Infinity Q: The Fund that Checked All the Wrong Boxes
When investments come with warning signs.
A Hedge Fund for the Masses
On Monday, Feb. 22, disaster struck Infinity Q Diversified Alpha Fund (IQDAX). The SEC announced that Infinity Q’s management had asked the commission’s permission to deny redemptions for Diversified Alpha, meaning that its investors would be unable to sell their shares. Shortly thereafter, Infinity Q fired the fund’s portfolio manager, James Velissaris, who was also the company’s founder. (Neat trick, that.)
Why the fund closed its doors (the SEC granted the request) and dismissed its portfolio manager I will divulge shortly. First, though, let’s run through the indicators that should have concerned the fund’s investors. There were many.
John Rekenthaler does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.