CST Brands, Inc. Alimentation Couche-Tard, Inc. Consumer Discretionary United States 08/22/2016 09/06/2016
EverBank Financial Corp. Teachers Insurance & Annuity Association of America Financials United States 08/08/2016 09/06/2016
Fleetmatics Group Plc Verizon Communications, Inc. Information Technology Ireland 08/01/2016 09/06/2016
G&K Services, Inc. Cintas Corp. Industrials United States 08/16/2016 09/06/2016
Mattress Firm Holding Corp. Steinhoff International Holdings NV Consumer Discretionary United States 08/07/2016 09/06/2016
Post Properties, Inc. Mid-America Apartment Communities, Inc. Financials United States 08/15/2016 09/06/2016
Rackspace Hosting, Inc. Apollo Global Management LLC Information Technology United States 08/26/2016 09/06/2016
Yadkin Financial Corp. F.N.B. Corp. (Pennsylvania) Financials United States 07/21/2016 09/06/2016

Deletions from the IQ Merger Arbitrage Index since last rebalance

TargetAcquirerAnnounceAddedDeal
NameNameSectorCountryDateDateResult
QLogic Corp. Cavium, Inc. Information Technology United States 06/15/2016 07/06/2016 Completed
Marketo, Inc. Vista Equity Partners Management LLC Information Technology United States 05/31/2016 06/03/2016 Completed
Xura, Inc. SIRIS Capital Group LLC Information Technology United States 05/23/2016 06/03/2016 Completed
Qlik Technologies, Inc. Thoma Bravo LLC Information Technology United States 06/02/2016 07/06/2016 Completed
Cash America International, Inc. First Cash Financial Services, Inc. Financials United States 04/28/2016 05/04/2016 Completed
DreamWorks Animation SKG, Inc. Comcast Corp. Consumer Discretionary United States 04/28/2016 05/04/2016 Completed
HeartWare International, Inc. Medtronic Plc Health Care United States 06/27/2016 07/06/2016 Completed
Relypsa, Inc. Galenica AG Health Care United States 07/21/2016 08/03/2016 Completed
ARM Holdings Plc SoftBank Group Corp. Information Technology United Kingdom 07/18/2016 08/03/2016 Completed
Diamond Resorts International, Inc. Apollo Global Management LLC Consumer Discretionary United States 06/29/2016 07/06/2016 Completed
ITC Holdings Corp. Fortis, Inc. (Canada) Utilities United States 02/09/2016 03/03/2016 Max Age
Parkway Properties, Inc. Cousins Properties, Inc. Financials United States 04/29/2016 05/04/2016 Completed

About IndexIQ

IndexIQ is a pioneer and leading provider of innovative investment solutions focused on absolute return, real assets, international and fixed income strategies. IndexIQ’s solutions are offered as ETFs, mutual funds, separately managed accounts, and ETF model portfolios. The company's philosophy is to democratize investment management by providing all investors with cost-effective access to the types of high-quality, sophisticated investment products that typically have been reserved for institutional and ultra high-net-worth investors. IndexIQ’s mission is to take indexing to the next level by combining the best attributes of both passive and active investing, and make strategies available to investors in low cost, liquid, and transparent products*. IndexIQ is an indirect, wholly-owned subsidiary of New York Life Insurance Company.

Additional information about IndexIQ and its products can be found at IQetfs.com.

For more ETF market insights, click here.

* The nature of IndexIQ's products allows for these potential benefits, which typically are not associated with traditional hedge funds.

ETF PERFORMANCE: The performance data quoted above represents past performance. Past performance is not a guarantee of future results. Investment return and value of the Fund 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 IQetfs.com.

IQ Merger Arbitrage ETF (MNA) Risk Discussion: Certain of the proposed takeover transactions in which the Fund invests may be renegotiated, terminated or involve a longer time frame than originally contemplated, which may negatively impact the Fund’s returns. The Fund’s investment strategy may result in high portfolio turnover, which, in turn, may result in increased transaction costs to the Fund and lower total returns. The Fund is susceptible to foreign securities risk – since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets, including currency transaction risk. Diversification does not eliminate the risk of experiencing investment losses. Stock prices of mid and small capitalization companies generally are more volatile than those of larger companies and also more vulnerable than those of larger capitalization companies to adverse economic developments. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund. The ETF should be considered a speculative investment with a high degree of risk, does not represent a complete investment program and is not suitable for all investors.

About Risk: Certain of the proposed takeover transactions in which the Fund invests may be renegotiated, terminated or involve a longer time frame than originally contemplated, which may negatively impact the Fund’s returns. The Fund’s investment strategy may result in high portfolio turnover, which, in turn, may result in increased transaction costs to the Fund and lower total returns. The Fund is susceptible to foreign securities risk – since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets, including currency transaction risk. Diversification does not eliminate the risk of experiencing investment losses. Stock prices of mid and small capitalization companies generally are more volatile than those of larger companies and also more vulnerable than those of larger capitalization companies to adverse economic developments. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund. The ETF should be considered a speculative investment with a high degree of risk, does not represent a complete investment program and is not suitable for all investors. Alternative investment/strategies are speculative, not suitable for all clients, an intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise. Investors cannot invest in an index.

Consider the Funds’ investment objectives, risks, and charges and expenses carefully before investing. The prospectus and the statement of additional information include this and other relevant information about the Funds and are available by visiting IQetfs.com or calling 888-934-0777. Read the prospectus carefully before investing.

IndexIQ® is the indirect wholly owned subsidiary of New York Life Investment Management Holdings LLC. ALPS Distributors, Inc. (ALPS) is the principal underwriter of the ETFs. NYLIFE Distributors LLC is a distributor of the ETFs and the principal underwriter of the IQ Hedge Multi-Strategy Plus Fund. NYLIFE Distributors LLC is located at 30 Hudson Street, Jersey City, NJ 07302. ALPS Distributors, Inc. is not affiliated with NYLIFE Distributors LLC. NYLIFE Distributors LLC is a Member FINRA/SIPC.

*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.

Liquid alternatives are alternative investment strategies that are available through vehicles that provide daily liquidity, such as mutual funds and ETFs.

Contacts:

MacMillan Communications
Chris Sullivan/Mike MacMillan, 212-473-4442
chris@macmillancom.com
or
New York Life Insurance
Allison Scott, 212-576-4517
allison_scott@newyorklife.com

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