A sound investment process and strong management team underpin IQ FTSE International Eq Ccy Netrl ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And low momentum exposure is rooted in holding stocks that are not currently on a winning streak and instead holding those that managers believe are undervalued. The team managing the passive product drives the strategy's Above Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

ASML Hld

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Moelis

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Rogers

TotalEnergies SE

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. IQ FTSE International Eq Ccy Netrl ETF earns a High Process Pillar rating. The most notable contributor to the rating is the fund's impressive long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. This fund tracks an index, which also increases its process rating. Historical data, such as Morningstar's Active/Passive Barometer, shows that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 87% contributes to the process as well.

The investment strategy as stated in the fund's prospectus is:  The investment seeks investment results that correspond generally to the price and yield performance of its underlying index, the FTSE Developed ex North America 50% Hedged to USD Index (the "underlying index").  The underlying index is an equity benchmark of international stocks from developed markets, with approximately half of the currency exposure of the securities included in the underlying index "hedged" against the U.S. dollar on a monthly basis. The fund invests, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, and in the securities and other instruments included in its underlying index. 

 The portfolio has allocations in its top two sectors, real estate and healthcare, that are similar to the category. The sectors with low exposure compared to category peers are energy and financial services; however, the allocations are similar to the category. The portfolio has 804 holdings and is about as top-heavy as the category average, with 14.1% of assets in the top 10 holdings.

High

Process

New York Life’s team earns an Above Average People Pillar rating. The leading driver of the rating is the firm's five-year retention rate of 87%. A low cost, with fees that rank in its category's least expensive quintile, also strengthens the rating. Fees reduce net returns, so the team has a lower expense hurdle to overcome. Lastly, the rating is limited by the parent firm's five-year success ratio of 44%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

Above Average

People

New York Life Investments' collection of autonomous investment boutiques will have a new leader in May 2023, and it will take time to assess his impact. The firm keeps its Average Parent rating.
New York Life, the insurance giant that owns NYL Investments, tapped Naïm Abou-Jaoudé to be the asset manager's CEO after the previous CEO departed. Abou-Jaoudé inherits a firm that has grown by building internally and through acquisition. The firm offers mandates in partnership with 13 different asset managers--eight of which are wholly or partially owned affiliates – through several global outlets. Most U.S. funds fall under the established MainStay brand, whereas IndexIQ oversees a growing lineup of ETFs managed both internally and by other affiliates. Candriam, at which Abou-Jaoudé has been CEO even prior to its 2014 acquisition by NYL Investments, takes the lead in Europe through its own offerings and through those subadvised by other boutiques.
Plenty of these capabilities are compelling, with Candriam and fellow affiliates MacKay Shields and Ausbil sporting standout teams in several wheelhouses. Yet many of the boutiques have also struggled with managing bloated lineups or with improving lagging teams. NYL Investments hasn't shied from changing subadvisors or merging platforms and doesn't have a spotless record of managing capacity or of avoiding trendy offerings.

Average

Parent

IQ FTSE International Equity Currency Neutral ETF

HFXI tracks a market cap-weighted index of large- and mid-cap companies located in developed nations outside of North America, with roughly half of its foreign currency exposure hedged to the USD.

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There's been more talk lately about aiming for diversification through international investing, which wasn't a major topic of discussion for a while.

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On the latest episode of “ETF 360,” VettaFi head of research Todd Rosenbluth was joined by IndexIQ's Dan Petersen. The two discussed IndexIQ's fund, the IQ FTSE International Equity Currency Neutral ETF (HFXI), and the impact of currency hedging.

ETF 360: IndexIQ's Dan Petersen on Currency Hedging

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Some experts believe that over long holding periods, investors embracing international equities and the related exchange traded funds don't need to worry about foreign currency fluctuations.

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The recent U.S. withdrawal from Afghanistan will impact geopolitical considerations in U.S. foreign policy and national security strategy, particularly with our global neighbors from China, Russia, Iran, and the European Union. In the upcoming webcast, Geopolitical Risks That Could Potentially Impact Portfolios In 2022, John Sitilides, Principal, Trilogy Advisors; and Lauren Goodwin, Portfolio Strategist, New [.

Geopolitical Risks That Could Potentially Impact Portfolios In 2022

Volatility is making an unwelcome comeback as global economies continue to re-open, highlighting the importance of hedged assets like the IQ 50 Percent Hedged FTSE International ETF (HFXI). “Volatility is back for global stock markets, triggered by uncertainty over central banks' plans for monetary policy and rising Covid-19 cases around the world,” a CNBC report [.

As Volatility Returns, Hedge International Equities with ‘HFXI'

One of the challenges with investing overseas is the susceptibility of the local currency of international markets, warranting a dollar-hedging component with exchange traded funds (ETFs) like the IQ 50 Percent Hedged FTSE International ETF (HFXI). The prevailing sentiment in the capital markets is that an improving economy will eventually cause the U.S. Federal Reserve [.

Need a Hedging Component in Your International Assets?

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Developed-market (DM) household savings recorded a significant gain last year, with an increase equivalent to 10% of combined gross domestic product (GDP). This build-up is likely to bolster consumption as restrictions on economic and social activity are removed and pent-up demand unlocked.

Will Household Savings Provide An Upside Growth Surprise?

Exchange traded fund investors should consider the importance of a geopolitical framework for investing to help one better understand what these geopolitical shifts mean for investment portfolios. In the recent webcast, Geopolitical Risk: Elections, Lockdowns, and Continual Disruptions, John Sitilides, Geopolitical Strategist, Trilogy Advisors, noted that while the U.S. election has consumed our attention, it [.

International ETFs: Putting the Geopolitical Framework in Perspective

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Liquid alternatives offer investors a third leg of diversification, helping to stabilize portfolio performance by tamping down overall volatility.

Liquid Alternative ETFs Are Ideally Suited For The Coronavirus Sell-Off (Podcast Transcript)

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After what had been a tumultuous 2019, the end of the year is bringing significant progress on a number of fronts that have had investors on edge for months.

IndexIQ 2020 Macro Outlook: Three Actionable Ideas for the Year Ahead

For years, international ETFs were either currency hedged or they weren’t. There wasn’t a middle ground.

Get a Half Currency Hedged With This Unique International ETF

News for IQ FTSE International Equity Currency Neutral ETF ETF (HFXI)