QGTA: new Global Tactical Asset Allocation ETF by IndexIQ

IndexIQ begun trading the IQ Leaders GTAA Tracker ETF (NYSE Arca: QGTA) on Wednesday, September 30, 2015.
Here is a synopsis of the new ETF:



 Symbol: QGTA  Exchange: NYSE Arca
 Name: IQ Leaders GTAA Tracker ETF  Net Expense Ratio: 0.60%


The IQ Leaders GTAA Tracker ETF seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of its underlying index, the IQ Leaders GTAA Index.
The Fund is a “fund of funds” which means it invests, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the investments included in its Underlying Index, which includes underlying funds.


The IQ Leaders GTAA Index seeks to track the performance of the 10 leading global allocation mutual funds based on fund performance and fund asset size, re-set annually in accordance with IndexIQ’s rules-based methodology.

Global allocation mutual funds typically invest in a combination of equity, fixed-income and money market securities of U.S. and foreign issuers, and may also invest in other asset classes such as commodities. A global allocation mutual fund’s allocation to equity, fixed-income and money market securities and to different countries will vary over time based on the manager’s view of macroeconomic, country-specific, and issuer-specific factors.

The Underlying Index may include both long and short positions in ETPs. The Underlying Index generally is based on the premise that the returns of Selected Global Allocation Funds, when aggregated, display over time significant exposures to a set of common asset classes. By creating an index that has similar exposures to the same asset classes as Selected Global Allocation Funds generally, IndexIQ seeks to replicate the beta return characteristics of Selected Global Allocation Funds. The Underlying Index Components of this Strategy generally provide exposures to:

* U.S. large-capitalization equity;
* U.S. mid-capitalization equity;
* U.S. small-capitalization equity;
* Foreign equity (Europe, Australasia & Far East);
* Emerging market equity;
* U.S. corporate investment grade debt;
* U.S. corporate high yield debt;
* U.S. mortgage-backed debt; and
* U.S. government short- and intermediate-term maturity obligations

The IQ Leaders GTAA Index consists of a number of components selected in accordance with IndexIQ’s rules-based methodology of such Underlying Index. The Fund does not invest in mutual funds, and the Underlying Index does not include mutual funds as Underlying Index Components. The Underlying Index Components will include primarily ETFs, other ETPs and Financial Instruments (futures contracts, swap agreements). The Underlying Index seeks to track the “beta” portion of the returns (i.e., that portion of the returns that are non-idiosyncratic, or unrelated to manager skill) of selected mutual funds pursuing a global allocation strategy.


Index Top Consituents (08/31/15):


Security Name


BND Vanguard Total Bond Market Index Fund 32.13%
VEA Vanguard Developed Markets Index Fund ETF 21.77%
XLK Technology Select Sector SPDR Fund 17.76%
IWM iShares Russell 2000 ETF 13.93%
XLB Materials Select Sector SPDR Fund 9.11%
CWB SPDR Barclays Convertible Securities ETF 8.86%
LQD iShares iBoxx USD Investment Grade Corporate Bond ETF 6.97%
HYG iShares iBoxx USD High Yield Corporate Bond ETF 5.42%
XLP Consumer Staples Select Sector SPDR Fund 3.11%
VWO Vanguard FTSE Emerging Markets ETF 1.25%
XLE Energy Select Sector SPDR Fund 0.39%
IEF iShares 7-10 Year Treasury Bond ETF -0.65%
XLF Financial Select Sector SPDR Fund -1.22%
XLY Consumer Discretionary Select Sector SPDR Fund -4.07%
XLV Health Care Select Sector SPDR Fund -4.80%
XLI Industrial Select Sector SPDR Fund -4.90%
XLU Utilities Select Sector SPDR Fund -5.06%


Useful Links:
QGTA Home Page


Category: Multi Asset> Multi Asset Strategy> Hedge Fund Strategies



ETFtrack Comment:
QGTA is the first of its kind ETF which provides exposure to the performance and risk characteristics of the leading global allocation mutual funds.
“While the global allocation mutual fund category has been growing over the past few years, assets are highly concentrated  among a handful of funds,” said Adam Patti, CEO of IndexIQ. “Our research has found that global allocation mutual funds, when aggregated, display significant exposures to a set of common asset classes, which spurred the idea behind QGTA; namely that we build an index that has similar exposures to the same asset classes and then create an Exchange Traded Fund to provide exposure to those returns with the price and tax efficiency inherent in the ETF structure, while also eliminating idiosyncratic manager risk.”

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