Daily ETF Watch: ‘Leaders’ Funds Planned

Daily ETF Watch: ‘Leaders’ Funds Planned

IndexIQ files for ETFs seeking to mimic top-performing conventional mutual funds.

Reviewed by: Heather Bell
Edited by: Heather Bell

IndexIQ has filed for a pair of ETFs that will use a strategy similar to the approach of Global X’s “Guru” funds that seek to reflect the equity holdings of top hedge funds.


The IndexIQ “Leaders” ETFs will track indexes targeting the holdings of top-performing mutual funds in their respective asset class or strategy categories and will seek to mimic the mutual funds’ beta performance via long and short investments in other exchange-traded products.


According to the prospectus, the IQ Leaders Global Allocation Tracker ETF will target the top-performing quartile of global allocation mutual funds over the prior two-year period, while the IQ Leaders Global Bond Tracker ETF will seek to reproduce the beta returns of mutual funds that have been in the top performance quartile for the prior 18 month-period.


The prospectus notes that the global allocation fund will provide exposure to U.S. large-, mid- and small-cap stocks; U.S. corporate, mortgage-backed and government debt; and developed and emerging market equities.


The global bond fund will provide exposure to a wide range of debt, including U.S. government, mortgage-backed and municipal debt; high-yield and investment-grade debt; foreign currencies; floating rate bank loans; convertible bonds; developed and emerging sovereign debt; and developed-market inflation-protected bonds.


Global X currently has three “Guru” funds trading that operate under a similar premise; the largest, the Global X Guru Index ETF (GURU | B-72), has gathered $280 million in assets under management since its launch in June 2012.


The IndexIQ filing didn’t include tickers or expense ratios.


Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.