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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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IQDAX- If it's opaque, just maybe there's a reason?



  • @Baseball_Fan
    Costs of trading- obvious.
    Costs for pursuing a class action suit on behalf of the shareholders- obvious.
    Costs for defending said suit- especially in light of potential fraud- to be borne by the same shareholders? not so obvious- ironic maybe.

    Now that 93% of the assets are in cash with only stocks remaining to sell, liquidation should be eminent. But it looks to me what's really holding even this up is waiting to determine the amount of "reserves" to keep for the costs of bringing in third parties to clean up their pricing mess as well as for the costs for potential litigation costs. More irony.

    I have no idea what will be returned to shareholders.
  • @zenbrew

    just saw this on Institutional Investor, dated March 29th article

    The firm said Friday that the fund had nearly $1.25 billion in cash and cash equivalents. This is compared to the fund’s last-calculated net asset value of $1.73 billion as of February 18.

    So...maybe 25-30-35% haircut for holders of this kaka....we'll much do you think the vigorish of the wonderful law firms will be...

    Oy Vey, could have spend a couple nice weeks in Miami on the beach with the monies...



    Baseball Fan
  • On February 18, which was the last day Infinity Q calculated the net asset value for the fund, it was valued at nearly $1.73 billion, the announcement said. This is compared to an asset value of almost $1.25 billion — before considering liabilities and other deductions required for calculating net asset value — as of Thursday.

    The difference between the two valuations — which are not perfectly comparable — is $477.7 million, or nearly 28 percent. The fund attributed the differences primarily to over-the-counter positions, including variance swaps and other options positions, which represented roughly 29 percent of the fund’s net asset value as of February 18, according to the announcement.
  • is still in the process of determining the net asset value of the Diversified Alpha portfolio, which could result in decreasing valuations further, the announcement showed. Because of the complexity of the investments held in the portfolio, Infinity Q’s board expects this process to take “several weeks or longer,” the announcement said.

    Infinity Q previously said that its plan to distribute assets to shareholders must be presented to the Securities and Exchange Commission by May 24.
  • @Baseball_Fan I feel your pain. I had money in that fund also.
  • Would any of the losses be covered by SIPC if the fund was held in a brokerage account?
  • @Baseball_Fan

    Since everything is liquidated & in cash now, it would seem distribution should be straight forward & your figures seem about right unfortunately.

    Also unfortunately, they are still recalculating NAV as of February 18 as well as all past NAVs for the past 2 years or more. So who knows what those numbers will be & when that distribution will occur.

    And then there is the matter of "reserves".

    This is their latest FAQ page dated April 8.

    It might end up being more like a 50% loss, at least initially. But they did mention that there might be a second distribution as well.

    Then there are the lawsuits- class action against the fund, Infinity Q Capital Management, and specific individuals responsible and also any potential lawsuit on behalf of the fund against Infinity Q Capital Management to recoup costs incurred through this whole process.

    What SIPC Protects
    SIPC protection is limited. SIPC only protects the custody function of the broker dealer, which means that SIPC works to restore to customers their securities and cash that are in their accounts when the brokerage firm liquidation begins.

    SIPC does not protect against the decline in value of your securities. SIPC does not protect individuals who are sold worthless stocks and other securities. SIPC does not protect claims against a broker for bad investment advice, or for recommending inappropriate investments.

    It is important to recognize that SIPC protection is not the same as protection for your cash at a Federal Deposit Insurance Corporation (FDIC) insured banking institution because SIPC does not protect the value of any security.
    But there is at least one firm advertising to sue your broker if they recommended IQDAX.
  • I guess the only way to protect yourself against this type of misconduct is to stick with funds offered by the household names. Highly unlikely something like this could happen in the first place, and I would think the house would make good on any losses of this type to avoid a disaster to their reputation.
  • @Baseball_Fan are you doing the class action lawsuit as filed by Rosen Law Firm? If you are, I am trying to figure out how to fill out the section under purchases and sales. I bought IQDAX in October of 2020 and sold some of it in January of 2021. The only categories for those transactions are common stock, bonds, preferred stock, puts, and calls. Since it is a mutual fund it falls under none of those categories. Also, do you happen to know that if we don't join a class action lawsuit, it is possible we would get none of our money back? Thanks for any input.
  • @Chinfist ; After googling IQDAX found this.
    A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm’s site: you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Infinity Q you have until April 27, 2021 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff.
    Suggest msf as he is heads above anything I could offer as advice.

    Good luck, Derf
  • @derf Thanks, There are like 3 or 4 different firms saying they are doing class action lawsuits. The Rosen Law Firm says they already filed a claim. I know very little about this stuff, but I was told by someone who might be knowledgeable to go with the firm that already filed a claim.
  • Go ahead and join the class action but don't expect much more than a couple of pennies on the Benjamin's after the lawyers subtract out their fees.
  • @Chinfist, apologies but I am not qualified to answer your question. I haven't planned on it as my thinking is that at this point anything that I recover will be a postitive. In my mind, I'm positioning my investment in IQDAX as a sunk cost and a somewhat cheap lesson as to not get involved in any "black boxey" type of investment as I get older and "wiser". Ouch. Hoping to get ~ 50-60% of my monies invested back. Based on my past experiences, I'm thinking this will drag on in the courts for several years.

    Appears that the young man who ran this fund believes he did nothing wrong.

    What a sheet show. Good Luck to you and stay healthy!

    Baseball Fan

  • @Baseball_Fan thanks and good luck to you. It certainly stinks what happened, and like you I think I have learned a lesson and will think twice about considering this type of fund again, particularly from a smaller fund company.
  • @Chinfist
    It looks like there are at least two firms filing maybe under the same umbrella complaint. Or at least the complaints look identical to me except for Bronstein dating theirs 2/26/21 & Rosen putting their firms name on it with an individual listed in addition to general plaintiff (but theirs is not dated). Bronstein doesn't ask what type of stock, bond, etc. entity. They do ask for shares, dates, & for brokerage statements. I'm no lawyer.

    FWIW: From the WSJ- more on the mispricing that occurred with IQDAX.

    Behind the Mysterious Demise of a $1.7 Billion Mutual Fund
  • No worries. It's that Cathie Woods who's shady.
  • @Mark, cannot tell if you are being mordant?

    FWIW, I do beleive when it is all said and done, most folks will end up losing far more monies riding along with ARK/Woods than who have ridden along with Q Infinity.

    Time will tell, not saying I know anything about anything...just wish good luck and good investing to all,

    Baseball Fan
  • However true that may turn out to be or not be it will be due to the investor's own exuberance or decisions on the direction of the market and their investment choices rather than nefarious dealings by the portfolio manager who has been nothing about wide open about how and why she runs her funds.
  • @zenbrew Thanks for your input. I talked to the attorney who is involved in the suit at Rosen law firm today, to make sure I filled everything out correctly. That “all your information better be correct under penalty of the law” on the form kind of spooks me so I wanted to make sure I got it right.
  • Updated Liquidation Plans
    As we have described in previous updates and FAQs, the Fund has been working diligently with outside experts to analyze the pricing of the Fund’s portfolio at February 18, 2021 and prior periods. That process is ongoing. Simultaneously, the Fund has been undergoing a process to estimate its potential debts, obligations and liabilities, including, without limitation, all contingent, conditional, or unmatured debts, obligations and liabilities known or reasonably ascertainable by the Fund in order to determine an appropriate reserve to satisfy these liabilities. That process is also ongoing.
    Although these efforts are continuing, in order to commence distributing the Fund’s assets to current shareholders as quickly as possible, on May 24, 2021 the Fund submitted a draft Plan of Distribution to the staff of the Securities and Exchange Commission (“SEC”) for its review. The draft Plan of Distribution anticipates an initial distribution of fund assets to current shareholders, but it does not specify the amount of such interim distribution. Accordingly, the Fund requested, and SEC staff has granted, an extension to June 7, 2021 for the Fund to submit a final Plan of Distribution that sets forth all initial reserve amounts and proposes an aggregate amount for an initial distribution of assets to current shareholders.
    The Fund is making every effort to meet the June 7th deadline so that the SEC staff can complete its review of the Plan of Distribution as soon thereafter as possible. After the SEC staff completes its review of the Plan, the Fund will post it on this website and mail it to shareholders.
    The Fund anticipates that it will be able to make an initial distribution to current shareholders within 30 days after the SEC staff completes its review of the Plan.
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