IndexIQ, the New York-based developer of alternative indexes and exchange-traded funds, has taken the first step towards launching a 130/30 ETF, filing a 40-APP application with the SEC earlier this week. IndexIQ currently maintains the IQ 130/30 Index, a rules-based benchmark that employs fundamental factors to select U.S. stocks with a long exposure of 130% and short exposure of 30%. According to the company’s Web site, the index uses “a purely quantitative, multi-factor model that leverages the alpha generated by a customized quantitative model combined with the controlled use of short positions to enhance the risk-adjusted returns of the portfolio.” [click to continue…]
When analyzing the of the ETF industry, most investors highlight the cheap, liquid exposure to traditional asset classes as the main reason for the popularity of the exchange-traded structure. While ETFs have indeed provided a low-cost alternative to the traditional asset classes, they have also made it easier than ever to achieve exposure to “exotic” asset classes, geographies, and investment strategies. From Van Eck’s Vietnam ETF (VNM) to Direxion’s line of 3x leveraged ETFs to various physically-backed and futures-backed commodity products, ETFs have greatly expanded the investment universe available to all types of investors. [click to continue…]
Direxion, best known as the leading provider of 3x leveraged and inverse leveraged ETFs, is apparently planning to diversify its product line a bit. The Newton, Massachusetts-based ETF provider has amended a previous filing with the SEC, requesting regulatory approval to launch a 130/30 ETF. Leveraged ETFs have come under fire lately, and while there [...]
