IndexIQ Announces Updates and Enhancements to its IQ Real Return “CPI” ETF
The fund will reduce its management fees and start tracking a new Bloomberg index linked to inflation to better reflect the market environment and the changing inflationary landscape.
NEW YORK, December 17, 2021– (BUSINESS WIRE) – IndexIQ today announced that effective February 28, 2022, the IQ Real Return ETF (ticker: CPI) will start tracking the Bloomberg IQ Multi-Asset inflation index in the part of a new relationship with Bloomberg Index Services Limited. IndexIQ believes that the time has come to change the strategy of the CPI ETF in order to provide investors with better exposure to inflation.
Under these changes, the Fund will aim to provide investors with a hedge against the rate of inflation by providing diversified exposure to assets that have historically displayed positive sensitivity to the Consumer Price Index, or CPI.1 The Bloomberg IQ Multi-Asset Inflation Index is composed of short, medium and long-term Inflation-Protected U.S. Treasury Securities (TIPS), large-cap U.S. equities and commodities, which may include direct exposure to commodities or exposure through pooled vehicles or derivatives.
In addition, upon the change of the Fund to the Bloomberg Index, the management fee will drop from 0.48% to 0.29%, making it one of the most competitively priced inflation-driven ETFs. on the market.2
Salvatore Bruno, Director of Investments at IndexIQ noted:
“The risk of inflation is rising sharply with the November Consumer Price Index surging to a level not seen in 39 years. The Fed is reacting to this and other data and may very well plan to cut further to the future. This is undoubtedly a growing concern of most investors, and we want to ensure that investors have the tools they need to better manage their portfolios against inflation. happy to announce these changes . “
Ian Forrest, Head of IndexIQ noted:
“We are excited to leverage the capabilities and expertise of Bloomberg’s index team to better position the CPI to better suit investor portfolios. There have been a lot of changes in the economy and the market since we launched the CPI ETF 12 years ago and we believe these adjustments make the fund one of the most unique and attractive options available for. any investor or advisor trying to manage portfolios against inflation. “
For more information about the fund and IndexIQ’s full range of ETF offerings, as well as information and commentary on inflation and the current market environment, please visit our website here.
IndexIQ, a New York Life Investments company, is a provider of exchange-traded funds (ETFs), with a decade of delivering highly differentiated and innovative solutions to retail and institutional investors. With $ 4.9 billion in assets under management as of September 30, 2021, IndexIQ leverages the asset management capabilities of New York Life Investments’ multi-store platform through its range of offerings which include: Fixed income, equities, alternatives, ESG components and specialized assets Classes. For more information on IndexIQ, visit newyorklifeinvestments.com/etf or follow us on Twitter or LinkedIn.
Debt Securities Risk
In general, the bond market is volatile and fixed income securities carry interest rate risk. (When interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry an inflation risk, a risk liquidity, purchasing risk and credit and default risks for issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so it is not possible to avoid losses caused by price volatility by holding them to maturity.
Exposure to commodity markets may subject the Fund to greater volatility than investments in traditional securities, and exposure to commodities, directly or through other securities, may cause the Fund to decline or fluctuate rapidly and unpredictable value of the Fund’s assets.
Derivatives often involve a high degree of financial risk as a relatively small movement in the price of the underlying security or benchmark index can result in a disproportionate movement, unfavorable as well as favorable, in the price of the instrument. derivative. Investments in derivatives may increase the volatility of a fund’s net asset value and may result in a loss to the fund.
Security risk protected against inflation
The value of inflation-protected securities, including TIPS, will generally fluctuate in response to changes in “real” interest rates, generally decreasing when real interest rates rise and increasing when real interest rates fall. .
Large Cap Risk
Large-cap companies may be less able than small-cap companies to adapt to changing market conditions. Large-cap companies may be more mature and subject to more limited growth potential compared to smaller-cap companies. Over different market cycles, the performance of large-cap companies has lagged behind the overall performance of the broader securities markets.
Bloomberg Index Services Limited serves as the index provider for the new index. An investment cannot be made in an index. The new index seeks to provide investors with a hedge against the rate of inflation by providing diversified exposure to assets that have historically displayed positive sensitivity to the Consumer Price Index, or CPI. The new index is comprised of U.S. Treasury Inflation-Protected Securities (TIPS) short-, medium- and long-term US equity and commodity securities, which may include direct exposure to commodities or exposure. via pooled vehicles or derivative instruments. .
Carefully consider the investment objectives, risks, fees and expenses of the Funds before investing. The prospectus and the supplementary information statement include this and other relevant information about the Funds and are available on the IQetfs.com website. Read the prospectus carefully before investing.
“New York Life Investments” is both a service mark and the common trade name of certain investment advisers affiliated with The New York Life Insurance Company. IndexIQ® is the indirect wholly owned subsidiary of New York Life Investment Management Holdings LLC and serves as an advisor to the IndexIQ ETFs. ALPS Distributors, Inc. (ALPS) is the primary underwriter of ETFs, and NYLIFE Distributors LLC is a distributor of ETFs. NYLIFE Distributors LLC is located at 30 Hudson Street, Jersey City, NJ 07302. ALPS Distributors, Inc. is not affiliated with NYLIFE Distributors LLC. NYLIFE Distributors LLC is a FINRA / SIPC member.
“New York Life Investments” is both a service mark and the common trade name of certain investment advisers affiliated with The New York Life Insurance Company.
“Bloomberg®” and Bloomberg IQ Multi-Asset Inflation Index are service marks of Bloomberg Finance LP and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the Index (collectively, “ Bloomberg ”) and have been licensed for use for certain purposes by Bloomberg IQ Multi-Asset Inflation Index. Bloomberg is not affiliated with IndexIQ Advisors LLC and Bloomberg does not endorse, approve, review or recommend IQ Real Return ETF. Bloomberg does not guarantee the timeliness, accuracy or completeness of any data or information relating to IQ Real Return ETF.
1 The Consumer Price Index (CPI) is a measure that examines the weighted average of the prices of a basket of consumer goods and services, such as transportation, food, and health care. It is calculated by taking the price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living.
2 IndexIQ the advisor has contractually agreed to waive a portion of the management fee corresponding to 0.06% of the average daily net assets of the Fund until August 31, 2022.
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