Discussing IndexIQ's history of Innovation with Jon Zimmerman.


Since its inception, IndexIQ, a New York Life Investments Company, has believed in the importance of being an innovator.  IndexIQ is a provider of innovative Exchange Traded Funds (ETFs).  In a recent interview, Jon Zimmerman, Chief Operating Officer for IndexIQ, discussed how innovation has played a role in every aspect of business at IndexIQ. 

Q: What inspires the people at IndexIQ to think differently?

Zimmerman: Innovation is part of IndexIQ’s DNA. The firm first made a name for itself by carving out an entirely new product category, the liquid alternatives space, and as a firm very much stayed true to an ethos of avoiding launching “me too” products.

The way in which New York Life entered the ETF market is itself innovative. By acquiring IndexIQ, it not only gave NYLIM an entry into the ETF market, but did so as a leading player in the alternative ETF market. This allowed New York Life to expand upon IndexIQ’s history of innovation to offer unique strategies in what has become a crowded market. ETFs are growing and the asset management landscape is evolving, so we have to be innovative to understand what clients need now and what they’ll need in the future.

We are a small firm with a start-up mentality and that way of operating continues today, even though we are part of a larger 173-year-old life insurance company. Given our size, we try to maintain a relatively flat reporting structure. There are only 24 people dedicated to IndexIQ, but our distribution and marketing is fully integrated into NYLIM, so we’re innovative in how we’re structured too.

"ETFs are growing and the asset management landscape is evolving, so we have to be innovative to understand what clients need now and what they’ll need in the future." - Jon Zimmerman, Chief Operating Officer for IndexIQ

Q: How does innovation go from idea to execution at IndexIQ?

Zimmerman: Chief Investment Officer Sal Bruno and I encourage innovation, and it’s been ingrained in IndexIQ’s culture from the beginning. It’s a cycle of planning and testing, adapting and evolving, and constantly considering new approaches that could help deliver meaningful solutions to clients.

Innovation for us also doesn’t resolve solely around new funds. In fact, we want to see innovation in the ways we’re working to support our existing products, such as providing investors with value-added content. Many of our clients are financial advisors and sophisticated investors. They don’t want non-stop product pitches; they want information on trends, macro-economics, and how to build portfolios.

To that end, we’ve got dedicated teams led by experienced professionals heading up not only product innovation but innovations in outreach and communications as well. Kelly Ye and Adam Sze run Research & Development and Product Development, respectively, and really lead the charge with new product innovation. Dan Petersen and Mark Lacuesta, who head Product Management and Index Strategies, respectively, take a lead role in working with our advisor consultants and our marketing colleagues to drive content supporting our strategies.


Q: What are some of the innovative things IndexIQ has done?

Zimmerman: We are best known in the industry for our liquid alternatives suite. These funds provide alternative investment exposure, while providing investors with more flexibility, lower fees, and tax advantages—all hallmarks of ETFs. A highlight within this suite is our Merger Arbitrage strategy, (ticker MNA) which seeks to systematically take advantage of the difference between a target’s current price and the announced acquisition price.

Our approach here is quite innovative because of how we deliver it in an ETF. The strategy has built an impressive long-term track record as it seeks to provide a differentiated return stream for investors to diversify their portfolios.


Q: What are your general thoughts on having a growth mindset at the individual level?

Zimmerman: We all have a role to play in thinking differently and finding new ways to improve the business. Know that you have a voice, take a broader interest in the business, and try to help out where you can. Find ways to make others more efficient, always be willing to adapt, and don’t be afraid to be the first to try something. I think everyone at IndexIQ shares that mindset and that’s how innovation happens.

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