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In Part Two of our conversation with Adam Patti. the CEO of IndexIQ talks about his firm’s mutual fund and some ETFs that replicate hedge-fund performance, as well as some the natural resources and commodities sectors. (You can read Part One here .)

Listen to the complete interview here .

Kate Stalter. You also have a mutual fund that replicates hedge-fund investment. Say a little bit about that.

Adam Patti. Yes, that is actually our first investable product, and that is very similar to the ETF I just mentioned, IQ Hedge Multi-Strategy Tracker ETF (QAI ). It is a very similar product; it’s just really the mutual fund version.

So that was our first product. It has three, almost four years of actual history. [This is the IQ Alpha Hedge Strategy Fund (IQHOX )—Editor.]

It’s actually been our most successful product overall in terms of asset flows, QAI being our second- most successful [product] and the most successful ETF we have. Those products have been done very well.

And look—investors need to hedge. You need to diversify your portfolios. Problem is, unless you’re Warren Buffett or unless you’re CalPERS, big institutional investors, you’re not going to have access to hedge funds.

So how do you do it? These products were designed to help; they really democratize alternative investing. We have several of these.

We have a global macro version, IQ Hedge Macro Tracker ETF (MCRO ). We’ve got a merged arbitrage ETF, which is IQ Merger Arbitrage ETF (MNA ). So we’ve got a number of products really designed to help retail investors get more diversified.

Kate Stalter. I want to touch on one more category where IndexIQ is very strong, and that’s the natural resources area, commodities. In a number of the interviews I do, Adam, people have been talking about strength they see in those particular categories. Can you say something about that?

Adam Patti. Sure. And we definitely have the most unique commodity exposures. Our flagship commodity product is ticker symbol IQ Global Resources ETF (GRES ).

It’s the broadest commodity ETF in the marketplace. It includes all the major commodity classes you would expect in a commodity fund, but it also has timber, water, and coal in the portfolio. So it’s very broad, and it’s been the best performing broad commodity product in the ETF market every year since its inception in 2009, with the lowest volatility.