IndexIQ Files For IndexIQ Long-Short ETF

IndexIQ has filed paperwork with the SEC for a “IndexIQ Long-Short ETF.” This will be an actively managed ETF that will seek long-term capital appreciation by investing primarily in U.S. and international equity securities. The Long-Short ETF will seek to meet its investment objective by normally investing at least 80% of its total assets in equity securities, which may include Depositary Receipts, of companies domiciled and primarily listed on a Stock Exchange or traded in global markets. The Board may change the investment objective of the Long-Short ETF without shareholder approval.

Utilizing qualitative and quantitative measures, the Adviser will select companies for the Long-Short ETF. Candidates for the portfolio will be ranked based on their relative desirability using a wide range of financial criteria and will be regularly reviewed to assure that they continue to meet the ranking and desirability criteria. Securities issued by companies that are deemed to have growth potential within their respective market niches and are therefore ranked higher than others within those niches will be candidates for long positions (“Long Positions”) within the Long-Short ETF. The Adviser also will select securities issued by companies that have less desirability than others as candidates for short positions (“Short Positions”) within the Long-Short ETF.

The Long-Short ETF’s investments may include common stocks, ETFs, ETPs, preferred stocks (either convertible or non-convertible), direct equity interests in trusts, partnerships, joint ventures and other unincorporated entities or enterprises, convertible debt instruments and special classes of shares available only to foreigners in markets that restrict ownership of certain shares or classes to their own nationals or residents. Holdings may include issues denominated in currencies of foreign countries, investment companies that invest in applicable markets, and in Depositary Receipts representing foreign securities.

To the extent that the Long-Short ETF, or any other Fund, acquires and holds Short Positions, the Fund itself will create such positions in transactions with other market participants. Such a Fund will sell short a specified percentage of some Portfolio Instruments (as defined in note 10 to this Application) and use the proceeds, together with other available cash, to make purchases to add to its Long Positions. The Fund will cover its Short Positions by borrowing securities in the stock loan market. To the extent required by Section 18(f) of the 1940 Act, Portfolio Instruments or cash (or both) in the Fund’s portfolio will be segregated to cover Short Positions in the portfolio.8

A Fund’s Short Positions will be disclosed on the Fund’s publicly available website as described in Section II.K herein, entitled “Availability of Information.” Because of this disclosure, any market participant will be able to determine in real time the intraday value of the Fund. The investment characteristics of Short Positions used by a Fund will be described in detail sufficient for market participants to understand the principal investment strategies of the Fund and to facilitate informed trading of its Shares.

They did not specify a trading symbol or expense ratio in the initial filing.

For the complete filing click: HERE


Leave a Reply

Your email address will not be published. Required fields are marked *