LSEQ vs QAI

LSEQDHarbor Long-Short Equity ETF (LSEQ)

QAIANYLI Hedge Multi-Strategy Tracker ETF

In short

LSEQ A hedge fund playbook in an ETF shell: LSEQ buys the large and mid caps it likes and shorts the ones it doesn't, keeping net long exposure usually between 40% and 60%. Roughly half-invested by design, with room to stretch to 150% long.

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

LSEQ The Fund seeks long-term growth of capital through long and short positions in equity securities. It generally maintains net long exposure of 40% to 60%, with exposure occasionally reaching 150% long.

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

• LSEQ Shorting is the point, not a garnish. The fund runs a long book and a short book across Russell 1000 large and mid caps, so both sides of the trade drive the outcome.sec.gov
• Net exposure has guardrails: normally 40% to 60% long, with room to stretch to 150%. You always know roughly how much market you are carrying.sec.gov
• Hedge fund mechanics without the hedge fund gates: a 1940 Act fund that trades on an exchange, with published holdings, no lockups and no accreditation test.sec.gov
• Active from the ground up: about 160 positions, picked stock by stock rather than tracked, inside a single US large and mid cap universe.sec.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

• LSEQ Costs 2.28% a year against a 0.65% median for active US equity funds. Core rivals like DFAU (0.12%) and DFAC (0.17%) charge a small fraction of that.
• Small asset base and thin trading. Spreads can widen, so limit orders and a look at the quote matter more here than with a giant index fund.
• Shorts cut both ways. When a shorted stock rises, the loss is not capped the way a long position's is, and borrowing those shares carries its own cost.sec.gov

• 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 LSEQ profile⁠

Full QAI profile⁠