ROOF Profile
The IQ U.S. Real Estate Small Cap ETF is designed to offer investors targeted exposure to the small-cap segment of the U.S. real estate sector. Under normal market conditions, the fund allocates at least 80% of its net assets, including any borrowings for investment purposes, into the securities that constitute its underlying index. This index is a rules-based, modified capitalization-weighted, and float-adjusted benchmark tailored to reflect the performance of small-cap companies involved in real estate activities. By focusing on companies with smaller market capitalizations, the fund aims to capture the growth potential inherent in this segment of the real estate market.
The underlying index includes companies that are publicly traded in the U.S. and are primarily engaged in real estate investment and management. This encompasses a diverse range of real estate-related businesses, such as real estate investment trusts (REITs), real estate operating companies (REOCs), and firms involved in property development and management. The index’s methodology ensures a representative exposure to the small-cap real estate sector, leveraging a modified capitalization weighting to balance between growth potential and risk.
The ETF’s strategy focuses on delivering performance that aligns with the index by investing predominantly in the securities that are part of the index. The use of a modified capitalization-weighted approach helps to capture the performance characteristics of the smaller real estate companies while maintaining a degree of liquidity and manageability. As a non-diversified fund, it concentrates its investments within the specific sector of small-cap real estate, which may lead to higher volatility compared to more broadly diversified funds.
Investors in the IQ U.S. Real Estate Small Cap ETF can expect exposure to the growth opportunities and risks associated with smaller real estate companies in the U.S. market. The fund's focus on small-cap real estate firms allows it to potentially benefit from the dynamic nature of this sector, though it also exposes investors to higher volatility and sector-specific risks. This targeted approach is ideal for those seeking specialized exposure to the small-cap segment of the U.S. real estate market.
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