Hedge funds aim to generate maximum returns for their investors, regardless of the market’s movements. This makes these funds a good portfolio diversifier. The IQ Hedge Multi-Strategy Tracker ETF (QAI), while taking the largest chunk of the inflow, correlates the market (SPY) at 0.94. The same applies to the IQ Hedge Merger Arbitrage ETF (MNA), whose major holdings include Hospira (HSP), Cigna (CI), Office Depot (ODP), and Omnishare (OCR) and which have a positive correlation with the market.
The WisdomTree Managed Futures ETF (WDTI) and the PowerShares Multi-Strategy Alternative Portfolio ETF (LALT) have an adverse correlation of 0.17 and 0.18, respectively. This fulfills the condition to be a true hedge ETF.
View more information: https://marketrealist.com/2015/07/lalt-true-hedge-etf/