By Burton Frierson Reuters New York: The U.S. economy may have pulled out of its tailspin, but it is still losing altitude. Global stock markets have turned euphoric over the idea that the worst may be over for the world's largest economy, with Wall Street rallying more than 20 percent from lows reached earlier in March. Fueling this newfound optimism, unexpectedly robust economic reports last week showed signs of recovery in the beleaguered U.S. manufacturing and housing sectors. However, economists warn that it is too soon to say the United States is recovering from what will probably become the longest and deepest decline since the Great Depression. "I think it's reasonable to say that we perhaps are pulling out of the tailspin, that we're moving out of the period of free fall," said Nigel Gault, director of U.S. economic research at IHS Global Insight in Lexington, Massachusetts. "That's not the same thing as recovery being just around the corner." The president of the Federal Reserve Bank of Atlanta, Dennis Lockhart, echoed this sentiment Thursday, saying one month of improved data did not constitute an economic recovery. "Most of the data that we follow appears to signal a continuing recession, at least a few more months," Mr. Lockhart said. Indeed, data confirmed the U.S. economy shrank in the fourth quarter at its fastest pace since 1982, with a chain reaction of job losses and plummeting demand for imported goods from around the globe. Leaders from the Group of 20 industrialized and emerging economies meet this week in London to try to come to grips with the global economic crisis. The most painful vestige of the U.S. recession, the sharp rise in unemployment, will not begin to improve until long after the rest of the economy stabilizes. The scale of job destruction should be evident when the U.S. government releases monthly employment data Friday. The nonfarm payrolls report, usually the biggest event on the U.S. economic calendar, is expected to show 654,000 jobs were lost in March, according to the median in a Reuters poll of economists. Economists have already increased their forecasts for job losses. The only silver lining is that the projected total would be little worse than the 651,000 jobs lost in February. The U.S. unemployment rate is expected to have jumped to 8.5 percent in March. This would be the highest level since 1983, when the economy was still shaking off the debilitating effects of stagflation, with its low economic growth and sharp price rises. Gault, at IHS Global Insight, expects 750,000 job losses for March — which would be the worst month since 1949. He said the unemployment rate would continue rising this year before peaking at more than 10 percent in the first half of next year, perhaps well after the economy starts to grow. "The next employment report is probably going to be the worst one yet," Gault said of the March payrolls report. "Unemployment is the very last thing that turns." Other U.S. economic indicators during the week are unlikely to depart much from the gloom of the jobs report. The United States will not be able to look abroad for much help, at least for now. A report to be released Monday on Japanese industrial output is expected to show a 10 percent decline. Meanwhile, Japan has slipped to the brink of deflation. Euro zone consumer and industrial sentiment readings Monday are expected to remain negative. Similarly, manufacturing and service sector gauges to be released Wednesday and Friday are likely to remain weak. The European Central Bank's meeting Thursday may only highlight the difficulties facing the euro zone economy. Economists expect an interest rate cut but also a discussion of less common methods of easing monetary conditions. Ultimately, though, analysts figure the global economy is still trailing the United States on its slog through the quagmire, so new measures may be of little immediate help. "The rest of the world is falling into the same hole we did, but later," said Brian Fabbri, managing director of economic research at BNP Paribas. Source: www.iht.com
The Dollar's Tipping PointA defining move by the Fed last week to buy billions in treasuries and Freddie and Fannie mortgage backed securities will change the world as we know it. In my November 25, 2008 article entitled 'Deflation Dragon Disaster', I asked:
Will the unprecedented inflow of cash that is being injected into the system be enough to still the Deflation Dragon? At what point will the unyielding upward trend in the dollar be stopped in its tracks by the avalanche of FIAT sisters and brothers joining daily?With the Fed buying 300 billion in treasuries, I believe that day of reckoning has come. Martin Weiss of Money and Markets adds up the tally of government funds committed so far as close to 13 trillion. He also reports a total of 57.3 trillion in credit default swaps. This inevitably will push the dollar down. I explained the perils of this stealth tax in my December 30, 2007 article:
I hear many smart financial people say ‘but Americans buy everything in dollars so it won’t really affect us much’. ‘It is great for increasing our exports’ they add. Yes, it does at first, but products aren’t sold on price alone but design, promotion, etc. To them I say “Foreign countries and Americans sell commodities at the international price on the Chicago Market. Cocoa beans, chocolate, oil, plastics and soy beans are all paid in US dollars at the international prices.”I continued on to say:
The thought that you will not even hear whispered is that an unhinging of the reserve currency could happen and that would cause financial panic, plummeting stock markets, oil priced in the us dollar would rise way over $100 a barrel and the gold price, which has been shouting inflation, would quickly jump over $1000 an ounce as investors seek protection in safe havens. The government’s reserves would be gone in a few days if it had to support a dollar dive. Conversely, if we keep our dollar strong, foreign capital from the developing world will buy the US dollar and help finance the huge liabilities of social security, Medicare and interest on the national debt.I also explained in my August 12, 2007 article:
If fear of US instability creates more selling of the dollar, interest rates will have to eventually rise considerably to lure the world back to buying the greenback.Foreign government saber rattling by Russia and China has finally brought attention to the viability of the US dollar as the world’s reserve currency. Is a planned New World Order complete with a New World Currency backed by gold and silver all a part of the puppet show unfolding before our eyes? What would the consequences be if the world Mainstream news media has finally tackled this concept with questions this week to Bernanke, Geithner and President Obama asking if they were for a new world currency. Obviously they all said no. We know this issue will be well represented at the G20 meeting in London on April 2, 2009. If currency devaluation does come due to:
- A massive spending and bailout.
- A fear based rush out of the dollar.
- A planned devaluation of all G20 currencies.
Source: Jennifer Bawden www.seekingalpha.com
This week's Mutual Funds and ETF stories More investors are switching to exchange-traded funds, and the mutual-fund business may never be the same. ETFs started out humbly enough, but as the stock-market declined over this decade their status has risen. Now ETFs are giving actively managed funds a literal run for their money. One look at a typical mutual-fund's dismal performance and you can understand why financial advisers in particular have embraced these index-tracking vehicles that trade like stocks. ETFs are low-cost, tax-efficient, easily bought and sold, and deliver average returns -- everything traditional mutual funds are not. When every penny counts -- especially if you're sending clients a monthly bill -- ETFs are attractive assets. But don't think mutual-fund companies are about to let the ETF bakers run away with the pie. Two of the biggest firms, Charles Schwab and Pimco, are trusted names with financial advisers, and now they're planning to give them what they want. Their entry into the ETF world is aimed at protecting this crucial base, and could spur other fund giants to join the fray in hopes of keeping disgruntled investors from jumping ship. One thing's for sure: If actively run funds don't lower expenses for money-losing shareholders, those expensive cash-cows they stable will increasingly be exchanged and traded away. Source: www.marketwatch.com -- Jonathan Burton, assistant personal finance editor
Can the Hedge Fund ETF Actually Deliver?By Matthew Hougan www.seekingalpha.com The new IndexIQ Hedge Fund ETF (QAI) is one of the most interesting - and controversial - ETFs to launch in a while. The fund, which aims to synthetically replicate the performance of hedge fund strategies, launched Wednesday on NYSE Arca. Judging by early trading volume, the new fund is going to be a hit: QAI looks like it will trade more than 100,000 shares today (Thursday), an impressive performance for just its second day on the market. The idea of providing access to hedge fund-like returns through an ETF is hugely attractive. The best investors in the world—endowments like Harvard and Yale—hold enormous investments in hedge funds for a reason: They deliver returns with low correlations to the broader market. If QAI can make those returns available to all investors in a low-cost wrapper, it'll be big news. As I said yesterday on CNBC, however, the proof will be in the pudding: Can QAI actually deliver on its promises? It's important to understand that this ETF doesn't actually invest in hedge funds; rather, it uses factor-based analysis to determine the performance characteristics of hedge funds in general, and then builds a portfolio (using other ETFs) that it thinks will replicate that performance. Over the past few days, a lot of people have told me that this idea sounds crazy. I disagree. Too many people have a near-mythical conception of hedge funds; they think they are run by high-paid geniuses who make either spectacular or spectacularly bad investments. The truth is more mundane: While some hedge funds are run by geniuses, most are run by normal guys who use pretty standard strategies to generate a certain kind of return. They do a reasonable job, and are paid absurdly well to do it. The idea of synthetically replicating that performance at lower costs is well-established both in academia and the real world. Both Goldman Sachs (GS), and IndexIQ itself, for example, have been running synthetic hedge fund mutual funds since last summer. Generally speaking, they've done pretty well: The Goldman Sachs fund is down about 15% since July 2008, while the IndexIQ fund is down about 12%; that compares to the S&P 500, which is down about 38%. That's a good relative performance. Most hedge funds are down over that span too, in line with the synthetic products. The question now is whether these funds will be able to perform well as the market recovers. Although both funds have well-documented methodologies, they are nonetheless largely black box strategies; the concept behind the funds make sense, but you have to have faith that the quant-engine driving them is going to work. One advantage of the new ETF is that you can watch the holdings on a daily basis and see for yourself if they make sense. As of Wednesday's close, here's what QAI was holding:
|iShares Barclays Aggregate Bond||AGG||23.89||ProShares UltraShort Russell 2000||TWM||1.93|
|iShares Barclays 1-3 Year Treasury Bond||SHY||18.32||ProShares UltraShort MSCI EAFE||EFU||1.62|
|iShares MSCI Emerging Markets Index||EEM||11.11||ProShares UltraShort Real Estate||SRS||0.46|
|Vanguard Total Bond Market ETF||BND||8.39||ProShares UltraShort Euro||EUO||0.4|
|PowerShares DB Currency Harvest||DBV||7.94|
|iShares iBoxx $ High Yield Corp Bond||HYG||7.29|
|iShares Barclays Short Treasury Bond||SHV||3.92|
|SPDR Barclays High Yield Bond ETF||JNK||3.25|
|Vanguard Short-Term Bond ETF||BSV||3.11|
|SPDR Barclays 1-3 Month T-Bill ETF||BIL||2.36|
|Vanguard Emerging Market ETF||VWO||2.22|
|iShares Barclays TIPS Bond||TIP||1.81|
|PowerShares DB Commodity Index||DBC||1.53|
|SPDR Barclays Capital Aggregate||LAG||0.45|
- 72.79% fixed income, including 32.73% in broad-based bond indexes; 27.71% in short-term Treasuries; 10.54% in junk bonds; and 1.81% in TIPS
- 13.33% in emerging market stocks, the only long equity position in the portfolio
- 9.47% in commodities and currencies
- 4.41% in various inverse funds
2009-2010 Inflation (Or Hyperinflation) In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.The term "inflation" once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation. In economics, hyperinflation is inflation that is "out of control", a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates. I think a lot of things will be much higher in price, including oil, next year or maybe later this year. But, don't confuse price with value. If there is any economic recovery globally and the dollar is falling, we could see any possible price you want to imagine but, it would be in dollars, and not other currencies. There are several analysts that are predicting a large drop in the dollar and that will even give the markets a boost. Using an extreme example, you could see DOW 50,000 by the end of the year if the dollar gets dumped but, while you would have seen over 40,000 more pts. you couldn't buy any more at 50,000 than now, if you sold it and probably a lot less. The price of the DOW doesn't reflect value, just price. Oil is the same. If there is a recovery globally, oil demand will rise and with all the supply being cut now, it will cause oil to go back up for all nations but, if the dollar is falling, even if they don't pay more, we will. We could pay $1,000 a barrel or $10,000 a barrel or $1 million a barrel as that is what happens when a currency collapses. For those who say that would crush our economy. Correct 100%. That too, is what happens when a currency collapses. The world basically moves on without you. If that happens to the U.S. then the world will move on but much slower than before. Because we are such large consumers there is good news and bad news in that. The countries that move on would find fewer buyers but, also less demand for copper, oil, steel, concrete, etc. and thus, they could still have profits even with fewer exports. They may not be large for years but, there are two sides to U.S. consumption. It drives up both the price of goods and the price of things to make goods with when we consume a lot. Peter Schiff goes as far as to say the world's exporters would actually be better off without us increasing demand for raw materials so much due to our consumption. However, just as it takes a depression for us to go from debtor nation to creditor nation, it will take a global recession at the minimum to go from a global economy dependent on us to one that isn't. Consumption is touted as this big "cure all," but, it isn't. Production and making things faster than debt rises, is the cure all. Spending less than you earn, saving so you can spend in down times, budgeting, and sensible investing vs. "gambling" on stock moves is the "cure." Less government, not more, less government spending, not more, fewer programs not more at the federal level is what we need. If we aren't already there then soon we will be more of a drag on the global economy than aid to it. Peter Schiff, if not right now, soon will be. Think of it this way. You make things. I buy from you but, to keep buying from you, you have to keep loaning me money from what I pay you. To make it worse, I pay you back with devalued money so that you are even losing buying power with every new loan to me. How long are you going to keep selling to me? You end up better off making something else and selling to somebody else or just making the stuff for "trade" and "sale" with people you buy your raw materials from. In the last couple of years, one oil nation, Venezuela has done just that. It "trades" some of its oil instead of selling it for things it needs from nations that don't want to "buy dollars" to buy oil with and that have materials that Venezuela needs. Iran stopped using dollars, too. It even got Japan to buy the oil it gets from Iran in Yen as well as sell in euros to other nations. In short, there are no certainties going forward except that we have to change the way we run this nation from top to bottom. Source: www.ezinearticles.com
A Bottom for Real Estate? – HOV, URE, XHB, KBH March 27, 2009 By: Billy Fisher Contributor, Stock Traders Daily Following what has seemed like an unending downturn for the sector, real estate received some rays of light this week. As of the market’s close on Thursday, major homebuilder names such as KB Home (NYSE: KBH) and DR Horton (NYSE: DHI) had already locked in gains of 25.9% and 30.6% this week alone. Hovnanian Enterprises (NYSE: HOV) had soared 64.4% since last Friday’s close and experienced double its average daily trading volume on Wednesday. So what initiated this week’s rally? On Wednesday the Commerce Department reported that sales of new homes in February rose for the first time in 7 months. This metric increased 4.7% to an annual rate of 337,000. Then Thursday brought an additional encouraging development for the sector when a Deutsche Bank analyst said that the stocks of homebuilder companies may be reaching a bottom. If this development proves to be the case, it would be a welcomed sequence of events for a sector that has been in a downward spiral since peaking in the summer months of 2005. The past two years have been especially trying for those stakeholders associated with the homebuilding industry. In 2007, the SPDR S&P Homebuilders ETF (NYSE: XHB) and the iShares Dow Jones U.S. Home Construction Fund (NYSE: ITB) racked up respective declines of 47.7% and 58.0%. Last year did not turn out to be all that much better. These two funds experienced declines of another 36.2% and 41.8%. Looking forward, it is inevitable that investors in this arena will be wondering whether or not this week’s rally is sustainable. Fortunately, the inventory of new homes hitting the market is much leaner than it has been during past years of this extended market downturn for homebuilders-- it is at its lowest point in nearly 7 years. Prices of newly constructed homes have been coming down for several quarters now and mortgage rates are at record lows. A tax credit that arose out of the government’s stimulus plan for buyers who purchase a home prior to December 1st also should play a contributing role in stirring up new sales in the months ahead. Homebuilders aren’t the only stocks looking to shift into a recovery mode. Even REITs participated in the broader real estate rally on Thursday. The Ultra Real Estate ProShares Fund (NYSE: URE) experienced a 5.5% move up the charts yesterday before closing at $2.69. “We invested in URE at $2.14,” said Tom Kee Jr., president and CEO of Stock Traders Daily. “We intend on holding onto it with risk controls in place.” The volatility that REITs have been subjected to in recent months will likely continue to keep Kee on his toes. He will also be monitoring homebuilder stocks for trading opportunities via trading plans he has developed specifically for KBH, DHI and HOV. Source: stocktradersdaily.com
IndexIQ Launches Hedge Fund Strategy ETF
March 26, 2009
SAN DIEGO (ETFguide.com) - Investors looking for hedge fund like strategies within an ETF package now have a new choice.
IndexIQ, a Rye, NY-based index provider, has just introduced the IQ Hedge Multi-Strategy Tracker ETF (NYSEArca: QAI) which is benchmarked to the IQ Hedge Multi-Strategy Index.
Although QAI does not own or invest directly in hedge funds, it uses hedge fund like investment strategies that include long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, and emerging markets. The goal of the underlying index is to capture the risk-adjusted return characteristics of the collective hedge fund universe using multiple hedge fund investment styles.
"The IQ Hedge Multi-Strategy Tracker ETF brings together two of the most significant developments in the investment business over the last several years - the growing importance of alternative investments and the convenience, low cost, liquidity and transparency of ETFs," said Adam Patti, chief executive officer at IndexIQ.
QAI executes its hedge fund styled strategies using ETFs. The fund's top three ETF holdings are the iShares Barclays Aggregate Bond Index Fund (NYSEArca: AGG), the iShares Barclays 1-3 Year Treasury Bond Index Fund (NYSEArca: SHY), and the iShares MSCI Emerging Markets Index Fund (NYSEArca:EEM). The portfolio weights of the underlying index components are rebalanced monthly.
The IQ Hedge Multi-Strategy Tracker ETF is the first in a planned series of alternative investment ETFs that are to be based on proprietary indexes developed by IndexIQ. Unlike traditional market indexes, which track the performance of publicly-traded issuers representing a market or industry sector, the IndexIQ indexes provide exposure to alternative investment asset classes, including the IQ Hedge family of indexes, which track the returns of distinct hedge fund investing styles. The fund's annual expense ratio is 0.75%.
"A large body of academic research shows that one need not necessarily invest directly in a hedge fund to capture much of the potential benefits of the various hedge fund strategies," said Professor Robert F. Whitelaw, chief investment strategist of IndexIQ, and Chairman of the Finance Department at NYU's Stern School of Business.
New Gold Rush: Party Like It's 1849 With gold prices topping $900 an ounce and jobs still disappearing, a new gold rush is on. It's taking place in California again, where unemployed people are heading for the hills to prospect for gold. It's also happening on TV and online, where sometimes dubious ads promise rich rewards if you'll just hock your jewelry. And it's even creeping into a new kind of cocktail party that could only start in the Golden State. And just like last time, the new gold rush can come with a mix of disappointment and, well, rush. The adrenaline kind, as one miner says. "Some days you sit here and make two cents. Some days you make a couple of hundred dollars," said John Gurney, who like his crusty predecessors came from the East to find gold by digging around in California river beds. "I had one good day and made about $10,000," Gurney told the KNBC-TV in Los Angeles. What they're after The mineral gold is dense but highly flexible. It is virtually indestructible and extremely rare. All of the gold ever mined can fit into a cube with 72-foot sides, says Stuart Simmons, a researcher from University of Auckland, New Zealand who has studied how gold forms. Today, Fort Knox holds 8-foot-tall stacks of gold bars worth some $130 billion, enough to bail out at least one large American corporation. The original 49ers came California starting in 1848 when James W. Marshall found gold at Sutter's Mill in Coloma, now a ghost town. Soon 300,000 people flocked to the state. San Francisco became a boomtown and California gained statehood in 1850. Some early prospectors hit the mother lode, but most - especially those who came in the dwindling days of the phenomenon through about 1855 - spent as much or more on equipment as they ever extracted in precious metal. Gold mining today, for the most part, is a big-business affair as the pickings are no longer easy. To extract enough gold flecks from a typical mine to make a single wedding band requires digging up at least 20 tons of rock. Meanwhile, geologists figure 80 percent of California's gold remains to be found, KNBC-TV reported. Dig Deep The trick today is to dig deep. Where nuggets were once found in river beds, panners today report having to dig as much as 30 feet lower than the old timers did to strike it rich. The real winner, as in the old days: A company that makes the equipment you'd need. Keene Engineering of Chatsworth, Calif., makes everything from plastic pans for riverbed sifting to large commercial gold mining rigs. Business has doubled, the owners report. Others are simply digging into the jewelry drawer. Online pawnbroker Cash For Gold USA (you've seen the TV ads) says the company has grown "1,000 percent" in the past year, helped in part by the recession and plummeting TV ad prices, according to an article in the Christian Science Monitor. Who is selling their stash? "In the last two months we've seen an extraordinary amount of jewelry that typically is owned by the upper middle class," said Michael Gusky, CEO of GoldFellow, which also buys gold over the Internet. Pawning jewelry is no longer necessarily a low-class affair conducted in a dusty shop in the bad part of town. GoldFellow's Web ad reads: "Want a new plasma HDTV? Sell us your gold today." And the price of gold has inspired another phenomenon you might expect in California: gold parties. According to a report on the "CBS Evening News" this week, some Long Beach party-goers come not to get snockered but to get cash for their gold. Rings, necklaces and other jewelry is bought up by party organizers who recycle it so others can pay their bills. Source: Robert Roy Britt @ LiveScience.com
Betting against financials in 2008 was a winning play. Recently that has been anything but the case. Betting against health care or real estate in 2008 both also proved to be winning plays. In 2009 it looks as if these calls still continue to be on the money. Financials Snap Back Going into yesterday, the Direxion Financial Bear 3X Shares (NYSE: FAZ) was dead last among ETFs over the past four weeks as it had lost 56.7% over this time period. The notion that Citigroup (NYSE: C) was profitable during the first two months of 2009 as well as a positive outlook from Jamie Dimon at J.P. Morgan Chase & Co. (NYSE: JPM) has lead to financial bears being carried off the trading floor in a box. It looks as if FAZ's downward trend is going to persist. The ETF was down 45.1% on Monday as financial stocks rallied on the Treasury Department's toxic asset plan which could purchase $1 trillion in troubled assets from banks' balance sheets. On Life Support In 2008, investors in the SPDR Dow Jones Wilshire REIT ETF (NYSE: RWR) and the iShares Dow Jones U.S. Healthcare Provider Fund (NYSE: IHF) choked on losses of 38.9% and 43.7%. The outlook for these two ETF continues to remain bleak. RWR and IHF are down 13.0% and 18.7% over the past four weeks. RWR is suffering from a deteriorating commercial real estate environment and heavy debt burdens that are weighing down many REITs in the fund. This ETF's 11% dividend yield is unlikely to remain sustainable. IHF could also have more pain of its own coming its way. The Obama administration has laid out plans to fund a large portion of its health-reform agenda with new taxes and $175 billion in cuts to private Medicare plans which will impact several components of this fund. Getting Defensive nother sector that has caught the attention of the Obama administration, albeit in a negative fashion, is that of defense contractors. Earlier this month, Obama put the sector on notice to watch wasteful spending practices. The Government Accountability Office found that 95 major Defense Department weapons contracts ran a total of $295 billion over budget last year. The message has contributed to a 12.9% decline in the iShares Dow Jones U.S. Aerospace & Defense Fund (NYSE: ITA) over the past four weeks. Billy Fisher Analyst, Oxbury Research Source: http://www.marketoracle.co.uk
Government Comments Send Chinese Solar Stocks Soaring Chinese solar stocks soared on Thursday after the Chinese government stated support for solar initiatives According to a report in Digitimes, the Chinese government has shown a strong interest in the development and support of solar energy. No details were offered regarding a time schedule or plans for government subsidies. Still, the news has sent Chinese solar stocks higher. As a whole, tickerspy's Chinese Solar Stocks Index is up by 27.1%. Among the leaders are Suntech Power Holdings (NYSE: STP - News) and Yingli Green Energy (NYSE: YGE - News), with gains of 38% and 35% respectively. Even the laggards in the Index today, JA Solar (Nasdaq: JASO - News) and Canadian Solar (Nasdaq: CSIQ - News) are posting gains north of 17%. Solarfun Power Holdings (Nasdaq: SOLF - News) is up 20% despite analyst comments on liquidity concerns. Citing a difficult operating environment, Jeffries notes that the company faces cash issues relating to an acquisitions payment and ongoing CapEx demands. Meanwhile, a number of Chinese solar stocks, including China Sunergy (CSUN) and LDK Solar (NYSE: LDK - News), have faced the pressure of declining inventory value as a result of the global economic downturn. However, this news too has been shrugged off amid the rebound, as LDK is surging ahead with gains of over 33%. China Sunergy is also a top performer with a gain of 29%. As of this writing, the Chinese Solar Index is up about 57% over the last month, easily outpacing the performance of tickerspy's other Chinese stock Indexes. Investors can follow the Chinese Solar Stocks Index and view related performance charts and metrics at tickerspy.com Fun and informative, tickerspy.com is a free investing website where you can track multiple stock portfolios and compare against 250 proprietary Indexes tracking themes from nanotech to agriculture to precious metals. Best of all, tickerspy.com lets you spy on the portfolios of nearly 3,000 Wall Street institutions and hedge funds and see graphs of their performance. Try tickerspy.com today and find out how you stack up against investing legends like Warren Buffett! Source: www.tickerspy.com
The IQ® Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI) seeks to replicate, before fees and expenses, the returns of the IQ® Hedge Multi-Strategy Index. The Index is designed to capture the risk-adjusted return characteristics of the collective hedge fund universe using multiple hedge fund investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, and emerging markets.
The ETF-based approach to hedge fund replication offers a number of advantages to investors, including intra-day liquidity, portfolio transparency, lower fees than the typical hedge fund, the elimination of manager-specific risk, and real-time pricing. The IQ® Hedge Multi-Strategy Tracker ETF uses a wide variety of liquid ETFs currently in the market to build the underlying portfolio and does not invest in hedge funds.
"The IQ® Hedge Multi-Strategy Tracker ETF brings together two of the most significant developments in the investment business over the last several years – the growing importance of alternative investments and the convenience, low cost, liquidity and transparency of ETFs," said Adam Patti, chief executive officer at IndexIQ.
"Our hedge fund replication strategies have continued to represent a strong investment alternative in this period constituting one of the worst market environments in history. From the start, our goal has been to help democratize access to the alternative investment asset class by making these products broadly available to all investors with full liquidity, transparency and low cost. Today’s rollout is another giant step along that road, Patti added."
IndexIQ utilizes its unique Rules-Based Alpha™ philosophy to design and build innovative investment products, combining the benefits of traditional indexing with the riskadjusted return potential sought by the best active managers. The IQ® Hedge Multi-Strategy Tracker ETF is the first in a planned series of alternative investment ETFs that are to be based on proprietary indexes developed by IndexIQ. Unlike traditional market indexes, which track the performance of publicly-traded issuers representing a market or industry sector, the IndexIQ indexes provide exposure to alternative investment asset classes, including the IQ Hedge family of indexes, which track the returns of distinct hedge fund investing styles.
The constituents of the IQ® Hedge Multi-Strategy Tracker ETF are existing ETFs currently available in the marketplace, essentially making the ETF a "fund of funds." The ETF and underlying index are rules-based and the portfolio weights of the underlying components are rebalanced monthly. The fund’s expense ratio will be 0.75%.
"A large body of academic research shows that one need not necessarily invest directly in a hedge fund to capture much of the potential benefits of the various hedge fund strategies," said Professor Robert F. Whitelaw, chief investment strategist of IndexIQ, and Chairman of the Finance Department at NYU’s Stern School of Business.
"Hedge funds remain an excellent source of diversification, as evidenced by the fact that, while they were down for 2008, in aggregate they still managed to outperform the broad equity market benchmarks, such as the S&P. Gaining access to that diversification without having to meet traditional hedge fund thresholds, such as long lock-ups on investor capital and lack of portfolio transparency, or pay the exorbitant hedge fund fees, is an important advance for investors, whether large institutions or retail investors," continued Whitelaw.
Based in Rye Brook, New York, IndexIQ is the leading developer of index-based alternative investment solutions that combine the benefits of traditional index investing with the riskadjusted return potential sought by the best active managers. The company’s philosophy is to democratize investment management by making innovative alternative investment strategies available to all investors in low cost, liquid, transparent and tax-efficient products. IndexIQ strategies are marketed through the company’s proprietary investment products and select partnerships with leading global financial institutions.
Additional information about the company and its products can be found at www.IndexIQ.com.