LBAY vs QAI

LBAYCLeatherback Long/Short Alternative Yield ETF

QAIANYLI Hedge Multi-Strategy Tracker ETF

In short

LBAY A hedge-fund playbook in ETF clothing: long the companies returning cash through dividends, buybacks and debt paydowns, short the single names it thinks are broken, net long throughout, 1.20% a year, paid monthly.

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

LBAY The Fund seeks capital appreciation and income through an actively managed long/short equity strategy.

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

• LBAY "Shareholder yield" here means dividends plus buybacks plus debt paydowns, so the long book can hold cash-returners that never clear a plain dividend screen.sec.gov
• The short side is stock-picking, not just hedging: accounting oddities, short-lived fads, weak governance records. Sector and factor ETF shorts are also on the menu.sec.govsec.gov 2
• Longs can reach past common stock into preferreds, BDCs, MLPs, REITs and convertibles, and it can write covered calls on up to 100% of a position.sec.gov
• Runs as a 1940 Act fund with daily trading and monthly distributions, a different shape from the lockups that usually come with this kind of strategy.

• 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

• LBAY At 1.20% the fee sits near the typical alternatives fund, with no cut of the profits on top. Top-ranked peers do run leaner, though: FLSP charges 0.65%.
• Shorting costs money beyond the expense ratio: borrow fees plus any dividends owed on the borrowed shares. A short that keeps climbing has no built-in loss limit.sec.gov
• Small fund, light trading. Spreads can widen, so limit orders and a glance at the day's volume do real work here.

• 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 LBAY profile⁠

Full QAI profile⁠