HFEQ vs QAI

HFEQBUnlimited HFEQ Equity Long/Short ETF

QAIANYLI Hedge Multi-Strategy Tracker ETF

In short

HFEQ Hedge fund replication, sliced thin. HFEQ assembles a long/short equity book from broad ETFs and futures to mirror the gross-of-fees returns of the hedge fund industry's equity long/short sector, dialed to roughly twice that sector's volatility, for 0.96% a year.

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

HFEQ The Fund seeks capital appreciation through an actively managed equity long/short strategy. It uses long and short positions in broad-based ETFs and futures contracts, and may also use individual equities and swaps to approximate the Equity Long/Short sector's returns with higher volatility.

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

• HFEQ Charges 0.96%, below the typical alternatives fund and under iShares' systematic alternatives ETF (IALT, 0.99%), with no fee waiver propping up the number.
• Exposure comes mainly from broad-based ETFs and futures, with room for single stocks and swaps, keeping the long/short book in liquid, daily-priced instruments.
• The volatility dial is the point: futures scale the book toward roughly twice the equity long/short sector's volatility, amplifying that sector's moves in both directions.sec.gov
• Unlimited's engine reads hedge funds' actual return streams rather than delayed public filings, and HFEQ isolates one sector of that lineup instead of blending them all.yahoo.comsec.gov

• 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

• HFEQ Young and lightly traded since its July 2025 launch, so spreads can widen and limit orders earn their keep.
• Double volatility cuts both ways: the same scaling that magnifies the sector's gains magnifies its drawdowns.sec.gov
• This is an approximation, not the hedge funds themselves, and the portfolio's path can drift from the sector it models.

• 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 HFEQ profile⁠

Full QAI profile⁠