HDG vs QAI

HDGBProShares Hedge Replication ETF

QAIANYLI Hedge Multi-Strategy Tracker ETF

In short

HDG A 2011-vintage try at bottling hedge fund beta: HDG tracks an index that swings long or short across six liquid factors to mirror the broad hedge fund universe's risk and return profile, without owning a single hedge fund.

QAI The original hedge fund replication ETF, listed in 2009: a fund of roughly 50 exchange-traded products tracking an index built to mimic hedge fund styles, for 0.81% net of a fee waiver (1.03% gross).

Stated mandate

HDG HDG seeks to track the Merrill Lynch Factor Model – Exchange Series, a benchmark designed to provide the risk and return characteristics of a broad hedge fund universe.

QAI The Fund seeks to track the performance of the IQ Hedge Multi-Strategy Index before fees and expenses. It uses passive indexing and invests primarily in exchange-traded products and related financial instruments representing the index.

Why people hold it

• HDG The index takes long or short positions in six factors (US, developed and emerging stocks, small caps, the euro, T-bills), reset monthly. No lockups, no hedge funds.proshares.comcbonds.com
• Costs 0.95% a year, below the typical alternatives ETF, and as a 1940 Act fund it charges no performance fee on top.
• Trading since 2011, an elder statesman in a category where alternatives launches come and go. Pays quarterly and sits in the upper half of its peer group.

• QAI Billed as the first US-listed hedge fund replication ETF when it launched in March 2009, so it carries a record across multiple market cycles rather than a backtest.asiaasset.com
• Costs 0.81% net of a fee waiver (1.03% gross), below the alternatives category median and under IALT's 0.99%.
• Plain plumbing for an exotic idea: it holds exchange-traded products and related instruments to passively track the IQ Hedge Multi-Strategy Index, and trades on an exchange all day.
• Stands near the front of the roughly 30 alternatives funds in its peer group on our review.

Worth knowing

• HDG Small and thinly traded, so spreads can be wide and large orders move the price. Getting in and out takes more care than with a mainstream ETF.
• ProShares says results can differ materially from the HFRI hedge fund benchmark at times, and the exchange-series index is likely to lag the original model.proshares.comproshares.com 2
• This is hedge fund beta, not a market hedge: the factor mix leans on equity indexes, so it can move down alongside stocks.cbonds.com

• QAI Fund-of-funds design means your exposure runs through other ETFs and the index's mapping of them to hedge fund styles, with gross expenses of 1.03% against the 0.81% net line.
• Cheaper shelves sit nearby: FLSP at 0.65% and HBDC at 0.39%, though neither runs the same multi-strategy replication mandate.
• Moderately traded rather than a category volume leader, and payouts arrive annually or semiannually, so this is not an income-cadence vehicle.

Full HDG profile⁠

Full QAI profile⁠