IndexIQ Launches Short Duration Core Bond U.S. ETF
NEW YORK--(BUSINESS WIRE)--Dec 18, 2018--IndexIQ, a New York Life Investments Company and a leading provider of innovative investment solutions, today announced the launch of the IQ Short Duration Enhanced Core Bond U.S. ETF (NYSE Arca: SDAG), further expanding the firm’s suite of factor-based fixed income ETFs.
SDAG seeks to outperform the short duration, U.S. dollar-denominated taxable fixed income universe by using a momentum tilted factor strategy. The Fund tracks, before fees and expenses, the performance and yield of the IQ Short Duration Enhanced Core Bond U.S. Index.
SDAG joins a growing family of fixed income ETF offerings from IndexIQ that already includes three first-of-their-kind factor-based fixed income offerings: the IQ Enhanced Core Bond U.S. ETF (NYSE Arca: AGGE ) and IQ Enhanced Core Plus Bond U.S. ETF (NYSE Arca: AGGP ), which were launched in May of 2016, and the IQ S&P High Yield Low Volatility Bond ETF (HYLV), the first high yield low volatility fixed income ETF, which launched in February of 2017.
Salvatore Bruno, Chief Investment Officer of IndexIQ said: “We are delighted to be expanding our fixed-income suite with our first ever short-duration ETF, something we view as a natural extension of work that began with the launch of our Enhanced Core suite of fixed income funds in 2016. After several years of abnormally low rates, we once again find ourselves in a rising rate environment, a situation where investors often move to the shorter end of the yield curve. By combining short duration exposure with a momentum-driven approach, investors now have a powerful tool for gaining exposure to this key area of the fixed income market while also adding the potential for outperformance.”
Added Kelly Ye, Director of Research: “At IndexIQ, we are always looking for new ways to help investors meet their goals, particularly when it comes to income. The short-duration bond market is a logical next step in applying a factor-based approach to investing, and we believe SDAG serves as an important complement in many different types of yield-focused investors’ portfolios.”
IndexIQ, a New York Life Investments Company, is a global provider of exchange-traded funds (ETFs), with a decade of offering highly differentiated and innovative long-term solutions to retail and institutional investors. Today, with assets under management of $4.1 billion, IndexIQ leverages the first-class asset management capabilities of New York Life Investments’ multi-boutique platform into its suite of offerings which include: fixed income, equities, alternatives and specialty asset classes.
Before considering an investment in the Fund, you should understand that you could lose money. The Fund’s investment performance, because it is a fund of funds, depends on the investment performance of the ETPs in which it invests. The performance of the underlying Index and the Fund may deviate from that of the markets the underlying Index seeks to track due to changes that are reflected in the sector more quickly than the quarterly rebalancing process can track. Funds that invest in bonds are subject to interest rate risk and can lose principal value when interest rates rise.
Bonds are also subject to credit risk, which is the possibility that the bond issuer may fail to pay interest and principal in a timely manner. High-yield securities have speculative characteristics and present a greater risk of loss than higher-quality debt securities. These securities can also be subject to greater price volatility. Floating rate funds are generally considered to have speculative characteristics that involve default risk of principal and interest, collateral impairment, non-diversification, borrower industry concentration, and limited liquidity. Investing in below investment grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds.
As a new fund, there can be no assurance that it will grow to or maintain an economically viable size, in which case it may experience greater tracking error to its underlying Index than it otherwise would at higher asset levels, or it could ultimately liquidate.
The IQ Short-Duration Enhanced Core Bond U.S. Index seeks to outperform the short-duration, U.S. dollar-denominated, taxable, fixed-income universe by using a momentum investing strategy, which seeks to capitalize on the persistence of ongoing trends in the market. Momentum is measured by comparing a short-horizon (45-day) moving average of returns to a longer-horizon (90-day) moving average of returns.
Consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus and the statement of additional information, including this and other relevant information about the Fund, are available by visiting nylinvestments.com/etfs or calling 888-474-7725. Read the prospectus carefully before investing.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units,” and otherwise, can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in-kind.
New York Life Investments is a service mark and name under which New York Life Investment Management LLC does business. New York Life Investments, an indirect subsidiary of New York Life Insurance Company, located at 51 Madison Avenue, New York, New York 10010, provides investment advisory products and services. IndexIQ ® is an indirect, wholly-owned subsidiary of New York Life Investment Management Holdings LLC and serves as the advisor to the IndexIQ ETFs. ALPS Distributors, Inc. (ALPS) is the principal underwriter of the ETFs, and NYLIFE Distributors LLC is a distributor of the 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 Member FINRA/SIPC.
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New York Life Insurance
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PUB: 12/18/2018 11:13 AM/DISC: 12/18/2018 11:13 AM