The IQ ALPHA Hedge Strategy Fund has been added to the Fidelity
Investments mutual fund platform, it was announced today.
The IQ ALPHA Hedge Strategy Fund is the first no-load, open-end mutual
fund to bring hedge fund-style investing to retail investors. It seeks
to deliver hedge fund-like performance with lower costs, higher
transparency and increased liquidity for shareholders. The
no-transaction fee Investor Class Fund is available through Fidelity
Investments with a minimum required investment for first-time
shareholders of $2,500. The Institutional Class Fund is available with a
minimum aggregated investment of $250,000.
“The extraordinary market volatility investors have experienced serves
to highlight the positive role alternative asset classes can play in
providing portfolio diversification,” said Adam Patti, chief executive
officer at IndexIQ. “Our goal is to make these strategies available to
Registered Investment Advisors and retail investors through products
that are transparent and cost-efficient. The addition of the IQ ALPHA
Hedge Strategy Fund to the Fidelity Investments platform is a
significant step forward in reaching this broader market.”
IndexIQ also recently launched the first-ever U.S. listed hedge fund
replication exchange-traded fund (ETF). The IQ Hedge Multi-Strategy
Tracker ETF (NYSE Arca: QAI) seeks broad hedge fund returns with low
volatility and low correlation to equity markets, providing a liquid,
transparent, low cost,* hedge fund alternative. The ETF, one of many
Alternative Investment ETFs IndexIQ plans to launch, 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 Funds are not suitable for some investors; see below for important
information about the Funds’ investment strategies, risks, and expenses.
About IndexIQ
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 risk-adjusted return potential
sought by the best active managers. The company’s philosophy is to
democratize investment management by making institutional class
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.
*Ordinary brokerage commission apply.
Investment Strategy and Operating History
The IQ ALPHA Hedge Strategy Fund (IQ Fund) and the IQ Hedge
Multi-Strategy Tracker ETF (IQ ETF) are not hedge funds and do not
invest in hedge funds. The IQ Fund is a registered open-end mutual
fund that invests in exchange-traded funds (ETFs) and similar securities
in an attempt to replicate the performance characteristics of certain
hedge fund investing styles, but with less cost, more liquidity, and
greater portfolio transparency than traditional hedge funds. The Funds
are new, with limited historical performance data. There can be no
assurance that the Funds’ investment strategies will be successful.
Risks of the IQ Fund
Investors are reminded that all mutual fund and ETF investing involves
risk, including possible loss of principal. The IQ Fund should be
considered a high-risk investment due to its use of leverage,
short-selling and derivatives, all of which may amplify the volatility
of the Fund's share price.Accordingly, the IQ Fund should not be
considered a complete investment program, nor suitable for all
investors. Investors should read the Funds’ prospectuses carefully
for a more complete description of the Funds’ risks.
Charges and Expenses of the IQ Fund
While it is a no-load fund, other fees and charges do apply to an
investment in the IQ Fund. An investor in the IQ Fund will bear the
operating expenses of the underlying ETFs and related securities in
which the Fund invests. The IQ Fund’s total annual operating expenses
are estimated to be 1.64% for Investor Class and 1.39% for Institutional
Class.1 The IQ Fund will also assess a 2.00% redemption fee
on shares redeemed within 7 days of purchase.
1These figures are after fee waivers and expense
reimbursements by the IQ Fund’s investment adviser and include the
operating expenses of underlying ETFs and similar securities. The
investment adviser has contractually agreed to waive fees or reimburse
expenses so that the IQ Fund's total annual operating expenses do not
exceed 1.15%, not including distribution fees, underlying ETF expenses,
and certain other expenses. The expense limitation ends on April 30,
2010, at which time the limitation may be renewed, terminated or
revised. Without the expense limitation, the IQ Fund’s total annual
operating expenses are estimated to be 1.95% for Investor Class and
1.70% for Institutional Class.
Risks of the IQ ETF
The IQ ETF's investment performance, because it is a fund of funds,
depends on the investment performance of the underlying ETFs in which it
invests. There is no guarantee that the IQ ETF itself, or each of the
ETFs in the Fund's portfolio, will perform exactly as its underlying
index. The IQ ETF is non-diversified and is susceptible to greater
losses if a single portfolio investment declines than would a
diversified mutual fund. The IQ ETF’s underlying ETFs invest in: foreign
securities, which subject them to risk of loss not typically associated
with domestic markets, such as currency fluctuations and political
uncertainty; commodities markets, which subject them to greater
volatility than investments in traditional securities, such as stocks
and bonds; and fixed income securities, which subject them to credit
risk – the possibility that the issuer of a security will be unable to
make interest payments and/or repay the principal on its debt – and
interest rate risk – changes in the value of a fixed-income security
resulting from changes in interest rates. Leverage, including borrowing,
will cause some of the IQ ETF’s underlying ETFs to be more volatile than
if the underlying ETFs had not been leveraged.
Consider the Funds’ investment objectives, risks, charges and
expenses carefully before investing. A prospectus with this and other
information about the Funds may be obtained by visiting www.indexiq.com
or by calling (888) 934-0777. Read the prospectus carefully before
investing.
The IQ Fund is distributed by PFPC Distributors, Inc. (PFPC). The IQ ETF
is distributed by ALPS Distributors, Inc., which is not affiliated with
PFPC or IndexIQ or the IQ ALPHA Hedge Strategy Fund's investment
advisor. Adam Patti is a registered representative of ALPS Distributors,
Inc.
IDX000144.412010
MacMillan Communications
Mike MacMillan/Chris Sullivan
212-473-4442
mike@macmillancom.com