IndexIQ Announces Updates to its IQ Global Resources ETF (GRES)

Rhea-AI Summary

IndexIQ announced strategic updates to the IQ Global Resources ETF (GRES) effective August 31. The fund will adopt a new long-only strategy, dropping short positions, and implement a tiered weighting approach distributing 30% each to Energy, Metals, and Agriculture, with 5% to Water and Timber. Coal exposure has been eliminated, enhancing climate awareness. Additionally, the management fee is cut over 50% from 75 bps to 30 bps, making it one of the most competitively priced diversified natural resource ETFs. These changes aim to align with investor needs during inflationary periods.

Positive

• Management fee reduced by more than 50%, from 75 bps to 30 bps.
• Introduces a tiered weighting approach for diversified exposure.
• Elimination of coal aligns with improved climate considerations.
• Adoption of 100% long-only strategy may attract risk-averse investors.

Negative

• None.

As of August 31, the fund’s underlying index has a new weighting structure, removes exposure to coal; fund management fee reduced to 30 bps

NEW YORK--(BUSINESS WIRE)-- IndexIQ today announced multiple strategic enhancements to its IQ Global Resources ETF (GRES).

GRES will continue to offer investors and advisors a broadly diversified investment approach to accessing natural resources and various areas of the commodity market by investing in global companies that operate in commodity-specific market segments and whose equity securities trade in developed markets.

Going forward, GRES will be 100% long-only, removing short positions from the portfolio. Additionally, the fund’s approach is shifting from a momentum/valuation-based weighting scheme to a tiered weighting approach. Energy, Metals (including industrial metals and precious metals), and Agriculture (grains, food & fiber, and livestock) will each make up 30% of the fund’s underlying holdings. Water and timber will each receive a 5% weighting. Coal is also being removed from the universe of underlying commodity sub-sectors.

The fund’s management fee is also being reduced by more than 50%, from 75 bps to 30 bps, making it one of the most competitively priced diversified natural resource ETFs on the market.

Sal Bruno, CIO of IndexIQ, said:
“We’ve designed these updates to the strategy that underpins GRES to better align with clients’ needs for a purer, more consistent commodity and natural resource exposure and to offer a competitively priced portfolio solution that also has improved climate awareness. In a time of inflationary concerns, when commodity exposure can provide a powerful hedge, it is important for investors to have exposure to the major areas of growth across the commodity space while avoiding concentration risk, and that is just what we have sought to do with these changes to GRES.”

About IndexIQ
IndexIQ, a New York Life Investments company, is a provider of exchange-traded funds (ETFs), with a decade of offering highly differentiated and innovative solutions to retail and institutional investors. With $4.2 billion in assets under management as of December 31, 2020, IndexIQ leverages the asset management capabilities of New York Life Investments’ multi-boutique platform into its suite of offerings which include: fixed income, equities, alternatives, ESG components and specialty asset classes. For additional information on IndexIQ, visit newyorklifeinvestments.com/etf or follow us on Twitter or LinkedIn.

Disclosures

Before considering an investment in the Fund, you should understand that you could lose money.

Impact investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating.

Consider the Fund's investment objectives, risks, and charges and expenses carefully before investing. The prospectus and the statement of additional information include this and other relevant information about the Fund and are available by visiting www.newyorklifeinvestments.com or calling 888-474-7725. Read the prospectus carefully before investing.

"New York Life Investments" is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company. IndexIQ® is the 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210901005281/en/

Media:

Allison Scott

New York Life

(212) 576-4517

allison_scott@nylim.com

IndexIQ

Chris Sullivan/Julia Stoll

MacMillan Communications

(212) 473-4442

chris@macmillancom.com

Source: IndexIQ

FAQ

What changes were made to the IQ Global Resources ETF (GRES) on August 31?

The fund removed short positions, adopted a tiered weighting approach, eliminated coal exposure, and reduced the management fee from 75 bps to 30 bps.

How is the IQ Global Resources ETF (GRES) structured after the recent changes?

GRES now allocates 30% to Energy, Metals, and Agriculture, with 5% each in Water and Timber, focusing solely on long positions.

Why was coal exposure removed from the IQ Global Resources ETF (GRES)?

Coal exposure was removed to enhance climate awareness and align with changing investor preferences.

What is the significance of the management fee reduction for GRES?

The reduction in management fee from 75 bps to 30 bps makes GRES one of the most competitively priced natural resource ETFs available.

What are the major sectors represented in the IQ Global Resources ETF (GRES)?

The major sectors in GRES include Energy, Metals, and Agriculture, each contributing 30% of the fund's holdings.