iQ ETF Multi-Asset Income Model
Investment Objective
The iQ ETF Multi-Asset Income Model is for investors who want their portfolio working harder than a savings account — generating real, consistent income across equities, fixed income, real assets, and alternative income segments. It does this not by simply chasing the highest yield available today, but by applying a disciplined set of consistency and technical filters to find the income ETFs most worth owning right now. The Model reconstitutes every February, May, August, and November.
Investment Process
The iQ ETF Multi-Asset Income Model begins with all domestically-traded ETFs and works through a sequential filtering process before any final selection occurs.
The first cut is liquidity: ETFs are ranked by 12-month average dollar volume and the top 400 advance — ensuring every candidate can be traded without meaningful friction.
From the survivors, the top 25 by current yield advance. Those 25 are then evaluated across five independent ranking passes, each asking something slightly different:
Minimum Drawdown: Top 20 by 3-period stochastic, then top half by 24-month bond correlation, then the 5 with the smallest 9-period maximum drawdown — the steadiest performers under pressure.
Momentum Confirmation: Same filters, then top 5 by 3-period stochastic — the names with the strongest near-term price momentum within the income cohort.
Oversold Opportunity: Top 25 yield, then top 5 by 9-period stochastic — capturing income ETFs showing emerging positive price momentum from an oversold base.
Mean Reversion: Top 25 yield, then bottom 5 by 12-month minus 3-month relative strength — identifying income ETFs where intermediate momentum has outpaced recent momentum, a classic mean-reversion setup.
The final portfolio of 5 holdings is drawn from the 85th percentile and above of the composite ranking across all four passes.
Potential Benefits
Most income strategies take today's yield at face value. This one doesn't. The three-year yield consistency requirement filters out funds that only look attractive because their price has fallen — the classic yield trap — and keeps only those that have genuinely delivered income through good markets and bad. By the time a fund reaches the final ranking stage, it has a track record, not just a number.
The four independent ranking passes are what give the final selection its conviction. Each one asks a different question about the same income-qualified universe — how has it held up under pressure, is momentum building, is it recovering from a low, is it oversold, has intermediate strength outpaced recent performance? A fund that earns its way through multiple passes has more going for it than one that simply topped a single list.
Potential Risks: Even a three-year yield consistency requirement cannot guarantee that a fund's distribution is sustainable indefinitely — a deterioration in the underlying portfolio's income-generating capacity can emerge faster than the quarterly reconstitution cycle can respond. The technical filters, while designed to avoid chasing deteriorating income funds, are backward-looking and may lag in identifying a genuine breakdown in an ETF's income profile. Concentrating in 5 holdings means a single distribution cut or sharp price decline can have an outsized impact on both income and total return.