IndexIQ Advisors filed paperwork with the Securities and Exchange Commission for permission to list what is believed to be the first U.S.-based exchange-traded fund to invest in diamonds.
The fund, titled the “IQ Physical Diamond Trust,” would hold natural 1 ct. diamonds certified by the Gemological Institute of America, according to its SEC filing.
The firm’s paperwork notes that diamond prices have increased since 2003, and argues that, in the last few years, the price of 1 ct. diamonds has appreciated at a rate outperforming gold bullion.
“The diamond market has been less prone to the cyclical price fluctuations typical of many commodities,” the filing says, “due both to its retail product nature and the strong market position of major market participants.”
Other diamond investment funds have been listed overseas, the paperwork notes, including Diamond Circle Capital, listed on the London Stock Exchange, and the KPR Capital Fund.
A spokesman for IndexIQ Advisors did not return a call from JCK for comment.