Liquid alternative ETFs: The next frontier in institutional investing

by: , More than investing. Invested.; IndexIQ,

In a study commissioned by IndexIQ, Greenwich Associates recently interviewed senior fund managers at large U.S. institutions to determine how those investment professionals are currently employing alternative asset classes and ETFs in their portfolios. The study revealed an evolving trend towards more extensive use of liquid alternative ETFs by institutional investors in specific situations

Among the key takeaways from the study:

  • Greenwich Associates projects that institutional investments in liquid alternative ETFs will more than double in the next 12 months.
  • Nearly 20% of institutions not currently investing in liquid alternative ETFs say they will consider using them in the year ahead;
  • Roughly 1 in 10 current investors plan to increase allocations to liquid alternative ETFs in the next year;
  • Relatively low costs, liquidity, transparency and diversification are cited as the main benefits of liquid alternative ETFs;
  • Among the main implementation cases, transition management, fund of funds replacement and core allocations are cited as the most common uses for liquid alternative ETFs

Greenwich Associates suggests that liquid alternative ETFs, while still in their very early stages in the institutional marketplace, are projected to follow a similar trajectory of adoption as ETFs and liquid alternatives and are poised for long-term growth within institutional portfolios.

To learn more about the growth of liquid alternative ETFs within the institutional space, download the full Greenwich Associates Institutional Liquid Alt ETF report.


About risk
There are risks involved with investing in any such products, including the possible loss of principal.

“New York Life Investments” is both a service mark, and the common trade name, of the investment advisors affiliated with New York Life Insurance Company. 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. 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.

Greenwich Associates is not affiliated with IndexIQ Advisors LLC.


New York Life Investments

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We operate in four continents with local partners, working with our clients every day and seeing the challenges through their eyes. We live in the same communities where their capital goes to work, sometimes investing alongside our clients because if the investment is right for them then it’s right for us. We are a global investment manager with over $500 billion in assets under management.

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IndexIQ, a New York Life Investments Company, is a trusted provider of innovative financial solutions. IndexIQ ETFs are built and delivered in a way that provides exposures that investors can rely on. A subsidiary of one of the oldest and largest life insurance companies in the world, we have a solid foundation and the resources to continue our culture of innovation…

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