iQ Global ETF Income Model
Investment Objective
The iQ Global ETF Income Model is for investors who want their fixed income allocation working as hard as possible. Rather than parking money in a static bond fund, the model systematically searches the entire landscape of income-focused ETFs — spanning investment grade, high yield, municipal, mortgage-backed, Treasury, inflation-protected, developed international, emerging market, and floating rate debt — and each quarter selects the five with the strongest momentum and improving technicals. Income first, with an eye on total return. The Model reconstitutes every February, May, August and November.
Investment Process
The iQ Global ETF Income Model begins with the full universe of domestically-traded income ETFs — several hundred funds across every major bond category — and works through three sequential filters:
Liquidity: ETFs are ranked by dollar volume and the top 150 advance, ensuring every candidate is tradeable at institutional size without meaningful friction.
Yield: The top 60 by current yield advance — keeping the model anchored to funds genuinely delivering income rather than those with negligible distributions.
Momentum & Relative Strength: The top 15 by 3-period earnings revision momentum advance, then the final 5 are selected by 6-month minus 3-month relative strength — identifying funds where intermediate-term momentum is accelerating relative to the near term.
The model selects 5 ETFs, reconstituted every February, May, August, and November.
Potential Benefits
Starting with several hundred ETFs across every corner of the fixed income market means the model has genuine flexibility. Whether the opportunity sits in high yield, munis, emerging market debt, floating rate, or Treasuries — it is all eligible. The model goes where the income and momentum are, not where a static allocation says to be.
The three-step filter sequence keeps the process honest. Liquidity ensures execution is clean. Yield keeps income at the center of the selection. The earnings revision and relative strength filters then identify the funds where the fundamental and price momentum are both moving in the right direction simultaneously — a more durable basis for selection than yield alone.
Potential Risks: Concentrating in 5 positions means a single distribution cut, credit event, or sharp price reversal can move the portfolio considerably. The yield filter naturally gravitates toward higher-risk segments — high yield and emerging market debt in particular — which tend to sell off together during risk-off environments, limiting the diversification the broad starting universe would otherwise suggest. Interest rate movements, credit risk, and geopolitical events can all influence performance in ways the quarterly reconstitution may not respond to quickly enough.