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Rating:IndexIQ Takes On Asia, One Country at a Time Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, April 14, 2010

IndexIQ Takes On Asia, One Country at a Time

Reported by Stephanie Bernhard

Rye Brook, New York-based IndexIQ is continuing its globetrotting ETF spree with the launch of the IQ South Korea Small Cap ETF today and the planned launch IQ Taiwan Small Cap ETF in two weeks, according to a company filing. These funds represent the firm's first single-country small cap ETFs in Asia, following the launch of the IQ Canada Small Cap ETF and the IQ Australia Small Cap ETF on March 23.

IndexIQ launched the South Korea fund to capitalize on the country's history of innovation and growth, according to a company press release. IndexIQ sees promise in other Asian economies as well: the SEC filing shows that Hong Kong and Singapore ETFs are also in the works.

Mellon Capital Management serves as a subadvisor to the both the South Korea and Taiwan funds, which both have an expense ratio of 69 basis points. ALPS Distributors is the funds' distributor. The Bank of New York Mellon serves as the funds' administrator custodian, and accounting and transfer agent. Ernst & Young LLP is its independent registered public accounting firm, and Katten Muchin Rosenman LLP provides legal counsel.

Company Press Release

RYE BROOK, New York, (April 14, 2010) – IndexIQ, a leading developer of index-based alternative investment solutions, is introducing the IQ South Korea Small Cap ETF (NYSE Arca: SKOR) focusing on the domestic market of South Korea, it was announced today.

SKOR seeks to replicate, before fees and expenses, the performance of the IQ South Korea Small Cap Index. The market capitalization-weighted Index is intended to give investors a means of tracking the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in South Korea.
SKOR is designed to provide additional Alpha exposure as a satellite holding built around an investor’s core equity portfolio.

“Investors targeting South Korea typically have been required to invest in funds with broad-based exposure to large cap and global companies domiciled or operating in this market,” said Adam Patti, chief executive officer at IndexIQ. “However, the South Korean economy has its own important dynamics, which are perhaps best captured thorough small capitalization companies. The growth of South Korea’s economy has been driven by a robust domestic consumer-class, coupled with an export-driven trade platform, a high-growth technology sector, and the unique status as one of the world’s most innovative countries.”

SOUTH KOREA: Building upon its status as one of the fastest growing economies from the early 1960s to the late 1990s, South Korea continues to rank strongly among the world’s major economies. The growth in South Korea’s economy has been sparked in part by the country’s dedication to innovation and development, with South Korea being crowned the most innovative country in the world.1 South Korea is the first Asian country to host the G-20 Summit, which is to be held in the capital city of Seoul in November 2010, while the nation serves as the current chair of the G-20 major economies.
The largest of the Four Asian Tigers, South Korea seeks to be a leader in several industries in which the nation competes. South Korea has ranked among the world’s largest shipbuilders, auto manufacturers, and oil product exporters, while also sporting among the world’s largest auto assembly plants, shipyards, and oil refineries. Moreover, it is the smaller companies in South Korea that many believe are best positioned for the greatest growth in 2010 and beyond.
To be included in the index underlying SKOR, companies must have a minimum average market capitalization of $150 million for the prior 90-day period; the average maximum capitalization must be equal to the bottom 15 percent ranking of companies in South Korea based on the prior 90 days. Stocks are required to have a minimum average daily trading volume of at least $1 million for the prior 90 days, and a minimum monthly volume of 250,000 shares for the prior six months. The Index’s components and their respective weights are rebalanced quarterly.
IndexIQ is the sponsor of a number of index-based alternative investment products designed to “democratize” the alternative investment landscape, including:
• the first US-listed hedge fund replication Exchange-Traded Fund, the IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI);
• the first Macro and Emerging Markets hedge fund replication ETF, the IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO);
• the first U.S.-listed “real return” ETF which seeks to give investors a hedge against the U.S. inflation rate by providing a return above the rate of inflation as measured by changes in the Consumer Price Index, the IQ CPI Inflation Hedged ETF (NYSE Arca: CPI);
• the first global resources hedged ETF, which seeks to solve the problems associated with the significant overweight in the energy sector inherent in other broad-based commodity products, the IQ ARB Global Resources ETF (NYSE Arca: GRES);
• the first merger arbitrage ETF, the IQ ARB Merger Arbitrage ETF (NYSE Arca: MNA);
• IQ Canada Small Cap ETF (NYSE Arca; CNDA), the first Canada small cap ETF, and IQ Australia Small Cap ETF (NYSE Arca KROO), the first Australia small cap ETF.
• and the first open-end, no-load hedge fund replication mutual fund, the IQ ALPHA Hedge Strategy Fund (IQHIX – Institutional Share Class, and IQHOX – Investor Share Class). IndexIQ products are designed to be liquid, transparent, low cost, and accessible to a broad range of investors.*

The ETFs should be considered a speculative investment entailing a high degree of risk and are not suitable for all investors. An investment in the ETFs does not represent a complete investment program.
Past performance is not a guarantee of future results.

About IndexIQ
Based in Rye Brook, New York, IndexIQ is a 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 innovative alternative investment strategies available to investors in low cost, liquid and transparent products. IndexIQ strategies are marketed through the company’s proprietary investment products and select partnerships with leading global financial institutions.

 

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