UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22227
IndexIQ ETF Trust
(Exact name of registrant as specified in charter)
800 Westchester Ave., Suite S-710
Rye Brook, NY 10573
(Address of principal executive offices) (Zip code)
Adam S. Patti
IndexIQ Advisors LLC
800 Westchester Ave., Suite S-710
Rye Brook, NY 10573
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-888-934-0777
Date of fiscal year end: April 30
Date of reporting period: April 30, 2014
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
ANNUAL REPORT | APRIL 30, 2014
IndexIQ ETF Trust
IQ Hedge Multi-Strategy Tracker ETF (QAI)
IQ Hedge Macro Tracker ETF (MCRO)
IQ Hedge Market Neutral Tracker ETF (QMN)
IQ Real Return ETF (CPI)
IQ Global Resources ETF (GRES)
IQ Merger Arbitrage ETF (MNA)
IQ Australia Small Cap ETF (KROO)
IQ Canada Small Cap ETF (CNDA)
IQ Global Agribusiness Small Cap ETF (CROP)
IQ Global Oil Small Cap ETF (IOIL)
IQ U.S. Real Estate Small Cap ETF (ROOF)
The investment return and value of each of the Funds’ shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Consider the Funds’ investment objectives, risks, charges and expenses carefully before investing. The prospectus and the statement of additional information include this and other relevant information about the Funds and are available by visiting www.indexiq.com or by calling 1-888-934-0777. Read the prospectus carefully before investing.
Each of the Funds’ performance that is current to the most recent month-end is available by visiting www.indexiq.com or by calling 1-888-934-0777.
The Funds file their complete schedules of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s web site at www.sec.gov. The Funds’ Forms N-Q also may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Each Funds’ premium/discount information is available, free of charge, on the Funds’ website, www.indexiq.com or by calling 1-888-934-0777.
The Funds are distributed by ALPS Distributors, Inc., which is not affiliated with IndexIQ or the Funds’ investment advisor.
IndexIQ® and IQ® are registered service marks of IndexIQ.
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Table of Contents |
4 |
Shareholder Letter (unaudited) |
Dear Shareholder:
For the twelve months ended April 30, 2014, the primary focus for investors was the timing and pace of the plan by the Federal Reserve (the “Fed”) to reduce the latest round of monetary stimulus (named Quantitative Easing 3 or “QE3”). In 2013, the Fed had committed to purchasing $85 billion each month of mortgage bonds and treasury bonds with an open-ended commitment to continue the program until the unemployment rate dropped. With improved economic data and a change at the helm of the Fed from Chairman Bernanke to Chairperson Yellen, the markets watched closely as the Fed began reducing its purchases. Importantly, even as it was removing one source of monetary stimulus, the Fed signaled a commitment to keeping short term interest rates low even after the cessation of its bond purchase program. With a continued accommodative monetary policy and no signs of inflation on the horizon, equity markets continued to move higher. For the second straight 12 month period, U.S. large cap and small cap stocks had returns near 20%. Developed international large cap stocks also participated in the rally, although emerging market stocks were weighed down by concerns of slowing growth in China.
The yield curve initially steepened on the back of the Fed’s moves causing longer duration bond prices to fall, although by end of the period rates had begun to move back down. With interest rates still hovering well below average historical levels, investors continued to look for yield wherever they could find it. High yield corporate bonds in particular moved higher as investors were willing to assume more risk to obtain higher yield.
Commodity returns were generally positive as energy prices were firmer, although precious metals fell sharply on reduced inflation fears.
Investors have recognized that having a well-diversified portfolio is critical to a better long-term investment strategy. Alternative investments have historically provided investors with added diversification to their portfolios. By marrying the diversification benefits of alternative investments and the growth of exchange-traded funds (ETFs), IndexIQ is seeking to provide investors with innovative tools in a dynamic market environment.*
We at IndexIQ call ourselves “The alternative to alternatives” because, despite the attractive features of alternative assets, for the most part, these strategies have not been available to the majority of investors in a liquid and transparent manner. We believe that our solutions bridge this gap by giving investors the alternative asset performance characteristics they are looking for, but in a more liquid and transparent (daily holdings are published) manner relative to typical alternative asset strategies.
I want to personally thank you for your interest in IndexIQ and our investment products. I invite you to visit us at www.indexiq.com or call us at (888) 934-0777 for more information on our company and our investment solutions.
Adam S. Patti
Chief Executive Officer
Registered Representative of ALPS Distributors, Inc
* | Diversification does not eliminate the risk of experiencing investment loss. |
5 |
Management’s Discussion of Fund Performance (unaudited) |
IQ Hedge Multi-Strategy Tracker ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Hedge Multi-Strategy Index, which seeks to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of hedge funds that employ various hedge fund investment styles, which may include but are not limited to macro, long/short, event-driven, market neutral, emerging markets, fixed-income arbitrage and other strategies commonly used by hedge fund managers. The Fund implements its strategy by investing primarily in ETFs representing various asset classes. The Fund does not invest directly in hedge funds.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 4.33% versus 4.29% and 20.44% for the HFRI Fund of Funds Composite Index and Standard & Poor’s 500® Composite Stock Price Index (the “S&P 500 Index”), respectively.
The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in ETFs, to U.S. Equities. International Equities also contributed positively to the Fund, as did Convertible Bonds. Additionally, short exposure to Volatility and Real Estate added to Fund performance.
There were no significant drivers of negative Fund performance; however, the Fund’s Currency exposure underperformed relative to other asset classes within the Fund.
The Fund utilized swaps to effect long exposure to Convertible Bond and Currency returns and short exposure to several asset classes, including, among others, U.S. Real Estate returns, Volatility returns, Domestic and International Equity returns, Corporate Bond returns, and short-term U.S. Treasury Bond returns. The Fund also utilized futures contracts to effect short exposure to Emerging Markets Equity returns, Currency returns and Commodity returns. The use of swaps had a materially positive impact on performance, while the use of futures had a moderately negative impact on performance.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Hedge Multi-Strategy Tracker ETF
(as of April 30, 2014)
1 Year | 5 Year | Since Inception1 | ||||||||||||||
Average Annual | Average Annual | Average Annual | Cumulative | |||||||||||||
IQ Hedge Multi-Strategy Tracker ETF Market Price2 | 4.29 | % | 4.08 | % | 4.39 | % | 24.50 | % | ||||||||
IQ Hedge Multi-Strategy Tracker ETF NAV | 4.33 | % | 4.13 | % | 4.38 | % | 24.44 | % | ||||||||
IQ Hedge Multi-Strategy Index | 5.27 | % | 4.76 | % | 5.02 | % | 28.40 | % | ||||||||
HFRI Fund of Funds Composite Index3 | 4.29 | % | 4.51 | % | 4.65 | % | 26.01 | % | ||||||||
S&P 500 Index | 20.44 | % | 19.14 | % | 20.13 | % | 155.06 | % |
1 | Fund Inception Date: 3/24/2009. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
3 | Data shown above for the HFRI Fund of Funds Composite Index is from 3/31/2009 to 4/30/2014. |
6 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (3/24/2009) to the first day of secondary market trading in shares of the Fund (3/25/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.94%, which includes a management fee of 0.75% and acquired fund fees and expenses of 0.19%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The HFRI Fund of Funds Composite Index is an equally weighted hedge fund index including over 500 domestic and off-shore funds of funds.
The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is designed to represent the equity market in general (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).
The Fund is non-diversified and may be susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The Fund is not suitable for all investors. The Fund does not invest in hedge funds.
There is no guarantee that the Fund itself, or each of the ETFs in the Fund’s portfolio, will perform exactly as its underlying index. The Fund’s investment performance depends on the investment performance of the underlying ETFs in which it invests. The Fund’s underlying ETFs invest in: foreign securities, which subject them to risk of loss not typically associated with domestic markets, such as currency fluctuations and political uncertainty; commodities markets, which subject them to greater volatility than investments in traditional securities, such as stocks and bonds; and fixed income securities, which subject them to credit risk, the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt, and interest rate risk, changes in the value of a fixed income security resulting from changes in interest rates. Leverage, including borrowing, will cause some of the Fund’s underlying ETFs to be more volatile than if the underlying ETFs had not been leveraged.
7 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Hedge Macro Tracker ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Hedge Macro Index, which seeks to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of a combination of hedge funds pursuing a macro strategy and hedge funds pursuing an emerging markets strategy. The Fund implements its strategy by investing primarily in ETFs representing various asset classes. The Fund does not invest directly in hedge funds.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned -0.90% versus 4.29% and 17.23% for the HFRI Fund of Funds Composite Index and the MSCI World Index, respectively.
The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in ETFs, to U.S. Small Cap Equities and the Euro. The Fund also benefitted from Investment Grade Corporate Bond exposure.
The primary driver of negative performance was the Fund’s exposure to Emerging Market Equities and Bonds, International REITs, Gold, Volatility and Currencies.
The Fund utilized swaps to effect long exposure to mid-term Volatility returns, Convertible Bond returns and Corporate Bond returns, and short exposure to several asset classes, including, among others, Currency returns, Domestic and International Equity returns, and Domestic and International Real Estate returns. The Fund utilized futures contracts to effect short exposure to Currency returns and Commodity returns. The use of swaps had a materially negative impact on performance, while the use of futures had a moderately positive impact on performance.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Hedge Macro Tracker ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Hedge Macro Tracker ETF Market Price2 | –1.09 | % | 2.18 | % | 11.13 | % | ||||||
IQ Hedge Macro Tracker ETF NAV | –0.90 | % | 2.21 | % | 11.27 | % | ||||||
IQ Hedge Macro Index | –0.30 | % | 2.73 | % | 14.08 | % | ||||||
HFRI Fund of Funds Composite Index3 | 4.29 | % | 3.90 | % | 20.68 | % | ||||||
MSCI World Index | 17.23 | % | 14.66 | % | 95.35 | % |
1 | Fund Inception Date: 6/08/2009. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
3 | Data shown above for the HFRI Fund of Funds Composite Index is from 5/31/2009 to 4/30/2014. |
8 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (6/8/2009) to the first day of secondary market trading in shares of the Fund (6/9/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 1.00%, which includes a management fee of 0.75% and acquired fund fees and expenses of 0.25%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The HFRI Fund of Funds Composite Index is an equally weighted hedge fund index including over 500 domestic and off-shore funds of funds.
The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).
The Fund is non-diversified and may be susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The Fund is not suitable for all investors. The Fund does not invest in hedge funds.
There is no guarantee that the Fund itself, or each of the ETFs in the Fund’s portfolio, will perform exactly as its underlying index. The Fund’s investment performance depends on the investment performance of the underlying ETFs in which it invests. The Fund’s underlying ETFs invest in: foreign securities, which subject them to risk of loss not typically associated with domestic markets, such as currency fluctuations and political uncertainty; commodities markets, which subject them to greater volatility than investments in traditional securities, such as stocks and bonds; and fixed income securities, which subject them to credit risk, the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt, and interest rate risk, changes in the value of a fixed income security resulting from changes in interest rates. Leverage, including borrowing, will cause some of the Fund’s underlying ETFs to be more volatile than if the underlying ETFs had not been leveraged.
9 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Hedge Market Neutral Tracker ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Hedge Market Neutral Index, which seeks to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of hedge funds pursuing a market neutral strategy. The Fund implements its strategy by investing primarily in ETFs representing various asset classes. The Fund does not invest directly in hedge funds.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 1.17% versus 8.84% and 0.13% for the HFRI Equity Market Neutral Index and the Barclays Capital Short Term Treasury Bond Index, respectively.
The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in ETFs, to International Developed Market Equities and U.S. Equities. The Fund also benefitted from positive exposure to Convertible Bonds.
The primary driver of negative performance was the Fund’s exposure to TIPS and Emerging Market Equities.
The Fund utilized swaps to effect long exposure to Convertible Bond returns and International Equity returns and short exposure to several asset classes, including, among others, Domestic and International Equity returns, Currency returns, and Corporate Bond returns. The Fund utilized futures contracts to effect short exposure to Emerging Markets Equity returns and Currency returns. The use of swaps had a materially positive impact on performance, while the use of futures had a slightly negative impact on performance.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Hedge Market Neutral Tracker ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Hedge Market Neutral Tracker ETF Market Price2 | 0.90 | % | 2.62 | % | 4.15 | % | ||||||
IQ Hedge Market Neutral Tracker ETF NAV | 1.17 | % | 2.72 | % | 4.31 | % | ||||||
IQ Hedge Market Neutral Index | 2.02 | % | 3.52 | % | 5.59 | % | ||||||
HFRI Equity Market Neutral Index3 | 8.84 | % | 10.51 | % | 17.02 | % | ||||||
Barclays Capital Short Term Treasury Bond Index | 0.13 | % | 0.15 | % | 0.24 | % |
1 | Fund Inception Date: 10/4/2012. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
3 | Data shown above for the HFRI Fund of Funds Composite Index is from 9/30/2012 to 4/30/2014. |
10 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (10/4/2012) to the first day of secondary market trading in shares of the Fund (10/5/2012), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.91%, which includes a management fee of 0.75%, acquired fund fees and expenses of 0.15% and other expenses 0.01%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The HFRI Equity Market Neutral Index is an equally weighted hedge fund index including domestic and off-shore equity market neutral hedge funds.
The Barclays Capital U.S. Short Treasury Bond Index (the “Barclays Capital Short Term Treasury Bond Index”) measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of between 1 and 12 months.
The Fund is non-diversified and may be susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The Fund is not suitable for all investors. The Fund does not invest in hedge funds.
There is no guarantee that the Fund itself, or each of the ETFs in the Fund’s portfolio, will perform exactly as its underlying index. The Fund’s investment performance depends on the investment performance of the underlying ETFs in which it invests. The Fund’s underlying ETFs invest in: foreign securities, which subject them to risk of loss not typically associated with domestic markets, such as currency fluctuations and political uncertainty; commodities markets, which subject them to greater volatility than investments in traditional securities, such as stocks and bonds; and fixed income securities, which subject them to credit risk, the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt, and interest rate risk, changes in the value of a fixed income security resulting from changes in interest rates. Leverage, including borrowing, will cause some of the Fund’s underlying ETFs to be more volatile than if the underlying ETFs had not been leveraged.
11 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Real Return ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Real Return Index, which seeks to provide investors with a hedge against the U.S. inflation rate by providing a “real return” or a return above the rate of inflation, as represented by the Consumer Price Index, a leading government measure of inflation in the U.S. economy.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned -0.54% versus 0.13% for the Barclays Capital Short Term Treasury Bond Index.
The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in ETFs, to U.S. Large Cap Equities. The primary drivers of negative performance were the Fund’s exposure to Gold and both medium and longer duration Government Bonds.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Real Return ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Real Return ETF Market Price2 | –0.54 | % | 1.23 | % | 5.69 | % | ||||||
IQ Real Return ETF NAV | –0.54 | % | 1.24 | % | 5.73 | % | ||||||
IQ Real Return Index | –0.12 | % | 1.77 | % | 8.22 | % | ||||||
Barclays Capital Short Term Bond Index | 0.13 | % | 0.20 | % | 0.89 | % |
1 | Fund Inception Date: 10/26/2009. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
12 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (10/26/2009) to the first day of secondary market trading in shares of the Fund (10/27/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.68%, which includes a management fee of 0.48% and acquired fund fees and other expenses of 0.20%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The Barclays Capital U.S. Short Treasury Bond Index (the “Barclays Capital Short Term Treasury Bond Index”) measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of between 1 and 12 months.
The Fund is non-diversified and may be susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The Fund is not suitable for all investors.
There is no guarantee that the Fund itself, or each of the ETFs in the Fund’s portfolio, will perform exactly as its underlying index. The Fund’s investment performance depends on the investment performance of the underlying ETFs in which it invests. The Fund’s underlying ETFs invest in: foreign securities, which subject them to risk of loss not typically associated with domestic markets, such as currency fluctuations and political uncertainty; commodities markets, which subject them to greater volatility than investments in traditional securities, such as stocks and bonds; and fixed income securities, which subject them to credit risk, the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt, and interest rate risk, changes in the value of a fixed income security resulting from changes in interest rates.
13 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Global Resources ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Global Resources Index, which seeks to identify investment opportunities in the global resources market segment based on momentum and valuation factors.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 3.78% versus 17.23% and 3.17% for the MSCI World Index and the Dow Jones – UBS Commodity Index, respectively.
The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in Equities, to the Grains, Food & Fiber, Livestock, Industrial Metals, Water, and Energy sectors. The primary drivers of negative performance were the Fund’s exposure to Precious Metals stocks. The Fund’s short futures contract positions on both the S&P 500 and the EAFE indices also materially detracted from performance.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Global Resources ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Global Resources ETF Market Price2 | 4.52 | % | 4.80 | % | 23.55 | % | ||||||
IQ Global Resources ETF NAV | 3.78 | % | 4.79 | % | 23.48 | % | ||||||
IQ Global Resources Index | 3.27 | % | 5.50 | % | 27.30 | % | ||||||
MSCI World Index | 17.23 | % | 12.04 | % | 67.06 | % | ||||||
Dow Jones-UBS Commodity Index | 3.17 | % | 0.51 | % | 2.34 | % |
1 | Fund Inception Date: 10/26/2009. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
14 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (10/26/2009) to the first day of secondary market trading in shares of the Fund (10/27/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.77%, which includes a management fee of 0.75%, acquired fund fees and expenses of 0.01% and other expenses of 0.01%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).
The Dow Jones-UBS Commodity Index is composed of futures contracts on physical commodities traded on U.S. exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange.
As the Fund’s investments are concentrated in the global resources sector, the value of its shares will be affected by factors specific to that sector and generally will fluctuate more widely than that of a fund which invests in a broad range of industries. The Fund is susceptible to foreign securities risk. Since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets. Loss may result because of less foreign government regulation, less public information, less economic, political and social stability, or other factors. The Fund is exposed to mid and small capitalization companies risk. Stock prices of mid and small capitalization companies generally are more volatile than those of larger companies and also are more vulnerable than those of large capitalization companies to adverse business and economic developments. Since the Fund may invest directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, the Fund is subject to the risk that those currencies will decline in value relative to the U.S. that the U.S. dollar will decline in value relative to the currency being hedged. The ETF should be considered a speculative investment with a high degree of risk, does not represent a complete investment program and is not suitable for all investors.
15 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Merger Arbitrage ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Merger Arbitrage Index, which seeks to identify investment opportunities in the acquisition and merger market segment globally.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 6.88% versus 17.23% and 20.44% for the MSCI World Index and the S&P 500 Index, respectively.
The principal positive contributors to Fund performance for the period were the Fund’s positions in Clearwater Corporation, US Airways, Texas Industries, Cole Real Estate, and Omnicom Group. The primary drivers of negative performance were the Fund’s positions in Cooper Tire, Graincorp, Forest Laboratories, and BlackBerry. The Fund’s short futures contract positions on both the S&P 500 and the EAFE indices also detracted from performance.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Merger Arbitrage ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Merger Arbitrage ETF Market Price2 | 8.18 | % | 2.53 | % | 11.78 | % | ||||||
IQ Merger Arbitrage ETF NAV | 6.88 | % | 2.39 | % | 11.11 | % | ||||||
IQ Merger Arbitrage Index | 7.83 | % | 3.33 | % | 15.72 | % | ||||||
MSCI World Index | 17.23 | % | 11.40 | % | 61.73 | % | ||||||
S&P 500 | 20.44 | % | 15.02 | % | 86.50 | % |
1 | Fund Inception Date: 11/16/2009. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
16 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (11/16/2009) to the first day of secondary market trading in shares of the Fund (11/17/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.77%, which includes a management fee of 0.75%, acquired fund fees and expenses of 0.01%, and other expenses of 0.01%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The MSCI World Index is a free-float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed market (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).
The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is designed to represent the equity market in general (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).
Certain of the proposed takeover transactions in which the Fund invests may be renegotiated, terminated or involve a longer time frame than originally contemplated, which may negatively impact the Fund’s returns. The Fund’s investment strategy may result in high portfolio turnover, which, in turn, may result in increased transaction costs to the Fund and lower total returns. The Fund is susceptible to foreign securities risk — since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets, including currency transaction risk. Diversification does not eliminate the risk of experiencing investment losses. Stock prices of mid and small capitalization companies generally are more volatile than those of larger companies and also more vulnerable than those of larger capitalization companies to adverse economic developments.
The ETF should be considered a speculative investment with a high degree of risk, does not represent a complete investment program and is not suitable for all investors.
17 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Australia Small Cap ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Australia Small Cap Index, which seeks to provide investors with a means of tracking the overall performance of small cap Australian companies.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned -6.32% versus 13.80% for the MSCI EAFE Index.
The principal positive contributor to Fund performance for the period was the Fund’s allocation to Equities in the Financials sector. Telecommunications and Utility stocks also contributed positively.
The primary drivers of negative performance were the Fund’s allocations to the Materials, Health Care, and Industrial sectors.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Australia Small Cap ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Australia Small Cap ETF Market Price2 | –5.50 | % | –1.56 | % | –6.25 | % | ||||||
IQ Australia Small Cap ETF NAV | –6.32 | % | –1.60 | % | –6.41 | % | ||||||
IQ Australia Small Cap Index | –5.46 | % | –0.80 | % | –3.26 | % | ||||||
MSCI EAFE Index | 13.80 | % | 8.95 | % | 42.23 | % |
1 | Fund Inception Date: 3/22/2010. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
18 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (3/22/2010) to the first day of secondary market trading in shares of the Fund (3/23/2010), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.69%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
As the Fund’s investments are concentrated in Australia, the value of its shares will be affected by factors specific to Australia and may fluctuate more widely than that of a fund which invests in a more diversified manner. Any negative changes in the agricultural or mining industries could have an adverse impact on the Australian economy. The Australian economy is heavily dependent upon trading with its key partners, including the U.S., Asia and Europe. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. The Fund is susceptible to foreign securities risk — since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets. The Fund is concentrated in small capitalization companies, whose stock prices generally are more volatile than those of larger companies and also are more vulnerable than those of large capitalization companies to adverse business and economic developments. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. The Fund is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s Shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk and the Fund does not represent a complete investment program.
19 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Canada Small Cap ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Canada Small Cap Index, which seeks to provide investors with a means of tracking the overall performance of small cap Canadian companies.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 13.32% versus 13.80% for the MSCI EAFE Index.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to Equities in the Energy, Industrial, and Financial sectors. The primary driver of negative performance was the Fund’s allocation to Materials stocks.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Canada Small Cap ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Canada Small Cap ETF Market Price2 | 13.64 | % | 0.63 | % | 2.60 | % | ||||||
IQ Canada Small Cap ETF NAV | 13.32 | % | 0.71 | % | 2.95 | % | ||||||
IQ Canada Small Cap Index | 14.95 | % | 1.74 | % | 7.35 | % | ||||||
MSCI EAFE Index | 13.80 | % | 8.95 | % | 42.23 | % |
1 | Fund Inception Date: 3/22/2010. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
20 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (3/22/2010) to the first day of secondary market trading in shares of the Fund (3/23/2010), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.70%, which includes a management fee of 0.69% and other expenses of 0.01%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
As the Fund’s investments are concentrated in Canada, the value of its shares will be affected by factors specific to Canada and may fluctuate more widely than that of a fund which invests in a broad range of countries. Any negative changes in the agricultural or mining industries could have an adverse impact on the Canadian economy. The Canadian economy is heavily dependent upon trading with its key partners. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. The Fund is susceptible to foreign securities risk. Since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets. The Fund is concentrated in small capitalization companies, whose stock prices generally are more volatile than those of larger companies and also are more vulnerable than those of large capitalization companies to adverse business and economic developments. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. The Fund is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s Shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk and the Fund does not represent a complete investment program.
21 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Global Agribusiness Small Cap ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Global Agribusiness Small Cap Index. The IQ Global Agribusiness Small Cap Index is float-adjusted market cap-weighted and includes global small cap companies engaged in the agribusiness sector, including crop production and farming, livestock operations, agricultural machinery, agricultural supplies and logistics, agricultural chemicals, and biofuels.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 3.50%.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to Equities in the Livestock Operations, Crop Production and Farming, and Agricultural Chemicals sectors.
The primary drivers of negative performance were the Fund’s allocations to the Biofuel and Agricultural Supplies and Logistics sectors.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Global Agribusiness Small Cap ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Global Agribusiness Small Cap ETF Market Price2 | 3.51 | % | 3.10 | % | 9.95 | % | ||||||
IQ Global Agribusiness Small Cap ETF NAV | 3.50 | % | 3.16 | % | 10.16 | % | ||||||
IQ Global Agribusiness Small Cap Index | 4.31 | % | 3.64 | % | 11.78 | % |
1 | Fund Inception Date: 3/21/2011. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
22 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (3/21/2011) to the first day of secondary market trading in shares of the Fund (3/22/2011), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.75%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
As the Fund’s investments are concentrated in the Agribusiness sector, adverse weather conditions, economic forces and government policy and regulation could adversely affect the Fund’s portfolio companies and, thus, the Fund’s financial situation and performance. The Fund is susceptible to foreign securities risk. Since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets. The Fund is concentrated in small capitalization companies, whose stock prices generally are more volatile than those of larger companies and also are more vulnerable than those of large capitalization companies to adverse business and economic developments. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. The Fund is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk and the Fund does not represent a complete investment program.
23 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Global Oil Small Cap ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Global Oil Small Cap Index. The IQ Global Oil Small Cap Index is float-adjusted market cap-weighted and includes global small cap companies engaged primarily in the oil sector, including exploration and production, refining and marketing, and equipment, services and drilling.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 18.44%.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to Equities in the Refining and Marketing, Equipment, Services and Drilling and Exploration and Production sectors. Although some individual holdings within these sectors declined all sectors of the Fund were up.
Hypothetical Growth of a $10,000 Investment
Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ Global Oil Small Cap ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ Global Oil Small Cap ETF Market Price2 | 19.31 | % | �� | 6.18 | % | 19.64 | % | |||||
IQ Global Oil Small Cap ETF NAV | 18.44 | % | 6.37 | % | 20.28 | % | ||||||
IQ Global Oil Small Cap Index | 20.09 | % | 7.57 | % | 24.40 | % |
1 | Fund Inception Date: 5/4/2011. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
24 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (5/4/2011) to the first day of secondary market trading in shares of the Fund (5/5/2011), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.76%, which includes a management fee of 0.75% and other expenses of 0.01%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
As the Fund’s investments are concentrated in the Oil sector, the uncertainty and risks associated with oil exploration, economic forces and government policy and regulation could adversely affect the Fund’s portfolio companies and, thus, the Fund’s financial situation and performance. The Fund is susceptible to foreign securities risk. Since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets. The Fund is concentrated in small capitalization companies, whose stock prices generally are more volatile than those of larger companies and also are more vulnerable than those of large capitalization companies to adverse business and economic developments. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. The Fund is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk and the Fund does not represent a complete investment program.
25 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ U.S. Real Estate Small Cap ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ U.S. Real Estate Small Cap Index. The IQ U.S. Real Estate Small Cap Index is float-adjusted market cap-weighted and includes U.S. small cap companies engaged primarily in the real estate sector, including Real Estate Investment Trusts (“REITs”) or real estate holding companies.
For the 12-month period ended April 30, 2014, the Fund (NAV) returned 1.65% versus -0.59% for the Dow Jones U.S. Real Estate Index.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to Equities in the Hotel REIT, Diversified REIT, and Mortgage REIT sectors.
The primary driver for negative performance was the Fund’s exposure to the Residential REIT and Retail REIT sectors.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2014)
This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.
Fund Performance History
IQ U.S. Real Estate Small Cap ETF
(as of April 30, 2014)
1 Year | Since Inception1 | |||||||||||
Average Annual | Average Annual | Cumulative | ||||||||||
IQ U.S. Real Estate Small Cap ETF Market Price2 | 1.80 | % | 14.62 | % | 48.19 | % | ||||||
IQ U.S. Real Estate Small Cap ETF NAV | 1.65 | % | 15.31 | % | 50.75 | % | ||||||
IQ U.S. Real Estate Small Cap Index | 2.12 | % | 16.13 | % | 53.90 | % | ||||||
Dow Jones U.S. Real Estate Index | –0.59 | % | 11.16 | % | 35.65 | % |
1 | Fund Inception Date: 6/13/2011. |
2 | The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times. |
26 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (6/13/2011) to the first day of secondary market trading in shares of the Fund (6/14/2011), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and value of the Fund shares will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio was 0.69%. This expense information is consistent with the current Fund prospectus, dated August 30, 2013.
Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.
The Dow Jones U.S. Real Estate Index measures the stock performance of REITs and real estate operating companies in the U.S.
As the Fund’s investments are concentrated in the real estate sector, it is exposed to concentration risk, interest rate risk, leverage risk, property risk and management risk. The Fund is concentrated in small capitalization companies, whose stock prices generally are more volatile than those of larger companies. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund. The Fund is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk and the Fund does not represent a complete investment program.
27 |
Fund Expenses (unaudited) |
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information together with the amount you invested, in a particular Fund, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid for Period 11/01/13 to 04/30/14” to estimate the expenses you paid on your account during this period. Each Fund will indirectly bear its pro rata share of the expenses incurred by the underlying ETF investments in which each Fund invests. These expenses are not included in the table.
Hypothetical Example for Comparison Purposes
The second line of the table below also provides information about hypothetical account values and hypothetical expenses based on each Funds’ actual expense ratio and an assumed annual rate of return of 5% before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The Funds will indirectly bear their pro rata share of the expenses incurred by the underlying ETF investments in which the Funds invest. These expenses are not included in the table.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
28 |
Fund Expenses (unaudited) (continued)
Beginning Account Value | Ending Account Value 04/30/14 | Annualized Expense Ratios for the Period 11/01/13 to 04/30/14 | Expenses* Paid for Period 11/01/13 to 04/30/14 | ||||
IQ Hedge Multi-Strategy Tracker ETF | |||||||
Actual | $1,000.00 | $1,023.50 | 0.75% | $3.76 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.08 | 0.75% | $3.76 | |||
IQ Hedge Macro Tracker ETF | |||||||
Actual | $1,000.00 | $1,003.70 | 0.75% | $3.73 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.08 | 0.75% | $3.76 | |||
IQ Hedge Market Neutral Tracker ETF1 | |||||||
Actual | $1,000.00 | $1,013.30 | 0.76% | $3.79 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.03 | 0.76% | $3.81 | |||
IQ Real Return ETF | |||||||
Actual | $1,000.00 | $1,009.50 | 0.49% | $2.44 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.36 | 0.49% | $2.46 | |||
IQ Global Resources ETF | |||||||
Actual | $1,000.00 | $1,016.40 | 0.75% | $3.75 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.08 | 0.75% | $3.76 | |||
IQ Merger Arbitrage ETF | |||||||
Actual | $1,000.00 | $1,023.20 | 0.75% | $3.76 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.08 | 0.75% | $3.76 | |||
IQ Australia Small Cap ETF | |||||||
Actual | $1,000.00 | $ 983.30 | 0.69% | $3.39 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.37 | 0.69% | $3.46 | |||
IQ Canada Small Cap ETF | |||||||
Actual | $1,000.00 | $1,083.90 | 0.69% | $3.57 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.37 | 0.69% | $3.46 | |||
IQ Global Agribusiness Small Cap ETF | |||||||
Actual | $1,000.00 | $ 980.50 | 0.76% | $3.73 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.03 | 0.76% | $3.81 | |||
IQ Global Oil Small Cap ETF | |||||||
Actual | $1,000.00 | $1,092.90 | 0.76% | $3.94 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.03 | 0.76% | $3.81 | |||
IQ U.S. Real Estate Small Cap ETF | |||||||
Actual | $1,000.00 | $1,079.40 | 0.69% | $3.56 | |||
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.37 | 0.69% | $3.46 |
* | Expenses are calculated using the Fund’s annualized expense ratio, multiplied by the average account value for the period, multiplied by 181/365 (to reflect the six-month period). |
29 |
Portfolio Summaries (unaudited) |
April 30, 2014 |
SCHEDULES OF INVESTMENTS SUMMARY TABLE | ||||
IQ Hedge Multi-Strategy Tracker ETF | ||||
Net Assets ($mil): $722.8 | ||||
Industry | % of Net Assets | |||
Aggregate Bond Funds | 22.7 | % | ||
U.S. Large Cap Equity Funds | 22.7 | |||
Short-Term Treasury Bond Funds | 18.5 | |||
Money Market Fund | 14.6 | |||
Corporate Bond Funds | 10.6 | |||
Equity Funds | 9.3 | |||
U.S. Small Cap Equity Funds | 7.3 | |||
Real Estate Funds | 2.5 | |||
International Bond Funds | 1.8 | |||
Senior Loan Fund | 0.7 | |||
Currency Funds | 0.7 | |||
Commodity Fund | 0.0 | 1 | ||
Total Investments | 111.4 | |||
Liabilities in Excess of Other Assets | (11.4 | ) | ||
Total Net Assets | 100.0 | % | ||
1 Less than 0.05%. | ||||
IQ Hedge Macro Tracker ETF | ||||
Net Assets ($mil): $26.5 | ||||
Industry | % of Net Assets | |||
Short-Term Treasury Bond Funds | 36.6 | % | ||
Money Market Fund | 33.1 | |||
Corporate Bond Funds | 12.8 | |||
Emerging Equity Funds | 12.0 | |||
U.S. Small Cap Equity Fund | 10.0 | |||
Currency Harvest Fund | 9.1 | |||
Debt Fund | 8.5 | |||
Currency Fund | 7.5 | |||
Commodity Funds | 2.5 | |||
Total Investments | 132.1 | |||
Liabilities in Excess of Other Assets | (32.1 | ) | ||
Total Net Assets | 100.0 | % |
IQ Hedge Market Neutral Tracker ETF | ||||
Net Assets ($mil): $16.7 | ||||
Industry | % of Net Assets | |||
Short-Term Treasury Bond Funds | 46.5 | % | ||
Aggregate Bond Funds | 33.6 | |||
U.S. Large Cap Equity Funds | 10.7 | |||
Money Market Fund | 3.6 | |||
Equity Fund | 1.9 | |||
Emerging Equity Funds | 1.7 | |||
Corporate Bond Funds | 1.3 | |||
U.S. Small Cap Equity Fund | 0.7 | |||
Currency Harvest Fund | 0.1 | |||
Total Investments | 100.1 | |||
Liabilities in Excess of Other Assets | (0.1 | ) | ||
Total Net Assets | 100.0 | % | ||
IQ Real Return ETF | ||||
Net Assets ($mil): $26.3 | ||||
Industry | % of Net Assets | |||
Short-Term Treasury Bond Funds | 62.1 | % | ||
Money Market Fund | 18.2 | |||
U.S. Large Cap Equity Funds | 10.2 | |||
Real Estate Funds | 9.6 | |||
Intermediate-Term Treasury Bond Funds | 7.4 | |||
U.S. Small Cap Equity Fund | 5.6 | |||
Long-Term Bond Fund | 2.5 | |||
Currency Funds | 2.1 | |||
Total Investments | 117.7 | |||
Liabilities in Excess of Other Assets | (17.7 | ) | ||
Total Net Assets | 100.0 | % | ||
IQ Global Resources ETF | ||||
Net Assets ($mil): $84.7 | ||||
Industry | % of Net Assets | |||
Precious Metals | 20.5 | % | ||
Grains Food Fiber | 19.0 | |||
Timber | 14.7 | |||
Industrial Metals | 14.5 | |||
Money Market Fund | 12.9 | |||
Water | 11.0 | |||
Coal | 4.2 | |||
Livestock | 4.2 | |||
Energy | 2.4 | |||
Total Investments | 103.4 | |||
Liabilities in Excess of Other Assets | (3.4 | ) | ||
Total Net Assets | 100.0 | % |
See notes to financial statements.
30 |
Portfolio Summaries (unaudited) (continued) |
April 30, 2014 |
IQ Merger Arbitrage ETF | ||||
Net Assets ($mil): $33.9 | ||||
Industry | % of Net Assets | |||
Money Market Fund | 25.7 | % | ||
Consumer Staples | 12.9 | |||
Technology | 12.3 | |||
Health Care | 10.5 | |||
Capital Goods | 9.0 | |||
Communication Services | 7.2 | |||
Basic Materials | 7.0 | |||
Energy | 4.8 | |||
Financials | 4.0 | |||
Consumer Cyclicals | 3.1 | |||
Utilities | 2.5 | |||
Total Investments | 99.0 | |||
Other Assets in Excess of Liabilities | 1.0 | |||
Total Net Assets | 100.0 | % | ||
IQ Australia Small Cap ETF | ||||
Net Assets ($mil): $8.6 | ||||
Industry | % of Net Assets | |||
Consumer Discretionary | 24.2 | % | ||
Materials | 23.5 | |||
Industrials | 15.5 | |||
Financials | 10.0 | |||
Money Market Fund | 8.4 | |||
Energy | 7.8 | |||
Health Care | 7.4 | |||
Utilities | 3.0 | |||
Consumer Staples | 2.9 | |||
Information Technology | 2.7 | |||
Telecommunication Services | 1.9 | |||
Total Investments | 107.3 | |||
Liabilities in Excess of Other Assets | (7.3 | ) | ||
Total Net Assets | 100.0 | % | ||
IQ Canada Small Cap ETF | ||||
Net Assets ($mil): $16.7 | ||||
Industry | % of Net Assets | |||
Energy | 39.3 | % | ||
Materials | 30.0 | |||
Industrials | 12.2 | |||
Money Market Fund | 8.6 | |||
Utilities | 4.3 | |||
Consumer Discretionary | 3.2 | |||
Financials | 2.8 | |||
Consumer Staples | 2.6 | |||
Information Technology | 2.2 | |||
Telecommunication Services | 1.7 | |||
Health Care | 0.8 | |||
Total Investments | 107.7 | |||
Liabilities in Excess of Other Assets | (7.7 | ) | ||
Total Net Assets | 100.0 | % |
IQ Global Agribusiness Small Cap ETF | ||||
Net Assets ($mil): $25.6 | ||||
Industry | % of Net Assets | |||
Crop Production and Farming | 50.3 | % | ||
Livestock Operations | 17.2 | |||
Agricultural Chemicals | 10.8 | |||
Money Market Fund | 10.5 | |||
Agricultural Supplies and Logistics | 10.1 | |||
Agricultural Machinery | 9.5 | |||
Biofuels | 1.5 | |||
Total Investments | 109.9 | |||
Liabilities in Excess of Other Assets | (9.9 | ) | ||
Total Net Assets | 100.0 | % | ||
IQ Global Oil Small Cap ETF | ||||
Net Assets ($mil): $2.3 | ||||
Industry | % of Net Assets | |||
Exploration & Production | 39.8 | % | ||
Refining & Marketing | 30.8 | |||
Energy | 15.3 | |||
Equipment, Services & Drilling | 13.7 | |||
Money Market Fund | 7.7 | |||
Total Investments | 107.3 | |||
Liabilities in Excess of Other Assets | (7.3 | ) | ||
Total Net Assets | 100.0 | % | ||
IQ U.S. Real Estate Small Cap ETF | ||||
Net Assets ($mil): $52.1 | ||||
Industry | % of Net Assets | |||
Mortgage REITs | 23.4 | % | ||
Office REITs | 17.0 | |||
Specialized REITs | 15.2 | |||
Diversified REITs | 13.8 | |||
Hotel REITs | 13.7 | |||
Retail REITs | 11.8 | |||
Residential REITs | 4.5 | |||
Money Market Fund | 4.1 | |||
Total Investments | 103.5 | |||
Liabilities in Excess of Other Assets | (3.5 | ) | ||
Total Net Assets | 100.0 | % |
See notes to financial statements.
31 |
Schedules of Investments — IQ Hedge Multi-Strategy Tracker ETF |
April 30, 2014 |
Shares | Value | |||||||
Investment Companies — 96.8% | ||||||||
Aggregate Bond Funds — 22.7% | ||||||||
iShares Core Total US Bond Market ETF | 675,246 | $ | 73,324,963 | |||||
SPDR Barclays Aggregate Bond ETF(b) | 55,386 | 3,184,141 | ||||||
Vanguard Total Bond Market ETF(a)(b) | 1,073,701 | 87,667,687 | ||||||
Total Aggregate Bond Funds | 164,176,791 | |||||||
Commodity Fund — 0.0%(c) | ||||||||
PowerShares DB Gold Fund* | 71 | 3,068 | ||||||
Corporate Bond Funds — 10.6% | ||||||||
iShares Credit Bond ETF | 5,710 | 631,012 | ||||||
iShares iBoxx $ Investment Grade | ||||||||
Corporate Bond ETF(b) | 114,593 | 13,539,163 | ||||||
PowerShares Senior Loan Portfolio(b) | 2,527,738 | 62,536,238 | ||||||
Total Corporate Bond Funds | 76,706,413 | |||||||
Currency Funds — 0.7% | ||||||||
CurrencyShares Japanese Yen Trust*(b) | 16,218 | 1,547,846 | ||||||
WisdomTree Emerging Currency | ||||||||
Strategy Fund*(b) | 179,517 | 3,629,834 | ||||||
Total Currency Funds | 5,177,680 | |||||||
Equity Funds — 9.3% | ||||||||
iShares Europe ETF(b) | 150,943 | 7,486,773 | ||||||
iShares MSCI EMU ETF(b) | 544,510 | 23,441,155 | ||||||
Vanguard FTSE Europe ETF | 600,309 | 36,324,698 | ||||||
Total Equity Funds | 67,252,626 | |||||||
International Bond Funds — 1.8% | ||||||||
iShares J.P. Morgan USD Emerging | ||||||||
Markets Bond ETF(b) | 77,464 | 8,689,137 | ||||||
PowerShares Emerging Markets | ||||||||
Sovereign Debt Portfolio(b) | 151,720 | 4,287,607 | ||||||
Total International Bond Funds | 12,976,744 | |||||||
Real Estate Funds — 2.5% | ||||||||
iShares U.S. Real Estate ETF(b) | 26,111 | 1,819,414 | ||||||
SPDR Dow Jones International Real | ||||||||
Estate ETF(b) | 155,224 | 6,629,617 | ||||||
SPDR Dow Jones REIT ETF | 11,710 | 947,690 | ||||||
Vanguard REIT ETF | 114,597 | 8,358,705 | ||||||
Total Real Estate Funds | 17,755,426 | |||||||
Senior Loan Fund — 0.7% | ||||||||
SPDR Blackstone / GSO Senior | ||||||||
Loan ETF | 104,228 | 5,193,681 | ||||||
Short-Term Treasury Bond Funds — 18.5% | ||||||||
iShares 1-3 Year Treasury Bond ETF(b) | 494,124 | 41,763,361 | ||||||
iShares Short Treasury Bond ETF(a) | 101,374 | 11,178,511 | ||||||
SPDR Barclays 1-3 Month T-Bill ETF*(b) | 112,516 | 5,149,857 | ||||||
Vanguard Short-Term Bond ETF(b) | 946,266 | 75,890,533 | ||||||
Total Short-Term Treasury Bond Funds | 133,982,262 |
Shares | Value | |||||||
Investment Companies (continued) | ||||||||
U.S. Large Cap Equity Funds — 22.7% | ||||||||
iShares Russell 1000 Growth ETF(a) | 702,790 | $ | 60,861,614 | |||||
iShares Russell 1000 Value ETF(a) | 115,549 | 11,252,162 | ||||||
iShares S&P 500 Growth ETF(b) | 262,222 | 26,222,200 | ||||||
iShares S&P 500 Value ETF(b) | 40,180 | 3,533,027 | ||||||
SPDR S&P 500 ETF Trust(a)(b) | 93,213 | 17,564,126 | ||||||
Vanguard Growth ETF(b) | 400,524 | 37,457,005 | ||||||
Vanguard Value ETF | 86,771 | 6,835,819 | ||||||
Total U.S. Large Cap Equity Funds | 163,725,953 | |||||||
U.S. Small Cap Equity Funds — 7.3% | ||||||||
iShares Russell 2000 Growth ETF(b) | 197,392 | 25,481,333 | ||||||
iShares S&P Small-Cap 600 Growth ETF | 101,422 | 11,647,303 | ||||||
Vanguard Small-Cap Growth ETF(b) | 132,126 | 15,795,663 | ||||||
Total U.S. Small Cap Equity Funds | 52,924,299 | |||||||
Total Investment Companies — 96.8% | ||||||||
(Cost $692,854,906) | 699,874,943 | |||||||
Short-Term Investment — 0.5% | ||||||||
Money Market Fund — 0.5% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(d) | ||||||||
(Cost $3,635,274) | 3,635,274 | 3,635,274 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 14.1% | ||||||||
Money Market Fund — 14.1% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(e) | ||||||||
(Cost $101,789,915) | 101,789,915 | 101,789,915 | ||||||
Total Investments — 111.4% | ||||||||
(Cost $798,280,095) | $ | 805,300,132 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (11.4)%(f) | (82,456,496 | ) | ||||||
Net Assets — 100.0% | $ | 722,843,636 |
* | Non-income producing securities. |
(a) | All or portion of these securities have been segregated as collateral for swap contracts. The total value of securities segregated amounted to $115,500,729. |
(b) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $100,489,810; total market value of collateral held by the Fund was $102,393,555. Market value of the collateral held includes non-cash securities collateral having a value of $603,640. |
(c) | Less than 0.05%. |
(d) | Rate shown reflects the 7-day yield at April 30, 2014. |
(e) | Rate shown reflects the 1-day yield at April 30, 2014. |
(f) | Liabilities in Excess of Other Assets includes net unrealized appreciation (depreciation) on swap contracts. |
ETF — Exchange Traded Fund
REIT — Real Estate Investment Trust
See notes to financial statements.
32 |
Schedules of Investments — IQ Hedge Multi-Strategy Tracker ETF (continued) |
April 30, 2014 |
Total return swap contracts outstanding at April 30, 2014:
Total Return Benchmark | Annual Financing Rate Received (Paid) | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)1 | ||||||||||
CurrencyShares Euro Trust | (1.61 | )% | 5/19/2015 | $ | (26,442,840 | ) | $ | — | ||||||
iPath S&P 500 VIX Mid-Term Futures ETN | (2.73 | )% | 5/19/2015 | (4,617,096 | ) | — | ||||||||
iShares iBoxx $ High Yield Corporate Bond ETF | (1.98 | )% | 5/19/2015 | (3,156,428 | ) | — | ||||||||
iShares MSCI All Country Asia ex Japan ETF | (3.98 | )% | 5/19/2015 | (6,524,574 | ) | — | ||||||||
iShares MSCI EAFE ETF | (0.30 | )% | 5/19/2015 | (10,125,229 | ) | — | ||||||||
iShares MSCI Emerging Markets ETF | (0.48 | )% | 5/19/2015 | (1,906,098 | ) | — | ||||||||
iShares MSCI Pacific ex Japan ETF | (0.73 | )% | 5/19/2015 | (8,145,991 | ) | — | ||||||||
iShares Russell 2000 ETF | (0.63 | )% | 5/19/2015 | (28,831,603 | ) | — | ||||||||
iShares Russell 2000 Value ETF | (0.98 | )% | 5/19/2015 | (18,612,981 | ) | — | ||||||||
iShares S&P Small-Cap 600 Value ETF | (1.36 | )% | 5/19/2015 | (9,973,175 | ) | — | ||||||||
iShares Silver Trust | (0.36 | )% | 5/19/2015 | (1,844,523 | ) | — | ||||||||
PowerShares DB Commodity Index Tracking Fund | (0.36 | )% | 5/19/2015 | (3,844,847 | ) | — | ||||||||
PowerShares DB G10 Currency Harvest Fund | (1.98 | )% | 5/19/2015 | (13,082,534 | ) | — | ||||||||
SPDR Barclays Convertible Securities ETF | 1.10 | % | 5/19/2015 | 183,225,078 | — | |||||||||
SPDR Barclays High Yield Bond ETF | (0.86 | )% | 5/19/2015 | (2,422,697 | ) | — | ||||||||
Vanguard FTSE Developed Markets ETF | (0.48 | )% | 5/19/2015 | (3,783,993 | ) | — | ||||||||
Vanguard FTSE Emerging Markets ETF | (0.98 | )% | 5/19/2015 | (2,574,062 | ) | — | ||||||||
Vanguard FTSE Pacific ETF | (0.86 | )% | 5/19/2015 | (7,174,836 | ) | — | ||||||||
Vanguard Small-Cap Value ETF | (2.98 | )% | 5/19/2015 | (12,921,866 | ) | — | ||||||||
WisdomTree Emerging Currency Strategy Fund | 0.60 | % | 5/19/2015 | 7,369,199 | — | |||||||||
$ | — |
Cash posted has been segregated as collateral for swaps in the amount of $16,379,724 at April 30, 2014.
Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either received fees from, or pay fees to, the counterparty, depending upon the total return of the benchmark, and the agreed-upon financing rate.
1 | Reflects a reset date of April 30, 2014. |
See notes to financial statements.
33 |
Schedules of Investments — IQ Hedge Macro Tracker ETF |
April 30, 2014 |
Shares | Value | |||||||
Investment Companies — 99.0% | ||||||||
Commodity Funds — 2.5% | ||||||||
iShares Silver Trust*(a) | 4,723 | $ | 87,186 | |||||
PowerShares DB Commodity Index | ||||||||
Tracking Fund* | 21,490 | 567,551 | ||||||
Total Commodity Funds | 654,737 | |||||||
Corporate Bond Funds — 12.8% | ||||||||
iShares Credit Bond ETF | 2,243 | 247,874 | ||||||
iShares iBoxx $ Investment Grade | ||||||||
Corporate Bond ETF(a) | 26,574 | 3,139,718 | ||||||
Total Corporate Bond Funds | 3,387,592 | |||||||
Currency Fund — 7.5% | ||||||||
Market Vectors Emerging Markets | ||||||||
Local Currency Bond ETF(a) | 84,183 | 1,992,612 | ||||||
Currency Harvest Fund — 9.1% | ||||||||
CurrencyShares Euro Trust*(a)(b) | 17,689 | 2,422,332 | ||||||
Debt Fund — 8.5% | ||||||||
WisdomTree Emerging Markets Local | ||||||||
Debt Fund(a) | 48,865 | 2,248,279 | ||||||
Emerging Equity Funds — 12.0% | ||||||||
iShares MSCI Emerging Markets ETF | 14,219 | 587,671 | ||||||
SPDR S&P Emerging Markets | ||||||||
SmallCap ETF | 38,193 | 1,802,328 | ||||||
Vanguard FTSE Emerging | ||||||||
Markets ETF | 19,384 | 793,581 | ||||||
Total Emerging Equity Funds | 3,183,580 | |||||||
Short-Term Treasury Bond Funds — 36.6% | ||||||||
iShares 1-3 Year Treasury Bond ETF(a) | 35,812 | 3,026,830 | ||||||
iShares Short Treasury Bond ETF | 7,347 | 810,154 | ||||||
SPDR Barclays 1-3 Month T-Bill ETF* | 8,155 | 373,254 | ||||||
Vanguard Short-Term Bond ETF | 68,581 | 5,500,196 | ||||||
Total Short-Term Treasury Bond Funds | 9,710,434 |
Shares | Value | |||||||
Investment Companies (continued) | ||||||||
U.S. Small Cap Equity Fund — 10.0% | ||||||||
iShares Russell 2000 ETF(a) | 23,620 | $ | 2,644,968 | |||||
Total Investment Companies — 99.0% | ||||||||
(Cost $26,446,973) | 26,244,534 | |||||||
Short-Term Investment — 0.8% | ||||||||
Money Market Fund — 0.8% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(c) | ||||||||
(Cost $220,712) | 220,712 | 220,712 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 32.3% | ||||||||
Money Market Fund — 32.3% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(d) | ||||||||
(Cost $8,545,373) | 8,545,373 | 8,545,373 | ||||||
Total Investments — 132.1% | ||||||||
(Cost $35,213,058) | $ | 35,010,619 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (32.1)%(e) | (8,506,335 | ) | ||||||
Net Assets — 100.0% | $ | 26,504,284 |
* | Non-income producing securities. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $8,394,586; total market value of collateral held by the Fund was $8,545,373. |
(b) | All or portion of these securities have been segregated as collateral for swap contracts. The total value of securities segregated amounted to $911,883. |
(c) | Rate shown reflects the 7-day yield at April 30, 2014. |
(d) | Rate shown reflects the 1-day yield at April 30, 2014. |
(e) | Liabilities in Excess of Other Assets includes net unrealized appreciation (depreciation) on swap contracts. |
ETF — Exchange Traded Fund
Total return swap contracts outstanding at April 30, 2014:
Total Return Benchmark | Annual Financing Rate Received (Paid) | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)1 | ||||||||||
CurrencyShares Japanese Yen Trust | (1.74 | )% | 4/07/2016 | $ | (73,012 | ) | $ | — | ||||||
iShares U.S. Real Estate ETF | (0.74 | )% | 4/07/2016 | (108,283 | ) | — | ||||||||
iShares iBoxx $ Investment Grade Corporate Bond | 0.10 | % | 5/19/2015 | 2,183,176 | — | |||||||||
PowerShares DB G10 Currency Harvest Fund | (1.99 | )% | 4/07/2016 | (190,715 | ) | — | ||||||||
PowerShares DB Gold Fund | (0.99 | )% | 4/07/2016 | (173 | ) | — | ||||||||
ProShares VIX Mid-Term Futures ETF | 0.10 | % | 5/19/2015 | 231,417 | — | |||||||||
SPDR Dow Jones International Real Estate ETF | (2.99 | )% | 4/07/2016 | (1,232,440 | ) | — | ||||||||
SPDR Dow Jones REIT ETF | (0.99 | )% | 4/07/2016 | (56,408 | ) | — | ||||||||
Vanguard REIT ETF | (0.62 | )% | 4/07/2016 | (497,524 | ) | — | ||||||||
$ | — |
Cash posted has been segregated as collateral for swaps in the amount of $113,760 at April 30, 2014.
Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either receives fees from, or pay fees to, the counterparty, depending upon the total return of the benchmark, and the agreed-upon financing rate.
1 | Reflects a reset date of April 30, 2014. |
See notes to financial statements.
34 |
Schedules of Investments — IQ Hedge Market Neutral Tracker ETF | |
April 30, 2014 |
Shares | Value | |||||||
Investment Companies — 96.5% | ||||||||
Aggregate Bond Funds — 33.6% | ||||||||
iShares Core Total US Bond Market ETF(a) | 23,176 | $ | 2,516,682 | |||||
SPDR Barclays Aggregate Bond ETF | 1,901 | 109,288 | ||||||
Vanguard Total Bond Market ETF(a) | 36,852 | 3,008,966 | ||||||
Total Aggregate Bond Funds | 5,634,936 | |||||||
Corporate Bond Funds — 1.3% | ||||||||
iShares Credit Bond ETF | 85 | 9,393 | ||||||
iShares iBoxx $ Investment Grade | ||||||||
Corporate Bond ETF | 1,711 | 202,155 | ||||||
Total Corporate Bond Funds | 211,548 | |||||||
Currency Harvest Fund — 0.1% | ||||||||
CurrencyShares Euro Trust* | 82 | 11,229 | ||||||
Emerging Equity Funds — 1.7% | ||||||||
iShares MSCI Emerging Markets ETF | 3,000 | 123,990 | ||||||
Vanguard FTSE Emerging Markets ETF | 4,090 | 167,445 | ||||||
Total Emerging Equity Funds | 291,435 | |||||||
Equity Fund — 1.9% | ||||||||
iShares Europe ETF(b) | 6,324 | 313,670 | ||||||
Short-Term Treasury Bond Funds — 46.5% | ||||||||
iShares 1-3 Year Treasury Bond ETF | 28,702 | 2,425,893 | ||||||
iShares Short Treasury Bond ETF(a) | 5,888 | 649,270 | ||||||
SPDR Barclays 1-3 Month T-Bill ETF* | 6,536 | 299,153 | ||||||
Vanguard Short-Term Bond ETF | 54,966 | 4,408,273 | ||||||
Total Short-Term Treasury Bond Funds | 7,782,589 | |||||||
U.S. Large Cap Equity Funds — 10.7% | ||||||||
iShares Russell 1000 Growth ETF(a) | 5,689 | 492,667 | ||||||
iShares Russell 1000 Value ETF(a) | 4,153 | 404,419 | ||||||
iShares S&P 500 Growth ETF | 2,123 | 212,300 | ||||||
iShares S&P 500 Value ETF | 1,444 | 126,971 | ||||||
Vanguard Growth ETF | 3,242 | 303,192 | ||||||
Vanguard Value ETF | 3,119 | 245,715 | ||||||
Total U.S. Large Cap Equity Funds | 1,785,264 |
Shares | Value | |||||||
Investment Companies (continued) | ||||||||
U.S. Small Cap Equity Funds — 0.7% | ||||||||
iShares Russell 2000 Growth ETF(b) | 458 | $ | 59,124 | |||||
iShares S&P Small-Cap 600 Growth ETF | 235 | 26,987 | ||||||
Vanguard Small-Cap Growth ETF | 306 | 36,582 | ||||||
Total U.S. Small Cap Equity Fund | 122,693 | |||||||
Total Investment Companies — 96.5% | ||||||||
(Cost $16,190,750) | 16,153,364 | |||||||
Short-Term Investment — 1.6% | ||||||||
Money Market Fund — 1.6% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(c) | ||||||||
(Cost $275,759) | 275,759 | 275,759 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 2.0% | ||||||||
Money Market Fund — 2.0% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(d) | ||||||||
(Cost $338,015) | 338,015 | 338,015 | ||||||
Total Investments — 100.1% | ||||||||
(Cost $16,804,524) | $ | 16,767,138 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (0.1)%(e) | (18,838 | ) | ||||||
Net Assets — 100.0% | $ | 16,748,300 |
* | Non-income producing securities. |
(a) | All or portion of these securities have been segregated as collateral for swap contracts. The total value of securities segregated amounted to $3,964,312. |
(b) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $329,492; total market value of collateral held by the Fund was $338,015. |
(c) | Rate shown reflects the 7-day yield at April 30, 2014. |
(d) | Rate shown reflects the 1-day yield at April 30, 2014. |
(e) | Liabilities in Excess of Other Assets includes net unrealized appreciation (depreciation) on swap contracts. |
ETF — Exchange Traded Fund
Total return swap contracts outstanding at April 30, 2014:
Total Return Benchmark | Annual Financing Rate Received (Paid) | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation)1 | ||||||||||
iShares iBoxx $ High Yield Corporate Bond ETF | (0.74 | )% | 4/07/2016 | $ | (95,189 | ) | $ | — | ||||||
iShares MSCI All Country Asia ex Japan ETF | (3.99 | )% | 4/07/2016 | (260,838 | ) | — | ||||||||
iShares MSCI EAFE ETF | (0.30 | )% | 4/07/2016 | (900,594 | ) | — | ||||||||
iShares MSCI EMU ETF | 0.60 | % | 5/19/2015 | 982,186 | — | |||||||||
iShares MSCI Pacific ex Japan ETF | (0.74 | )% | 4/07/2016 | (325,628 | ) | — | ||||||||
iShares Russell 2000 Value ETF | (0.99 | )% | 4/07/2016 | (134,068 | ) | — | ||||||||
iShares S&P Small-Cap 600 Value ETF | (1.37 | )% | 4/07/2016 | (71,831 | ) | — | ||||||||
PowerShares DB G10 Currency Harvest Fund | (1.99 | )% | 4/07/2016 | (515,590 | ) | — | ||||||||
PowerShares Senior Loan Portfolio | (1.49 | )% | 4/07/2016 | (881,783 | ) | — | ||||||||
SPDR Barclays Convertible Securities ETF | 0.90 | % | 5/19/2015 | 2,175,234 | — | |||||||||
SPDR Barclays High Yield Bond ETF | (0.87 | )% | 4/07/2016 | (73,107 | ) | — | ||||||||
SPDR Blackstone / GSO Senior Loan ETF | (6.99 | )% | 4/07/2016 | (73,250 | ) | — | ||||||||
Vanguard FTSE Developed Markets ETF | (0.49 | )% | 4/07/2016 | (336,576 | ) | — | ||||||||
Vanguard FTSE Europe ETF | 0.60 | % | 5/19/2015 | 1,522,008 | — | |||||||||
Vanguard FTSE Pacific ETF | (0.87 | )% | 4/07/2016 | (286,816 | ) | — | ||||||||
Vanguard Small-Cap Value ETF | (2.99 | )% | 4/07/2016 | (93,132 | ) | — | ||||||||
$ | — |
Cash posted has been segregated as collateral for swaps in the amount of $207,654 at April 30, 2014.
Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either receives fees from, or pay fees to, the counterparty, depending upon the total return of the benchmark, and the agreed-upon financing rate.
1 | Reflects a reset date of April 30, 2014. |
See notes to financial statements.
35 |
Schedules of Investments — IQ Real Return ETF |
April 30, 2014 |
Shares | Value | |||||||
Investment Companies — 99.5% | ||||||||
Currency Fund — 2.1% | ||||||||
CurrencyShares Japanese Yen Trust*(a) | 5,817 | $ | 555,175 | |||||
Intermediate-Term Treasury Bond | ||||||||
Funds — 7.4% | ||||||||
iShares 3-7 Year Treasury Bond ETF(a) | 5,365 | 650,131 | ||||||
iShares 7-10 Year Treasury Bond ETF | 12,708 | 1,300,155 | ||||||
Total Intermediate-Term Treasury Bond | ||||||||
Funds | 1,950,286 | |||||||
Long-Term Bond Fund — 2.5% | ||||||||
iShares 20+ Year Treasury Bond ETF(a) | 5,892 | 654,601 | ||||||
Real Estate Funds — 9.6% | ||||||||
iShares U.S. Real Estate ETF(a) | 5,926 | 412,924 | ||||||
SPDR Dow Jones REIT ETF | 2,662 | 215,436 | ||||||
Vanguard REIT ETF | 25,996 | 1,896,148 | ||||||
Total Real Estate Funds | 2,524,508 | |||||||
Short-Term Treasury Bond Funds — 62.1% | ||||||||
iShares Short Treasury Bond ETF(a) | 101,592 | 11,202,550 | ||||||
SPDR Barclays 1-3 Month T-Bill ETF*(a) | 112,752 | 5,160,659 | ||||||
Total Short-Term Treasury Bond Funds | 16,363,209 | |||||||
U.S. Large Cap Equity Funds — 10.2% | ||||||||
iShares Core S&P 500 ETF | 41 | 7,771 | ||||||
SPDR S&P 500 ETF Trust(a) | 14,187 | 2,673,256 | ||||||
Total U.S. Large Cap Equity Funds | 2,681,027 | |||||||
U.S. Small Cap Equity Fund — 5.6% | ||||||||
iShares Russell 2000 ETF(a) | 13,094 | 1,466,266 | ||||||
Total Investment Companies — 99.5% | ||||||||
(Cost $25,804,390) | 26,195,072 |
Shares | Value | |||||||
Short-Term Investment — 0.5% | ||||||||
Money Market Fund — 0.5% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(b) | ||||||||
(Cost $142,636) | 142,636 | $ | 142,636 | |||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 17.7% | ||||||||
Money Market Fund — 17.7% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(c) | ||||||||
(Cost $4,646,248) | 4,646,248 | 4,646,248 | ||||||
Total Investments — 117.7% | ||||||||
(Cost $30,593,274) | $ | 30,983,956 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (17.7)% | (4,654,950 | ) | ||||||
Net Assets — 100.0% | $ | 26,329,006 |
* | Non-income producing securities. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $6,718,173; total market value of collateral held by the Fund was $6,843,167. Market value of the collateral held includes non-cash U.S. Treasury securities having a value of $2,196,919. |
(b) | Rate shown reflects the 7-day yield at April 30, 2014. |
(c) | Rate shown reflects the 1-day yield at April 30, 2014. |
ETF — Exchange Traded Fund
REIT — Real Estate Investment Trust
See notes to financial statements.
36 |
Schedules of Investments — IQ Global Resources ETF |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks — 90.5% | ||||||||
Australia — 7.7% | ||||||||
BHP Billiton Ltd. | 136,287 | $ | 4,766,944 | |||||
Fortescue Metals Group Ltd. | 79,739 | 373,105 | ||||||
Iluka Resources Ltd. | 10,695 | 88,095 | ||||||
Newcrest Mining Ltd.* | 105,426 | 1,021,758 | ||||||
Regis Resources Ltd. | 68,801 | 154,907 | ||||||
Whitehaven Coal Ltd.*(a) | 74,129 | 100,279 | ||||||
Woodside Petroleum Ltd. | 613 | 23,173 | ||||||
Total Australia | 6,528,261 | |||||||
Canada — 18.8% | ||||||||
Agnico Eagle Mines Ltd. | 23,986 | 707,483 | ||||||
Alamos Gold, Inc. | 17,519 | 163,625 | ||||||
B2Gold Corp.* | 93,051 | 267,083 | ||||||
Barrick Gold Corp. | 160,289 | 2,794,049 | ||||||
Canadian Natural Resources Ltd. | 806 | 32,800 | ||||||
Canfor Corp.* | 37,097 | 840,340 | ||||||
Centerra Gold, Inc. | 32,579 | 166,836 | ||||||
Detour Gold Corp.* | 21,600 | 214,730 | ||||||
Domtar Corp. ADR | 8,470 | 790,759 | ||||||
Eldorado Gold Corp. | 98,554 | 599,882 | ||||||
Enbridge, Inc. | 571 | 27,518 | ||||||
First Majestic Silver Corp.* | 16,100 | 152,572 | ||||||
Goldcorp, Inc. | 111,776 | 2,757,097 | ||||||
Husky Energy, Inc. | 719 | 23,468 | ||||||
IAMGOLD Corp. | 51,853 | 180,490 | ||||||
Imperial Oil Ltd. | 603 | 29,407 | ||||||
Kinross Gold Corp.* | 157,378 | 638,145 | ||||||
Lundin Mining Corp.* | 15,000 | 76,541 | ||||||
New Gold, Inc.* | 69,274 | 349,700 | ||||||
Norbord, Inc. | 14,200 | 347,414 | ||||||
Osisko Mining Corp.* | 60,551 | 433,118 | ||||||
Pan American Silver Corp. | 20,853 | 269,819 | ||||||
Resolute Forest Products* | 25,054 | 446,963 | ||||||
SEMAFO, Inc. | 37,862 | 141,450 | ||||||
Silver Wheaton Corp. | 49,190 | 1,089,625 | ||||||
Suncor Energy, Inc. | 1,053 | 40,568 | ||||||
Teck Resources Ltd., Class B | 14,723 | 335,123 | ||||||
TransCanada Corp. | 585 | 27,228 | ||||||
West Fraser Timber Co., Ltd. | 22,703 | 1,013,665 | ||||||
Westshore Terminals Investment Corp. | 5,373 | 174,392 | ||||||
Yamana Gold, Inc. | 103,719 | 775,920 | ||||||
Total Canada | 15,907,810 | |||||||
Finland — 2.9% | ||||||||
UPM-Kymmene OYJ(a) | 140,206 | 2,449,472 | ||||||
France — 2.4% | ||||||||
Suez Environnement Co. | 49,099 | 963,306 | ||||||
Total SA | 1,688 | 120,489 | ||||||
Veolia Environnement(a) | 51,581 | 961,223 | ||||||
Total France | 2,045,018 | |||||||
Germany — 0.2% | ||||||||
Suedzucker AG(a) | 9,372 | 199,599 | ||||||
Hong Kong — 1.8% | ||||||||
Beijing Enterprises Water Group Ltd.(a) | 835,283 | 530,075 | ||||||
China Modern Dairy Holdings Ltd.*(a) | 437,301 | 187,265 | ||||||
CNOOC Ltd. | 32,835 | 54,295 | ||||||
Lee & Man Paper Manufacturing Ltd. | 1,245,931 | 676,573 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Hong Kong (continued) | ||||||||
Shougang Fushan Resources | ||||||||
Group Ltd.(a) | 382,308 | $ | 114,897 | |||||
Total Hong Kong | 1,563,105 | |||||||
Ireland — 0.7% | ||||||||
Kerry Group PLC, Class A | 8,063 | 636,127 | ||||||
Italy — 0.1% | ||||||||
Eni SpA | 2,698 | 69,992 | ||||||
Japan — 2.4% | ||||||||
Ajinomoto Co., Inc. | 28,504 | 419,119 | ||||||
Itoham Foods, Inc. | 19,394 | 87,904 | ||||||
Mitsui & Co., Ltd. | 1,400 | 19,859 | ||||||
Nippon Meat Packers, Inc. | 18,304 | 317,341 | ||||||
Nippon Paper Industries Co., Ltd. | 30,697 | 560,750 | ||||||
Nisshin Seifun Group, Inc. | 12,545 | 146,021 | ||||||
Sumitomo Metal Mining Co., Ltd. | 13,782 | 207,911 | ||||||
Toyo Suisan Kaisha Ltd. | 4,556 | 145,846 | ||||||
Yamazaki Baking Co., Ltd. | 10,000 | 122,173 | ||||||
Total Japan | 2,026,924 | |||||||
Netherlands — 0.6% | ||||||||
Nutreco NV | 6,240 | 289,498 | ||||||
Royal Dutch Shell PLC, Class A | 4,746 | 187,842 | ||||||
Total Netherlands | 477,340 | |||||||
New Zealand — 1.8% | ||||||||
Fletcher Building Ltd. | 182,287 | 1,542,537 | ||||||
Norway — 0.4% | ||||||||
Norsk Hydro ASA | 52,199 | 278,781 | ||||||
Statoil ASA | 2,368 | 71,723 | ||||||
Total Norway | 350,504 | |||||||
Singapore — 1.8% | ||||||||
Golden Agri-Resources Ltd. | 589,596 | 286,497 | ||||||
Olam International Ltd. | 109,959 | 195,331 | ||||||
Sakari Resources Ltd.*(b)(c) | 240,456 | 216,410 | ||||||
Wilmar International Ltd. | 293,694 | 795,443 | ||||||
Total Singapore | 1,493,681 | |||||||
Spain — 0.2% | ||||||||
Ebro Foods SA | 7,133 | 164,178 | ||||||
Repsol SA | 971 | 26,119 | ||||||
Total Spain | 190,297 | |||||||
Sweden — 2.6% | ||||||||
Boliden AB(a) | 7,003 | 106,170 | ||||||
Holmen AB, B Shares(a) | 22,259 | 782,851 | ||||||
Sandvik AB* | 90,676 | 1,276,607 | ||||||
Total Sweden | 2,165,628 | |||||||
Switzerland — 2.7% | ||||||||
Barry Callebaut AG* | 252 | 342,030 | ||||||
Lindt & Spruengli AG | 104 | 505,560 | ||||||
Pentair Ltd. | 19,040 | 1,414,481 | ||||||
Total Switzerland | 2,262,071 |
See notes to financial statements.
37 |
Schedules of Investments — IQ Global Resources ETF (continued) |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
United Kingdom — 12.2% | ||||||||
African Barrick Gold Ltd. PLC | 56,433 | $ | 236,605 | |||||
Anglo American PLC | 35,703 | 953,729 | ||||||
Antofagasta PLC | 25,242 | 335,438 | ||||||
Associated British Foods PLC | 36,331 | 1,822,611 | ||||||
BG Group PLC | 2,540 | 51,381 | ||||||
BP PLC | 13,751 | 115,911 | ||||||
Cranswick PLC | 4,427 | 89,478 | ||||||
Hochschild Mining PLC | 50,531 | 140,785 | ||||||
Lonmin PLC* | 14,579 | 69,790 | ||||||
Pennon Group PLC | 35,291 | 451,399 | ||||||
Polymetal International PLC | 53,603 | 512,295 | ||||||
Randgold Resources Ltd. | 12,696 | 1,024,728 | ||||||
Rio Tinto PLC | 47,349 | 2,578,025 | ||||||
Severn Trent PLC | 23,049 | 718,063 | ||||||
Tate & Lyle PLC | 21,377 | 253,034 | ||||||
United Utilities Group PLC | 65,785 | 884,207 | ||||||
Vedanta Resources PLC | 6,830 | 109,100 | ||||||
Total United Kingdom | 10,346,579 | |||||||
United States — 31.2% | ||||||||
Alcoa, Inc. | 27,604 | 371,826 | ||||||
Alpha Natural Resources, Inc.*(a) | 15,977 | 68,701 | ||||||
American Water Works Co., Inc. | 17,243 | 785,074 | ||||||
Anadarko Petroleum Corp. | 381 | 37,727 | ||||||
Apache Corp. | 293 | 25,433 | ||||||
Aqua America, Inc. | 17,076 | 428,437 | ||||||
Arch Coal, Inc.(a) | 15,350 | 70,303 | ||||||
Archer-Daniels-Midland Co. | 30,095 | 1,316,054 | ||||||
Baker Hughes, Inc. | 326 | 22,787 | ||||||
Bunge Ltd. | 6,769 | 539,151 | ||||||
Chevron Corp. | 1,421 | 178,364 | ||||||
Cliffs Natural Resources, Inc.(a) | 3,918 | 69,427 | ||||||
Cloud Peak Energy, Inc.* | 4,401 | 86,656 | ||||||
Coeur Mining, Inc.* | 14,195 | 122,929 | ||||||
ConAgra Foods, Inc. | 19,294 | 588,660 | ||||||
ConocoPhillips | 914 | 67,919 | ||||||
CONSOL Energy, Inc. | 16,610 | 739,311 | ||||||
Devon Energy Corp. | 303 | 21,210 | ||||||
EOG Resources, Inc. | 407 | 39,886 | ||||||
Exxon Mobil Corp. | 3,218 | 329,555 | ||||||
Flowserve Corp. | 13,274 | 969,666 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 26,590 | 913,898 | ||||||
General Mills, Inc. | 28,200 | 1,495,164 | ||||||
Halliburton Co. | 633 | 39,923 | ||||||
Hershey Co. | 10,252 | 986,653 | ||||||
Hess Corp. | 242 | 21,577 | ||||||
Hillshire Brands Co. | 11,091 | 395,394 | ||||||
Hormel Foods Corp. | 23,914 | 1,140,459 | ||||||
IDEX Corp. | 7,804 | 581,944 | ||||||
Ingredion, Inc. | 3,418 | 240,798 | ||||||
J.M. Smucker Co. | 4,758 | 460,003 | ||||||
Joy Global, Inc.(a) | 7,239 | 437,091 | ||||||
KapStone Paper And Packaging Corp.* | 25,366 | 669,155 | ||||||
Kellogg Co. | 16,483 | 1,101,559 | ||||||
Kinder Morgan, Inc. | 768 | 25,083 | ||||||
Louisiana-Pacific Corp.* | 37,435 | 613,560 | ||||||
MeadWestvaco Corp. | 46,263 | 1,807,495 | ||||||
Mondelez International, Inc., Class A | 78,061 | 2,782,875 | ||||||
National Oilwell Varco, Inc. | 319 | 25,051 | ||||||
Newmont Mining Corp. | 69,221 | 1,718,758 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
United States (continued) | ||||||||
Occidental Petroleum Corp. | 589 | $ | 56,397 | |||||
Peabody Energy Corp. | 19,612 | 372,824 | ||||||
Phillips 66 | 438 | 36,450 | ||||||
Pioneer Natural Resources Co. | 107 | 20,680 | ||||||
Royal Gold, Inc. | 8,962 | 593,284 | ||||||
Schlumberger Ltd. | 973 | 98,808 | ||||||
Seaboard Corp.* | 108 | 263,304 | ||||||
Southern Copper Corp. | 20,471 | 616,996 | ||||||
Tyson Foods, Inc., Class A | 30,826 | 1,293,767 | ||||||
Valero Energy Corp. | 396 | 22,639 | ||||||
Williams Cos., Inc. (The) | 509 | 21,465 | ||||||
Xylem, Inc. | 17,817 | 669,741 | ||||||
Total United States | 26,401,871 | |||||||
Total Common Stocks — 90.5% | ||||||||
(Cost $78,508,394) | 76,656,816 | |||||||
Short-Term Investment — 8.4% | ||||||||
Money Market Fund — 8.4% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(d) | ||||||||
(Cost $7,085,131) | 7,085,131 | 7,085,131 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 4.5% | ||||||||
Money Market Fund — 4.5% | ||||||||
BNY Mellon Overnight | ||||||||
Government Fund 0.06%(e) | ||||||||
(Cost $3,839,457) | 3,839,457 | 3,839,457 | ||||||
Total Investments — 103.4% | ||||||||
(Cost $89,432,982) | $ | 87,581,404 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (3.4)%(f) | (2,862,797 | ) | ||||||
Net Assets — 100.0% | $ | 84,718,607 |
* | Non-income producing securities. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $3,618,898; total market value of collateral held by the Fund was $3,839,457. |
(b) | Security fair valued as determined in good faith in accordance with procedures established by the Board of Trustees. |
(c) | Security has been deemed illiquid because it may not be able to be resold within seven days. At April 30, 2014, the value of this security was $216,410 (d) Rate shown reflects the 7-day yield at April 30, 2014. |
(e) | Rate shown reflects the 1-day yield at April 30, 2014. |
(f) | Liabilities in Excess of Other Assets includes net unrealized depreciation on future contracts. |
ADR — American Depositary Receipt
PLC — Public Company Limited
See notes to financial statements.
38 |
Schedules of Investments — IQ Global Resources ETF (continued) |
April 30, 2014 |
Open futures contracts outstanding at April 30, 2014:
Type | Broker | Expiration Date | Number of Contracts Purchased (Sold) | Value at Trade Date | Value at April 30, 2014 | Unrealized (Depreciation) | ||||||||||||||
E-mini S&P 500 Future | Morgan Stanley | June 2014 | (89 | ) | $ | (8,321,385 | ) | $ | (8,356,655 | ) | $ | (35,270 | ) | |||||||
Mini MSCI EAFE Index Future | Morgan Stanley | June 2014 | (87 | ) | (8,193,132 | ) | (8,370,705 | ) | (177,573 | ) | ||||||||||
$ | (212,843 | ) |
Cash posted as collateral to broker for futures contracts was $892,135 at April 30, 2014.
See notes to financial statements.
39 |
Schedules of Investments — IQ Merger Arbitrage ETF |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks — 73.3% | ||||||||
Basic Materials — 7.0% | ||||||||
AMCOL International Corp. | 4,644 | $ | 212,927 | |||||
Osisko Mining Corp.* | 79,730 | 570,304 | ||||||
Rautaruukki OYJ* | 23,797 | 295,642 | ||||||
Sakari Resources Ltd.*(a)(b) | 425 | 382 | ||||||
Texas Industries, Inc.* | 14,951 | 1,296,252 | ||||||
Total Basic Materials | 2,375,507 | |||||||
Capital Goods — 9.0% | ||||||||
Foster Wheeler AG* | 49,046 | 1,681,297 | ||||||
Scania AB, Class B | 45,006 | 1,360,491 | ||||||
Total Capital Goods | 3,041,788 | |||||||
Communication Services — 7.2% | ||||||||
Portugal Telecom SGPS SA(c) | 196,419 | 817,034 | ||||||
Ziggo NV | 37,292 | 1,617,401 | ||||||
Total Communication Services | 2,434,435 | |||||||
Consumer Cyclicals — 3.1% | ||||||||
Barnes & Noble, Inc.* | 27,634 | 453,198 | ||||||
Zale Corp.* | 27,147 | 580,674 | ||||||
Total Consumer Cyclicals | 1,033,872 | |||||||
Consumer Staples — 12.9% | ||||||||
LIN Media LLC, Class A* | 33,681 | 789,146 | ||||||
Olam International Ltd. | 234,000 | 415,677 | ||||||
Schawk, Inc. | 3,947 | 78,940 | ||||||
Time Warner Cable, Inc. | 21,847 | 3,090,477 | ||||||
Total Consumer Staples | 4,374,240 | |||||||
Energy — 4.8% | ||||||||
Aurora Oil & Gas Ltd.* | 41,453 | 156,706 | ||||||
Bourbon SA | 3,258 | 107,242 | ||||||
EPL Oil & Gas, Inc.* | 34,710 | 1,358,549 | ||||||
Total Energy | 1,622,497 | |||||||
Financials — 4.0% | ||||||||
Aaron’s, Inc. | 13,023 | 383,788 | ||||||
Chatham Lodging Trust | 4,644 | 94,413 | ||||||
F&C Asset Management PLC | 116,938 | 235,762 | ||||||
Pohjola Bank PLC, Class A(c) | 25,569 | 562,279 | ||||||
Singapore Land Ltd. | 10,000 | 74,322 | ||||||
Total Financials | 1,350,564 | |||||||
Health Care — 10.5% | ||||||||
ArthroCare Corp.* | 4,062 | 197,129 | ||||||
Emeritus Corp.* | 13,375 | 398,976 | ||||||
Forest Laboratories, Inc.* | 32,286 | 2,967,406 | ||||||
Total Health Care | 3,563,511 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Technology — 12.3% | ||||||||
LSI Corp. | 154,745 | $ | 1,723,859 | |||||
Riverbed Technology, Inc.* | 53,480 | 1,040,186 | ||||||
TriQuint Semiconductor, Inc.* | 100,061 | 1,418,865 | ||||||
Total Technology | 4,182,910 | |||||||
Utilities — 2.5% | ||||||||
UNS Energy Corp. | 13,932 | 836,756 | ||||||
Total Common Stocks — 73.3% | ||||||||
(Cost $24,562,546) | 24,816,080 | |||||||
Right — 0.0% | ||||||||
Health Care — 0.0% | ||||||||
Trius Therapeutics CVR*(b) | ||||||||
(Cost $0) | 6,177 | — | ||||||
Short-Term Investment — 21.4% | ||||||||
Money Market Fund — 21.4% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(d) | ||||||||
(Cost $7,271,662) | 7,271,662 | 7,271,662 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 4.3% | ||||||||
Money Market Fund — 4.3% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(e) | ||||||||
(Cost $1,452,560) | 1,452,560 | 1,452,560 | ||||||
Total Investments — 99.0% | ||||||||
(Cost $33,286,768) | $ | 33,540,302 | ||||||
Other Assets in Excess of | ||||||||
Liabilities — 1.0%(f) | 322,034 | |||||||
Net Assets — 100.0% | $ | 33,862,336 |
* | Non-income producing securities. |
(a) | Security has been deemed illiquid because it may not be able to be sold within seven days. At April 30, 2014, the value of this security was $382. |
(b) | Security fair valued as determined in good faith in accordance with the procedures established by the Board of Trustees. |
(c) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $1,376,777; total market value of collateral held by the Fund was $1,452,560. |
(d) | Rate shown reflects the 7-day yield at April 30, 2014. |
(e) | Rate shown reflects the 1-day yield at April 30, 2014. |
(f) | Other Assets in Excess of Liabilities includes net unrealized depreciation on future contracts. |
CVR — Contingent Value Right
PLC — Public Limited Company
Open futures contracts outstanding at April 30, 2014:
Type | Broker | Expiration Date | Number of Contracts Purchased (Sold) | Value at Trade Date | Value at April 30, 2014 | Unrealized (Depreciation) | ||||||||||||||
E-mini S&P 500 Future | Morgan Stanley | June 2014 | (65 | ) | $ | (6,068,315 | ) | $ | (6,103,175 | ) | $ | (34,860 | ) | |||||||
Mini MSCI EAFE Index Fund Future | Morgan Stanley | June 2014 | (64 | ) | (6,040,481 | ) | (6,157,760 | ) | (117,279 | ) | ||||||||||
$ | (152,139 | ) |
Cash posted as collateral to broker for futures contracts was $678,880 at April 30, 2014.
See notes to financial statements.
40 |
Schedules of Investments — IQ Australia Small Cap ETF |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks — 98.9% | ||||||||
Consumer Discretionary — 24.2% | ||||||||
Ainsworth Game Technology Ltd. | 9,061 | $ | 34,841 | |||||
Aristocrat Leisure Ltd. | 37,950 | 176,868 | ||||||
Automotive Holdings Group Ltd. | 15,386 | 57,024 | ||||||
Breville Group Ltd. | 11,143 | 94,573 | ||||||
Cash Converters International Ltd. | 34,978 | 35,326 | ||||||
David Jones Ltd.(a) | 42,752 | 155,675 | ||||||
Echo Entertainment Group Ltd. | 66,386 | 173,458 | ||||||
Fairfax Media Ltd. | 162,410 | 147,471 | ||||||
G.U.D. Holdings Ltd. | 6,150 | 30,486 | ||||||
G8 Education Ltd. | 19,829 | 85,800 | ||||||
Invocare Ltd. | 9,290 | 91,585 | ||||||
JB Hi-Fi Ltd.(a) | 8,022 | 143,453 | ||||||
Myer Holdings Ltd.(a) | 48,154 | 99,050 | ||||||
Navitas Ltd. | 15,252 | 103,868 | ||||||
Pacific Brands Ltd. | 70,350 | 32,917 | ||||||
Retail Food Group Ltd. | 9,870 | 38,226 | ||||||
Seven West Media Ltd. | 54,680 | 94,488 | ||||||
Slater & Gordon Ltd. | 12,113 | 52,749 | ||||||
Southern Cross Media Group Ltd. | 57,041 | 67,914 | ||||||
STW Communications Group Ltd. | 27,512 | 35,943 | ||||||
Super Retail Group Ltd. | 6,919 | 65,134 | ||||||
Tabcorp Holdings Ltd. | 65,053 | 224,222 | ||||||
Ten Network Holdings Ltd.* | 93,010 | 23,268 | ||||||
Wotif.com Holdings Ltd. | 11,733 | 29,026 | ||||||
Total Consumer Discretionary | 2,093,365 | |||||||
Consumer Staples — 2.9% | ||||||||
Bega Cheese Ltd. | 9,760 | 46,572 | ||||||
Goodman Fielder Ltd. | 150,498 | 94,125 | ||||||
GrainCorp Ltd., Class A(a) | 13,087 | 107,434 | ||||||
Total Consumer Staples | 248,131 | |||||||
Energy — 7.8% | ||||||||
Aurora Oil & Gas Ltd.* | 34,980 | 132,236 | ||||||
AWE Ltd.* | 42,214 | 61,212 | ||||||
Beach Energy Ltd. | 104,076 | 165,380 | ||||||
Buru Energy Ltd.*(a) | 20,595 | 22,326 | ||||||
Drillsearch Energy Ltd.* | 29,733 | 44,216 | ||||||
Energy Resources of Australia Ltd.* | 13,688 | 16,804 | ||||||
Karoon Gas Australia Ltd.* | 20,582 | 46,913 | ||||||
Paladin Energy Ltd.*(a) | 75,109 | 30,273 | ||||||
Senex Energy Ltd.* | 85,079 | 52,422 | ||||||
Sundance Energy Australia Ltd.* | 35,562 | 34,268 | ||||||
Whitehaven Coal Ltd.*(a) | 53,021 | 71,725 | ||||||
Total Energy | 677,775 | |||||||
Financials — 10.0% | ||||||||
Bank of Queensland Ltd. | 27,062 | 307,411 | ||||||
Challenger Ltd. | 43,051 | 281,216 | ||||||
FlexiGroup Ltd. | 18,328 | 65,550 | ||||||
IOOF Holdings Ltd. | 19,222 | 151,030 | ||||||
Magellan Financial Group Ltd. | 5,256 | 60,874 | ||||||
Total Financials | 866,081 | |||||||
Health Care — 7.4% | ||||||||
Acrux Ltd. | 14,214 | 13,631 | ||||||
Ansell Ltd. | 13,182 | 220,947 | ||||||
Mesoblast Ltd.* | 16,009 | 69,123 | ||||||
Primary Health Care Ltd. | 40,780 | 177,210 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Health Care (continued) | ||||||||
Sigma Pharmaceuticals Ltd. | 93,774 | $ | 62,993 | |||||
Sirtex Medical Ltd. | 3,977 | 58,000 | ||||||
Virtus Health Ltd. | 5,287 | 36,348 | ||||||
Total Health Care | 638,252 | |||||||
Industrials — 15.5% | ||||||||
Bradken Ltd. | 13,559 | 53,142 | ||||||
Cabcharge Australia Ltd. | 10,385 | 37,334 | ||||||
Cardno Ltd. | 13,449 | 86,979 | ||||||
Downer EDI Ltd. | 34,458 | 159,316 | ||||||
GWA Group Ltd. | 18,813 | 46,890 | ||||||
McMillan Shakespeare Ltd. | 4,861 | 43,734 | ||||||
Mermaid Marine Australia Ltd. | 28,273 | 56,060 | ||||||
Mineral Resources Ltd. | 10,325 | 111,164 | ||||||
Monadelphous Group Ltd.(a) | 7,035 | 113,940 | ||||||
Qantas Airways Ltd.* | 185,512 | 209,701 | ||||||
RCR Tomlinson Ltd. | 11,287 | 28,550 | ||||||
SAI Global Ltd. | 18,205 | 72,026 | ||||||
Skilled Group Ltd. | 18,067 | 45,868 | ||||||
Tox Free Solutions Ltd. | 11,279 | 36,263 | ||||||
Transfield Services Ltd.* | 38,913 | 34,432 | ||||||
Transpacific Industries Group Ltd.* | 84,203 | 86,990 | ||||||
UGL Ltd. | 13,870 | 86,746 | ||||||
Virgin Australia Holdings Ltd.* | 86,079 | 29,510 | ||||||
Total Industrials | 1,338,645 | |||||||
Information Technology — 2.7% | ||||||||
carsales.com Ltd. | 14,989 | 150,685 | ||||||
Iress Ltd. | 11,133 | 85,410 | ||||||
Total Information Technology | 236,095 | |||||||
Materials — 23.5% | ||||||||
Adelaide Brighton Ltd. | 36,831 | 133,432 | ||||||
Alumina Ltd.* | 177,151 | 221,588 | ||||||
Aquila Resources Ltd.*(a) | 13,476 | 31,215 | ||||||
Arrium Ltd. | 103,919 | 114,580 | ||||||
Atlas Iron Ltd. | 62,575 | 52,471 | ||||||
BC Iron Ltd. | 10,047 | 40,680 | ||||||
Beadell Resources Ltd.* | 62,875 | 38,449 | ||||||
BlueScope Steel Ltd.* | 44,387 | 266,090 | ||||||
CSR Ltd. | 42,973 | 145,331 | ||||||
DuluxGroup Ltd. | 32,354 | 171,772 | ||||||
Evolution Mining Ltd. | 40,466 | 32,057 | ||||||
Independence Group NL | 18,787 | 75,373 | ||||||
Lynas Corp., Ltd.*(a) | 159,363 | 24,363 | ||||||
Medusa Mining Ltd.* | 17,475 | 29,145 | ||||||
Mount Gibson Iron Ltd. | 50,432 | 34,111 | ||||||
Nufarm Ltd. | 20,125 | 77,384 | ||||||
OceanaGold Corp.* | 18,774 | 46,967 | ||||||
OZ Minerals Ltd. | 26,218 | 89,396 | ||||||
PanAust Ltd. | 41,095 | 61,113 | ||||||
Regis Resources Ltd. | 25,726 | 57,922 | ||||||
Sandfire Resources NL* | 7,582 | 39,903 | ||||||
Sims Metal Management Ltd.* | 14,356 | 130,222 | ||||||
Sirius Resources NL*(a) | 22,468 | 56,000 | ||||||
Western Areas Ltd. | 15,886 | 60,790 | ||||||
Total Materials | 2,030,354 |
See notes to financial statements.
41 |
Schedules of Investments — IQ Australia Small Cap ETF (continued) |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Telecommunication Services — 1.9% | ||||||||
Amcom Telecommunications Ltd. | 14,386 | $ | 27,991 | |||||
iiNET Ltd. | 11,687 | 77,533 | ||||||
M2 Group Ltd.(a) | 11,357 | 59,349 | ||||||
Total Telecommunication Services | 164,873 | |||||||
Utilities — 3.0% | ||||||||
Envestra Ltd. | 75,843 | 81,867 | ||||||
ERM Power Ltd. | 10,844 | 18,437 | ||||||
Spark Infrastructure Group | 96,598 | 157,973 | ||||||
Total Utilities | 258,277 | |||||||
Total Common Stocks — 98.9% | ||||||||
(Cost $9,175,938) | 8,551,848 | |||||||
Right — 0.0%† | ||||||||
Financials — 0.0%† | ||||||||
Bank of Queensland Ltd., expiring | ||||||||
5/9/2014* | ||||||||
(Cost $0) | 3,516 | 4,919 |
Shares | Value | |||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 8.4% | ||||||||
Money Market Fund — 8.4% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(b) | ||||||||
(Cost $724,700) | 724,700 | $ | 724,700 | |||||
Total Investments — 107.3% | ||||||||
(Cost $9,900,638) | $ | 9,281,467 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (7.3)% | (632,728 | ) | ||||||
Net Assets — 100.0% | $ | 8,648,739 |
* | Non-income producing securities. |
† | Less than 0.05%. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $680,081; total market value of collateral held by the Fund was $724,700. |
(b) | Rate shown reflects the 1-day yield at April 30, 2014. |
See notes to financial statements.
42 |
Schedules of Investments — IQ Canada Small Cap ETF |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks — 99.1% | ||||||||
Consumer Discretionary — 3.2% | ||||||||
DHX Media Ltd. | 10,546 | $ | 47,375 | |||||
Hudson’s Bay Co. | 13,392 | 211,475 | ||||||
Martinrea International, Inc. | 11,316 | 113,835 | ||||||
RONA, Inc. | 16,219 | 163,306 | ||||||
Total Consumer Discretionary | 535,991 | |||||||
Consumer Staples — 2.6% | ||||||||
Jean Coutu Group (PJC), Inc., Class A | 11,130 | 224,030 | ||||||
Maple Leaf Foods, Inc. | 12,366 | 204,062 | ||||||
Total Consumer Staples | 428,092 | |||||||
Energy — 39.3% | ||||||||
Advantage Oil & Gas Ltd.* | 22,347 | 141,317 | ||||||
Bankers Petroleum Ltd.* | 34,151 | 185,777 | ||||||
Bellatrix Exploration Ltd.* | 21,697 | 210,752 | ||||||
Birchcliff Energy Ltd.* | 13,360 | 154,727 | ||||||
BlackPearl Resources, Inc.* | 36,246 | 101,725 | ||||||
Calfrac Well Services Ltd. | 5,749 | 198,801 | ||||||
Canacol Energy Ltd.* | 11,188 | 84,207 | ||||||
CanElson Drilling, Inc. | 11,143 | 83,462 | ||||||
Canyon Services Group, Inc. | 7,894 | 108,471 | ||||||
Crew Energy, Inc.* | 15,833 | 179,184 | ||||||
Deethree Exploration Ltd.* | 9,114 | 97,497 | ||||||
Denison Mines Corp.* | 55,700 | 76,131 | ||||||
Ensign Energy Services, Inc. | 16,940 | 266,267 | ||||||
Gibson Energy, Inc. | 16,478 | 439,333 | ||||||
Gran Tierra Energy, Inc.* | 35,830 | 254,331 | ||||||
Ithaca Energy, Inc.* | 41,070 | 107,779 | ||||||
Kelt Exploration Ltd.* | 11,730 | 147,179 | ||||||
Legacy Oil + Gas, Inc.* | 19,216 | 149,358 | ||||||
Lightstream Resources Ltd.(a) | 25,799 | 154,919 | ||||||
Long Run Exploration Ltd.(a) | 10,720 | 54,115 | ||||||
Nuvista Energy Ltd.* | 17,819 | 177,630 | ||||||
Painted Pony Petroleum Ltd.* | 11,513 | 118,755 | ||||||
Parex Resources, Inc.* | 12,672 | 126,553 | ||||||
Parkland Fuel Corp.(a) | 9,740 | 180,165 | ||||||
Poseidon Concepts Corp.*(e) | 13,377 | 3,291 | ||||||
Precision Drilling Corp. | 39,214 | 509,180 | ||||||
Raging River Exploration, Inc.* | 19,721 | 173,409 | ||||||
RMP Energy, Inc.* | 15,324 | 116,593 | ||||||
Secure Energy Services, Inc. | 14,871 | 266,403 | ||||||
Surge Energy, Inc.(a) | 23,652 | 149,354 | ||||||
TORC Oil & Gas Ltd. | 11,850 | 144,474 | ||||||
TransGlobe Energy Corp.* | 9,127 | 71,023 | ||||||
Trican Well Service Ltd. | 19,845 | 283,900 | ||||||
Trinidad Drilling Ltd. | 18,517 | 206,860 | ||||||
Twin Butte Energy Ltd.(a) | 40,154 | 86,349 | ||||||
Veresen, Inc.(a) | 27,229 | 402,189 | ||||||
Whitecap Resources, Inc.(a) | 26,208 | 345,317 | ||||||
Total Energy | 6,556,777 | |||||||
Financials — 2.8% | ||||||||
AGF Management Ltd., Class B | 8,892 | 98,931 | ||||||
Canaccord Genuity Group, Inc. | 9,463 | 81,657 | ||||||
Element Financial Corp.* | 24,193 | 289,447 | ||||||
Total Financials | 470,035 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Health Care — 0.8% | ||||||||
Extendicare, Inc. | 11,564 | $ | 71,020 | |||||
ProMetic Life Sciences, Inc.* | 57,232 | 56,844 | ||||||
Total Health Care | 127,864 | |||||||
Industrials — 12.2% | ||||||||
Aecon Group, Inc. | 7,367 | 123,583 | ||||||
Air Canada, Class B* | 26,486 | 182,937 | ||||||
CAE, Inc. | 35,241 | 464,656 | ||||||
Horizon North Logistics, Inc. | 13,273 | 96,634 | ||||||
Progressive Waste Solutions Ltd. | 14,643 | 355,985 | ||||||
Russel Metals, Inc. | 8,185 | 240,527 | ||||||
TransForce, Inc. | 11,755 | 256,319 | ||||||
WestJet Airlines Ltd. | 13,654 | 310,542 | ||||||
Total Industrials | 2,031,183 | |||||||
Information Technology — 2.2% | ||||||||
Davis + Henderson Corp. | 10,824 | 313,047 | ||||||
Redknee Solutions, Inc.* | 12,692 | 55,628 | ||||||
Total Information Technology | 368,675 | |||||||
Materials — 30.0% | ||||||||
Ainsworth Lumber Co., Ltd.* | 14,433 | 49,449 | ||||||
Alacer Gold Corp. | 31,137 | 74,335 | ||||||
Alamos Gold, Inc. | 17,168 | 160,346 | ||||||
Argonaut Gold, Inc.* | 20,221 | 74,623 | ||||||
AuRico Gold, Inc. | 33,429 | 138,900 | ||||||
B2Gold Corp.* | 86,064 | 247,029 | ||||||
Canexus Corp. | 24,314 | 106,787 | ||||||
Canfor Corp.* | 6,535 | 148,034 | ||||||
Capstone Mining Corp.* | 45,826 | 120,677 | ||||||
Centerra Gold, Inc. | 21,470 | 109,947 | ||||||
China Gold International Resources | ||||||||
Corp., Ltd.* | 32,532 | 83,594 | ||||||
Continental Gold Ltd.* | 14,176 | 50,377 | ||||||
Detour Gold Corp.* | 21,030 | 209,064 | ||||||
Dundee Precious Metals, Inc.* | 13,978 | 46,362 | ||||||
Endeavour Silver Corp.* | 13,321 | 60,812 | ||||||
First Majestic Silver Corp.* | 15,184 | 143,891 | ||||||
Fortuna Silver Mines, Inc.* | 16,946 | 70,103 | ||||||
HudBay Minerals, Inc. | 26,066 | 222,076 | ||||||
IAMGOLD Corp. | 50,345 | 175,241 | ||||||
International Forest Products | ||||||||
Ltd., Class A* | 8,381 | 126,924 | ||||||
Intertape Polymer Group, Inc. | 7,380 | 86,479 | ||||||
Ivanhoe Mines Ltd.* | 56,053 | 92,447 | ||||||
Lundin Mining Corp.* | 68,700 | 350,558 | ||||||
Major Drilling Group International, Inc. | 10,662 | 83,745 | ||||||
Nevsun Resources Ltd. | 26,347 | 95,310 | ||||||
Norbord, Inc. | 3,436 | 84,065 | ||||||
Osisko Mining Corp.* | 58,822 | 420,751 | ||||||
Pan American Silver Corp. | 20,176 | 261,059 | ||||||
Pretium Resources, Inc.* | 10,537 | 68,170 | ||||||
Primero Mining Corp.*(a) | 16,874 | 106,553 | ||||||
Sandstorm Gold Ltd.* | 12,891 | 71,300 | ||||||
SEMAFO, Inc. | 36,915 | 137,912 | ||||||
Sherritt International Corp. | 37,711 | 159,442 | ||||||
Silver Standard Resources, Inc.* | 10,900 | 107,763 | ||||||
Tahoe Resources, Inc.* | 11,089 | 246,445 | ||||||
Thompson Creek Metals Co., Inc.* | 18,294 | 49,009 | ||||||
Torex Gold Resources, Inc.* | 97,940 | 108,877 |
See notes to financial statements.
43 |
Schedules of Investments — IQ Canada Small Cap ETF (continued) |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Materials (continued) | ||||||||
Western Forest Products, Inc. | 28,879 | $ | 57,629 | |||||
Total Materials | 5,006,085 | |||||||
Telecommunication Services — 1.7% | ||||||||
Manitoba Telecom Services, Inc. | 10,031 | 276,859 | ||||||
Utilities — 4.3% | ||||||||
Algonquin Power & Utilities Corp. | 21,152 | 151,878 | ||||||
Capital Power Corp. | 10,972 | 246,144 | ||||||
Just Energy Group, Inc.(a) | 14,047 | 111,485 | ||||||
Superior Plus Corp. | 16,683 | 200,813 | ||||||
Total Utilities | 710,320 | |||||||
Total Common Stocks — 99.1% | ||||||||
(Cost $18,038,005) | 16,511,881 | |||||||
Short-Term Investment — 0.0%(b) | ||||||||
Money Market Fund — 0.0%(b) | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(c) | ||||||||
(Cost $1,114) | 1,114 | 1,114 |
Shares | Value | |||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 8.6% | ||||||||
Money Market Fund — 8.6% | ||||||||
BNY Mellon Overnight Government Fund, | ||||||||
0.06%(d) | ||||||||
(Cost $1,436,288) | 1,436,288 | $ | 1,436,288 | |||||
Total Investments — 107.7% | ||||||||
(Cost $19,475,407) | $ | 17,949,283 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (7.7)% | (1,286,783 | ) | ||||||
Net Assets — 100.0% | $ | 16,662,500 |
* | Non-income producing securities. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $1,359,744; total market value of collateral held by the Fund was $1,436,288. |
(b) | Less than 0.05%. |
(c) | Rate shown reflects the 7-day yield at April 30, 2014. |
(d) | Rate shown reflects the 1-day yield at April 30, 2014. |
(e) | Security fair valued as determined in good faith in accordance with the procedures established by the Board of Trustees. |
See notes to financial statements.
44 |
Schedules of Investments — IQ Global Agribusiness Small Cap ETF |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks — 99.4% | ||||||||
Australia — 4.6% | ||||||||
GrainCorp Ltd., Class A | 86,439 | $ | 709,598 | |||||
Nufarm Ltd. | 118,914 | 457,246 | ||||||
Total Australia | 1,166,844 | |||||||
Canada — 4.9% | ||||||||
Maple Leaf Foods, Inc. | 52,224 | 861,795 | ||||||
SunOpta, Inc.* | 33,448 | 390,338 | ||||||
Total Canada | 1,252,133 | |||||||
China — 7.7% | ||||||||
Changshouhua Food Co. Ltd. | 173,661 | 176,285 | ||||||
China BlueChemical Ltd., Class H | 951,608 | 510,611 | ||||||
China Huiyuan Juice Group Ltd.* | 533,277 | 349,426 | ||||||
China Minzhong Food Corp., Ltd. | 39,231 | 28,907 | ||||||
China Modern Dairy Holdings Ltd.*(a) | 1,087,603 | 465,744 | ||||||
First Tractor Co., Ltd., Class H(a) | 228,904 | 134,044 | ||||||
Honworld Group Ltd.* | 75,963 | 51,244 | ||||||
Shenguan Holdings Group Ltd.(a) | 619,929 | 265,472 | ||||||
Total China | 1,981,733 | |||||||
Hong Kong — 6.3% | ||||||||
Asian Citrus Holdings Ltd.(a) | 429,598 | 89,213 | ||||||
China Foods Ltd.* | 412,843 | 139,516 | ||||||
China Huishan Dairy Holdings Co., Ltd.*(a) . | 2,700,283 | 613,000 | ||||||
China Yurun Food Group Ltd.*(a) | 763,057 | 367,117 | ||||||
Sinofert Holdings Ltd. | 1,007,909 | 124,805 | ||||||
Yashili International Holdings Ltd. | 349,971 | 169,279 | ||||||
YuanShengTai Dairy Farm Ltd.* | 616,247 | 102,538 | ||||||
Total Hong Kong | 1,605,468 | |||||||
Indonesia — 2.4% | ||||||||
PT Malindo Feedmill Tbk | 396,230 | 102,472 | ||||||
PT Perusahaan Perkebunan London | ||||||||
Sumatra Indonesia Tbk | 1,579,670 | 334,748 | ||||||
PT Salim Ivomas Pratama Tbk | 1,952,017 | 168,838 | ||||||
Total Indonesia | 606,058 | |||||||
Ireland — 3.8% | ||||||||
Greencore Group PLC | 218,670 | 964,073 | ||||||
Japan — 34.8% | ||||||||
Asmo Corp.* | 16,828 | 17,957 | ||||||
Ezaki Glico Co. Ltd. | 47,506 | 625,042 | ||||||
Fuji Oil Co., Ltd. | 33,489 | 453,077 | ||||||
House Foods Group, Inc. | 36,499 | 607,423 | ||||||
Iseki & Co., Ltd. | 115,832 | 299,360 | ||||||
Itoham Foods, Inc. | 73,571 | 333,464 | ||||||
J-Oil Mills, Inc. | 54,108 | 144,606 | ||||||
Kewpie Corp. | 60,574 | 871,103 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Japan (continued) | ||||||||
Kumiai Chemical Industry Co., Ltd. | 41,460 | $ | 281,676 | |||||
Mitsui Sugar Co., Ltd. | 46,169 | 191,636 | ||||||
Morinaga Milk Industry Co., Ltd. | 116,595 | 434,877 | ||||||
Nihon Nohyaku Co., Ltd. | 27,912 | 347,841 | ||||||
Nippon Flour Mills Co., Ltd. | 71,357 | 398,174 | ||||||
Nippon Meat Packers, Inc. | 114,589 | 1,986,658 | ||||||
Nisshin Oillio Group Ltd.(a) | 65,360 | 218,827 | ||||||
Nisshin Seifun Group, Inc. | 125,411 | 1,459,752 | ||||||
Prima Meat Packers Ltd. | 71,200 | 156,828 | ||||||
Yamatane Corp. | 51,677 | 75,884 | ||||||
Total Japan | 8,904,185 | |||||||
Luxembourg — 1.4% | ||||||||
Adecoagro SA ADR* | 41,405 | 369,333 | ||||||
Netherlands — 7.0% | ||||||||
Nutreco NV | 38,703 | 1,795,584 | ||||||
Singapore — 3.4% | ||||||||
First Resources Ltd. | 283,152 | 579,681 | ||||||
Indofood Agri Resources Ltd. | 226,990 | 192,571 | ||||||
Sino Grandness Food Industry Group Ltd.* | 176,715 | 97,131 | ||||||
Total Singapore | 869,383 | |||||||
Spain — 4.4% | ||||||||
Deoleo SA* | 360,394 | 197,383 | ||||||
Ebro Foods SA | 39,855 | 917,331 | ||||||
Total Spain | 1,114,714 | |||||||
Thailand — 0.3% | ||||||||
GFPT PCL | 173,213 | 75,473 | ||||||
United Arab Emirates — 0.3% | ||||||||
Amira Nature Foods Ltd.*(a) | 5,151 | 80,150 | ||||||
United Kingdom — 2.9% | ||||||||
Dairy Crest Group PLC | 77,919 | 607,723 | ||||||
Premier Foods PLC* | 125,034 | 121,397 | ||||||
Total United Kingdom | 729,120 | |||||||
United States — 15.2% | ||||||||
American Vanguard Corp. | 14,352 | 255,609 | ||||||
Annie’s, Inc.*(a) | 9,713 | 315,769 | ||||||
Chiquita Brands International, Inc.* | 25,086 | 287,987 | ||||||
CVR Partners LP | 19,400 | 413,996 | ||||||
Lindsay Corp.(a) | 7,116 | 627,133 | ||||||
Toro Co. | 31,457 | 1,998,778 | ||||||
Total United States | 3,899,272 |
See notes to financial statements.
45 |
Schedules of Investments — IQ Global Agribusiness Small Cap ETF (continued) |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
United States (continued) | ||||||||
Total Common Stocks — 99.4% | ||||||||
(Cost $26,158,140) | $ | 25,413,523 | ||||||
Short-Term Investment — 0.3% | ||||||||
Money Market Fund — 0.3% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(b) | ||||||||
(Cost $72,449) | 72,449 | 72,449 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 10.2% | ||||||||
Money Market Fund — 10.2% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(c) | ||||||||
(Cost $2,613,437) | 2,613,437 | 2,613,437 |
Shares | Value | |||||||
Total Investments — 109.9% | ||||||||
(Cost $28,844,026) | $ | 28,099,409 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (9.9)% | (2,527,252 | ) | ||||||
Net Assets — 100.0% | $ | 25,572,157 |
* | Non-income producing securities. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $2,416,098; total market value of collateral held by the Fund was $2,613,437. |
(b) | Rate shown reflects the 7-day yield at April 30, 2014. |
(c) | Rate shown reflects the 1-day yield at April 30, 2014. |
ADR — American Depositary Receipt
LP — Limited Partnership
PCL — Public Company Limited
PLC — Public Limited Company
See notes to financial statements.
46 |
Schedules of Investments — IQ Global Oil Small Cap ETF |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks — 99.6% | ||||||||
Australia — 0.5% | ||||||||
Horizon Oil Ltd.*(a) | 31,228 | $ | 10,995 | |||||
Bermuda — 0.4% | ||||||||
Archer Ltd.* | 6,983 | 9,473 | ||||||
Canada — 13.2% | ||||||||
Canyon Services Group, Inc. | 2,045 | 28,100 | ||||||
Caracal Energy, Inc.* | 4,231 | 38,793 | ||||||
Ensign Energy Services, Inc. | 4,347 | 68,327 | ||||||
Horizon North Logistics, Inc. | 3,416 | 24,870 | ||||||
Ithaca Energy, Inc.* | 10,464 | 27,460 | ||||||
Lightstream Resources Ltd. | 6,600 | 39,632 | ||||||
Sunshine Oilsands Ltd.* | 79,374 | 8,190 | ||||||
TAG Oil Ltd.* | 2,089 | 6,072 | ||||||
TORC Oil & Gas Ltd. | 3,000 | 36,576 | ||||||
Twin Butte Energy Ltd.(a) | 10,295 | 22,139 | ||||||
Total Canada | 300,159 | |||||||
China — 1.3% | ||||||||
Shandong Molong Petroleum | ||||||||
Machinery Co., Ltd., Class H | 8,103 | 2,237 | ||||||
Sinopec Shanghai Petrochemical | ||||||||
Co., Ltd., Class H | 115,628 | 28,188 | ||||||
Total China | 30,425 | |||||||
Finland — 3.1% | ||||||||
Neste Oil OYJ(a) | 3,423 | 70,243 | ||||||
France — 2.4% | ||||||||
Etablissements Maurel et Prom | 3,006 | 53,558 | ||||||
Italy — 0.6% | ||||||||
Saras SpA* | 8,182 | 14,181 | ||||||
Japan — 10.7% | ||||||||
Cosmo Oil Co., Ltd. | 27,248 | 50,948 | ||||||
Showa Shell Sekiyu K.K. | 8,230 | 83,549 | ||||||
Toa Oil Co., Ltd. | 2,000 | 3,074 | ||||||
TonenGeneral Sekiyu K.K. | 11,318 | 106,920 | ||||||
Total Japan | 244,491 | |||||||
Norway — 4.7% | ||||||||
BW Offshore Ltd. | 10,479 | 13,653 | ||||||
Det Norske Oljeselskap ASA* | 2,128 | 23,205 | ||||||
DNO International ASA* | 20,111 | 69,591 | ||||||
Total Norway | 106,449 | |||||||
Singapore — 0.1% | ||||||||
Mirach Energy Ltd.* | 21,000 | 2,375 | ||||||
Thailand — 4.9% | ||||||||
Bangchak Petroleum PCL | 26,152 | 25,861 | ||||||
IRPC PCL | 354,881 | 40,357 | ||||||
Thai Oil PCL | 28,034 | 45,265 | ||||||
Total Thailand | 111,483 | |||||||
United Arab Emirates — 3.7% | ||||||||
Dragon Oil PLC | 7,817 | 83,156 | ||||||
United Kingdom — 2.5% | ||||||||
Exillon Energy PLC* | 2,121 | 5,059 | ||||||
Quadrise Fuels International PLC* | 11,643 | 6,783 | ||||||
Rockhopper Exploration PLC* | 9,053 | 16,204 | ||||||
Salamander Energy PLC* | 8,507 | 19,249 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
United Kingdom (continued) | ||||||||
Xcite Energy Ltd.* | 9,668 | $ | 10,448 | |||||
Total United Kingdom | 57,743 | |||||||
United States — 51.5% | ||||||||
Alon USA Energy, Inc. | 815 | 13,276 | ||||||
Alon USA Partners LP | 392 | 7,217 | ||||||
Bonanza Creek Energy, Inc.* | 1,038 | 50,468 | ||||||
BPZ Resources, Inc.* | 3,475 | 9,382 | ||||||
CVR Energy, Inc.(a) | 527 | 25,902 | ||||||
CVR Refining LP | 1,261 | 30,176 | ||||||
Emerald Oil, Inc.* | 1,881 | 13,299 | ||||||
Gulfport Energy Corp.* | 2,904 | 213,938 | ||||||
Harvest Natural Resources, Inc.*(a) | 1,386 | 6,251 | ||||||
Key Energy Services, Inc.* | 4,501 | 45,190 | ||||||
Kodiak Oil & Gas Corp.* | 8,998 | 114,365 | ||||||
Northern Tier Energy LP | 1,959 | 52,913 | ||||||
Ocean Rig UDW, Inc.* | 1,609 | 26,549 | ||||||
PBF Energy, Inc., Class A | 1,883 | 57,959 | ||||||
Pioneer Energy Services Corp.* | 2,114 | 31,647 | ||||||
QR Energy LP | 1,747 | 32,249 | ||||||
Sanchez Energy Corp.*(a) | 1,576 | 44,569 | ||||||
SemGroup Corp., Class A | 1,455 | 92,945 | ||||||
Stone Energy Corp.* | 1,661 | 81,472 | ||||||
Synergy Resources Corp.* | 2,086 | 24,281 | ||||||
Tesco Corp.* | 1,133 | 22,660 | ||||||
Tesoro Logistics LP | 1,219 | 77,894 | ||||||
VAALCO Energy, Inc.* | 1,879 | 17,324 | ||||||
Western Refining, Inc. | 1,837 | 79,909 | ||||||
Total United States | 1,171,835 | |||||||
Total Common Stocks — 99.6% | ||||||||
(Cost $2,142,898) | 2,266,566 | |||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 7.7% | ||||||||
Money Market Fund — 7.7% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(b) | ||||||||
(Cost $175,176) | 175,176 | 175,176 | ||||||
Total Investments — 107.3% | ||||||||
(Cost $2,318,074) | $ | 2,441,742 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (7.3)% | (165,541 | ) | ||||||
Net Assets — 100.0% | $ | 2,276,201 |
* | Non-income producing securities. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $156,467; total market value of collateral held by the Fund was $175,176. |
(b) | Rate shown reflects the 1-day yield at April 30, 2014. |
K.K. — Kabushiki Kaisha
LP — Limited Partnership
PCL — Public Company Limited
PLC — Public Limited Company
See notes to financial statements.
47 |
Schedules of Investments — IQ U.S. Real Estate Small Cap ETF |
April 30, 2014 |
Shares | Value | |||||||
Common Stocks — 99.4% | ||||||||
Diversified REITs — 13.8% | ||||||||
Cousins Properties, Inc. | 139,329 | $ | 1,620,396 | |||||
Empire State Realty Trust, Inc., Class A | 52,967 | 810,395 | ||||||
Investors Real Estate Trust | 77,538 | 676,131 | ||||||
Kennedy-Wilson Holdings, Inc. | 51,476 | 1,124,236 | ||||||
Redwood Trust, Inc.(a) | 59,605 | 1,299,389 | ||||||
Resource Capital Corp. | 91,380 | 502,590 | ||||||
Washington Real Estate Investment Trust | 46,408 | 1,135,140 | ||||||
Total Diversified REITs | 7,168,277 | |||||||
Hotel REITs — 13.7% | ||||||||
Ashford Hospitality Trust, Inc. | 55,635 | 570,815 | ||||||
Chesapeake Lodging Trust | 34,402 | 928,510 | ||||||
FelCor Lodging Trust, Inc. | 81,329 | 750,667 | ||||||
Hersha Hospitality Trust | 142,850 | 829,958 | ||||||
Pebblebrook Hotel Trust | 46,569 | 1,603,836 | ||||||
Summit Hotel Properties, Inc. | 61,409 | 556,366 | ||||||
Sunstone Hotel Investors, Inc. | 133,024 | 1,903,573 | ||||||
Total Hotel REITs | 7,143,725 | |||||||
Mortgage REITs — 23.4% | ||||||||
AG Mortgage Investment Trust, Inc. | 20,701 | 366,201 | ||||||
Anworth Mortgage Asset Corp. | 99,673 | 538,234 | ||||||
Apollo Commercial Real Estate | ||||||||
Finance, Inc. | 27,185 | 462,417 | ||||||
Apollo Residential Mortgage, Inc. | 22,438 | 362,374 | ||||||
Arbor Realty Trust, Inc. | 27,729 | 194,380 | ||||||
Ares Commercial Real Estate Corp. | 19,203 | 245,030 | ||||||
ARMOUR Residential REIT, Inc. | 261,209 | 1,107,526 | ||||||
Colony Financial, Inc. | 66,441 | 1,445,092 | ||||||
Dynex Capital, Inc. | 37,212 | 319,279 | ||||||
Gramercy Property Trust, Inc.(a) | 43,206 | 225,535 | ||||||
Invesco Mortgage Capital | 91,177 | 1,519,921 | ||||||
iStar Financial, Inc.* | 57,825 | 859,279 | ||||||
New Residential Investment Corp. | 183,740 | 1,120,814 | ||||||
New York Mortgage Trust, Inc. | 54,819 | 404,016 | ||||||
Newcastle Investment Corp. | 254,679 | 1,143,509 | ||||||
PennyMac Mortgage Investment Trust | 48,594 | 1,139,043 | ||||||
RAIT Financial Trust(a) | 59,188 | 484,158 | ||||||
Western Asset Mortgage Capital Corp. | 18,976 | 280,276 | ||||||
Total Mortgage REITs | 12,217,084 | |||||||
Office REITs — 17.0% | ||||||||
Brandywine Realty Trust | 113,810 | 1,655,935 | ||||||
First Industrial Realty Trust, Inc. | 78,794 | 1,447,446 | ||||||
First Potomac Realty Trust | 42,225 | 550,192 | ||||||
Franklin Street Properties Corp. | 66,932 | 815,232 | ||||||
Government Properties Income Trust | 40,292 | 1,025,431 | ||||||
Hudson Pacific Properties, Inc. | 39,181 | 922,713 | ||||||
Lexington Realty Trust | 138,972 | 1,495,339 | ||||||
Parkway Properties, Inc. | 51,445 | 970,253 | ||||||
Total Office REITs | 8,882,541 | |||||||
Residential REITs — 4.5% | ||||||||
American Residential Properties, Inc.*(a) | 23,601 | 424,110 | ||||||
Associated Estates Realty Corp. | 39,336 | 660,058 | ||||||
Education Realty Trust, Inc. | 84,087 | 857,687 | ||||||
Silver Bay Realty Trust Corp. | 26,679 | 399,651 | ||||||
Total Residential REITs | 2,341,506 |
Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Retail REITs — 11.8% | ||||||||
Acadia Realty Trust | 40,753 | $ | 1,105,629 | |||||
Cedar Realty Trust, Inc. | 52,721 | 326,343 | ||||||
Glimcher Realty Trust | 104,840 | 1,068,320 | ||||||
Inland Real Estate Corp. | 63,884 | 667,588 | ||||||
Kite Realty Group Trust | 95,657 | 593,073 | ||||||
Pennsylvania Real Estate Investment | ||||||||
Trust | 48,305 | 799,448 | ||||||
Ramco-Gershenson Properties Trust | 48,250 | 795,160 | ||||||
Retail Opportunity Investments Corp. | 51,993 | 813,170 | ||||||
Total Retail REITs | 6,168,731 | |||||||
Specialized REITs — 15.2% | ||||||||
Aviv REIT, Inc. | 11,524 | 304,118 | ||||||
Campus Crest Communities, Inc. | 47,039 | 405,006 | ||||||
CubeSmart | 98,045 | 1,823,637 | ||||||
CyrusOne, Inc. | 13,684 | 273,680 | ||||||
DCT Industrial Trust, Inc. | 238,640 | 1,866,165 | ||||||
Medical Properties Trust, Inc. | 121,472 | 1,639,872 | ||||||
Sabra Health Care REIT, Inc. | 28,037 | 840,269 | ||||||
STAG Industrial, Inc. | 33,045 | 777,549 | ||||||
Total Specialized REITs | 7,930,296 | |||||||
Total Common Stocks — 99.4% | ||||||||
(Cost $51,095,713) | 51,852,160 | |||||||
Short-Term Investment — 0.5% | ||||||||
Money Market Fund — 0.5% | ||||||||
Morgan Stanley Institutional Liquidity | ||||||||
Funds Treasury Portfolio — Institutional | ||||||||
Class, 0.03%(b) | ||||||||
(Cost $269,412) | 269,412 | 269,412 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 3.6% | ||||||||
Money Market Fund — 3.6% | ||||||||
BNY Mellon Overnight Government | ||||||||
Fund, 0.06%(c) | ||||||||
(Cost $1,872,881) | 1,872,881 | 1,872,881 | ||||||
Total Investments — 103.5% | ||||||||
(Cost $53,238,006) | $ | 53,994,453 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (3.5)% | (1,848,606 | ) | ||||||
Net Assets — 100.0% | $ | 52,145,847 |
* | Non-income producing securities. |
(a) | All or a portion of the security was on loan. The aggregate market value of securities on loan was $1,813,262; total market value of collateral held by the Fund was $1,872,881. |
(b) | Rate shown reflects the 7-day yield at April 30, 2014. |
(c) | Rate shown reflects the 1-day yield at April 30, 2014. |
REIT — Real Estate Investment Trusts
See notes to financial statements.
48 |
Statements of Assets and Liabilities |
April 30, 2014 |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | IQ Hedge Market Neutral Tracker ETF | IQ Real Return ETF | IQ Global Resources ETF | IQ Merger Arbitrage ETF | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Investments, at cost: | $ | 798,280,095 | $ | 35,213,058 | $ | 16,804,524 | $ | 30,593,274 | $ | 89,432,982 | $ | 33,286,768 | ||||||||||||
Investments, at value (including | ||||||||||||||||||||||||
securities on loan)1 | $ | 805,300,132 | $ | 35,010,619 | $ | 16,767,138 | $ | 30,983,956 | $ | 87,581,404 | $ | 33,540,302 | ||||||||||||
Cash | — | — | — | — | — | 48 | ||||||||||||||||||
Due from Broker | 4,977,010 | 5,749 | 148,327 | — | 1,936 | — | ||||||||||||||||||
Foreign currency2 | — | — | — | — | 27,796 | 11,375 | ||||||||||||||||||
Cash deposited at broker for | ||||||||||||||||||||||||
futures collateral | — | — | — | — | 892,135 | 678,880 | ||||||||||||||||||
Cash deposited at broker for | ||||||||||||||||||||||||
swap collateral | 16,379,724 | 113,760 | 207,654 | — | — | — | ||||||||||||||||||
Dividend, interest and reclaims | ||||||||||||||||||||||||
receivable | 22,360 | 4,463 | 236 | 2,450 | 166,354 | 8,913 | ||||||||||||||||||
Receivable for investments sold | — | — | — | — | — | 1,138,622 | ||||||||||||||||||
Total Assets | 826,679,226 | 35,134,591 | 17,123,355 | 30,986,406 | 88,669,625 | 35,378,140 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Collateral for securities on loan | 101,789,915 | 8,545,373 | 338,015 | 4,646,248 | 3,839,457 | 1,452,560 | ||||||||||||||||||
Due to broker | 1,607,837 | 64,849 | 22,494 | — | 1,944 | — | ||||||||||||||||||
Advisory fees payable | 434,772 | 16,372 | 10,265 | 10,359 | 52,280 | 19,778 | ||||||||||||||||||
Trustee fees payable | 2,611 | 161 | 77 | 429 | 359 | 120 | ||||||||||||||||||
Compliance fees payable | 388 | 108 | 24 | 314 | — | 16 | ||||||||||||||||||
Variation margin payable | — | — | — | — | 56,725 | 43,280 | ||||||||||||||||||
Accrued expenses and other | ||||||||||||||||||||||||
liabilities | 67 | 3,444 | 4,180 | 50 | 253 | 50 | ||||||||||||||||||
Total Liabilities | 103,835,590 | 8,630,307 | 375,055 | 4,657,400 | 3,951,018 | 1,515,804 | ||||||||||||||||||
Net Assets | $ | 722,843,636 | $ | 26,504,284 | $ | 16,748,300 | $ | 26,329,006 | $ | 84,718,607 | $ | 33,862,336 | ||||||||||||
Composition of Net Assets | ||||||||||||||||||||||||
Paid-in capital | $ | 736,770,092 | $ | 31,554,308 | $ | 16,966,333 | $ | 27,642,706 | $ | 113,011,827 | $ | 36,257,741 | ||||||||||||
Undistributed (accumulated) net | ||||||||||||||||||||||||
investment income (loss) | 7,243,480 | 46,042 | 221,070 | 3,584 | 1,139,367 | (22,005 | ) | |||||||||||||||||
Undistributed (accumulated) net | ||||||||||||||||||||||||
realized gain (loss) on | ||||||||||||||||||||||||
investments, swap transactions, | ||||||||||||||||||||||||
futures contracts and foreign | ||||||||||||||||||||||||
currency translations | (28,189,973 | ) | (4,893,627 | ) | (401,717 | ) | (1,707,966 | ) | (27,368,940 | ) | (2,474,112 | ) | ||||||||||||
Net unrealized appreciation | ||||||||||||||||||||||||
(depreciation) on investments, | ||||||||||||||||||||||||
swap transactions, futures | ||||||||||||||||||||||||
contracts and foreign currency | ||||||||||||||||||||||||
translations | 7,020,037 | (202,439 | ) | (37,386 | ) | 390,682 | (2,063,647 | ) | 100,712 | |||||||||||||||
Net Assets | $ | 722,843,636 | $ | 26,504,284 | $ | 16,748,300 | $ | 26,329,006 | $ | 84,718,607 | $ | 33,862,336 | ||||||||||||
NET ASSET VALUE PER SHARE | ||||||||||||||||||||||||
Shares Outstanding (no par value, | ||||||||||||||||||||||||
unlimited shares authorized) | 24,700,000 | 1,000,000 | 650,000 | 1,000,000 | 2,900,000 | 1,250,000 | ||||||||||||||||||
Net Asset Value | $ | 29.26 | $ | 26.50 | $ | 25.77 | $ | 26.33 | $ | 29.21 | $ | 27.09 | ||||||||||||
1 Market value of securities on loan: | $ | 100,489,810 | $ | 8,394,586 | $ | 329,492 | $ | 6,718,173 | $ | 3,618,898 | $ | 1,376,777 | ||||||||||||
2 Cost of foreign currency: | $ | — | $ | — | $ | — | $ | — | $ | 27,658 | $ | 12,112 |
See notes to financial statements.
49 |
Statements of Assets and Liabilities (continued) |
April 30, 2014 |
IQ Australia Small Cap ETF | IQ Canada Small Cap ETF | IQ Global Agribusiness Small Cap ETF | ||||||||||
Assets | ||||||||||||
Investments, at cost: | $ | 9,900,638 | $ | 19,475,407 | $ | 28,844,026 | ||||||
Investments, at value (including securities on loan)1 | $ | 9,281,467 | $ | 17,949,283 | $ | 28,099,409 | ||||||
Foreign currency2 | 126,160 | 140,487 | 506 | |||||||||
Dividend, interest and reclaims receivable | 18,092 | 18,497 | 101,875 | |||||||||
Total Assets | 9,425,719 | 18,108,267 | 28,201,790 | |||||||||
Liabilities | ||||||||||||
Collateral for securities on loan | 724,700 | 1,436,288 | 2,613,437 | |||||||||
Due to custodian | 46,839 | — | — | |||||||||
Advisory fees payable | 5,329 | 9,267 | 15,797 | |||||||||
Trustee fees payable | 42 | 71 | 164 | |||||||||
Compliance fees payable | 20 | 91 | 185 | |||||||||
Accrued expenses and other liabilities | 50 | 50 | 50 | |||||||||
Total Liabilities | 776,980 | 1,445,767 | 2,629,633 | |||||||||
Net Assets | $ | 8,648,739 | $ | 16,662,500 | $ | 25,572,157 | ||||||
Composition of Net Assets | ||||||||||||
Paid-in capital | $ | 16,144,946 | $ | 33,245,112 | $ | 32,269,195 | ||||||
Undistributed (accumulated) net investment income (loss) | 157,260 | (260,163 | ) | 32,539 | ||||||||
Undistributed (accumulated) net realized gain (loss) on investments, | ||||||||||||
swap transactions, futures contracts and foreign currency translations | (7,034,213 | ) | (14,797,241 | ) | (5,985,024 | ) | ||||||
Net unrealized appreciation (depreciation) on investments, swap | ||||||||||||
transactions, futures contracts and foreign currency translations | (619,254 | ) | (1,525,208 | ) | (744,553 | ) | ||||||
Net Assets | $ | 8,648,739 | $ | 16,662,500 | $ | 25,572,157 | ||||||
NET ASSET VALUE PER SHARE | ||||||||||||
Shares Outstanding (no par value, unlimited shares authorized) | 450,000 | 700,000 | 950,000 | |||||||||
Net Asset Value | $ | 19.22 | $ | 23.80 | $ | 26.92 | ||||||
1 Market value of securities on loan: | $ | 680,081 | $ | 1,359,744 | $ | 2,416,098 | ||||||
2 Cost of foreign currency: | $ | 126,284 | $ | 138,900 | $ | 500 |
See notes to financial statements.
50 |
Statements of Assets and Liabilities (continued) |
April 30, 2014 |
IQ Global Oil Small Cap ETF | IQ U.S. Real Estate Small Cap ETF | |||||||
Assets | ||||||||
Investments, at cost: | $ | 2,318,074 | $ | 53,238,006 | ||||
Investments, at value (including securities on loan)1 | $ | 2,441,742 | $ | 53,994,453 | ||||
Foreign currency2 | 28,176 | — | ||||||
Dividend, interest and reclaims receivable | 3,581 | 54,284 | ||||||
Total Assets | 2,473,499 | 54,048,737 | ||||||
Liabilities | ||||||||
Collateral for securities on loan | 175,176 | 1,872,881 | ||||||
Due to custodian | 20,674 | — | ||||||
Advisory fees payable | 1,357 | 29,639 | ||||||
Compliance fees payable | 34 | 79 | ||||||
Trustee fees payable | 7 | 241 | ||||||
Accrued expenses and other liabilities | 50 | 50 | ||||||
Total Liabilities | 197,298 | 1,902,890 | ||||||
Net Assets | $ | 2,276,201 | $ | 52,145,847 | ||||
Composition of Net Assets | ||||||||
Paid-in capital | $ | 2,436,073 | $ | 53,292,101 | ||||
Undistributed (accumulated) net investment income (loss) | (6,304 | ) | 2,019 | |||||
Undistributed (accumulated) net realized gain (loss) on investments, swap transactions, | ||||||||
futures contracts and foreign currency translations | (277,655 | ) | (1,904,720 | ) | ||||
Net unrealized appreciation (depreciation) on investments, swap transactions, futures | ||||||||
contracts and foreign currency translations | 124,087 | 756,447 | ||||||
Net Assets | $ | 2,276,201 | $ | 52,145,847 | ||||
NET ASSET VALUE PER SHARE | ||||||||
Shares Outstanding (no par value, unlimited shares authorized) | 100,000 | 2,050,000 | ||||||
Net Asset Value | $ | 22.76 | $ | 25.44 | ||||
1 Market value of securities on loan: | $ | 156,467 | $ | 1,813,262 | ||||
2 Cost of foreign currency: | $ | 27,765 | $ | — |
See notes to financial statements.
51 |
Statements of Operations |
For the year ended April 30, 2014 |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | IQ Hedge Market Neutral Tracker ETF | IQ Real Return ETF | IQ Global Resources ETF | IQ Merger Arbitrage ETF | |||||||||||||||||||
Investment Income | ||||||||||||||||||||||||
Dividend income* | $ | 10,126,408 | $ | 678,545 | $ | 244,879 | $ | 302,605 | $ | 1,780,848 | $ | 178,626 | ||||||||||||
Securities lending income, net | 311,871 | 70,674 | 5,215 | 41,836 | 23,067 | 12,205 | ||||||||||||||||||
Total investment income | 10,438,279 | 749,219 | 250,094 | 344,441 | 1,803,915 | 190,831 | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Advisory fees | 4,081,566 | 264,794 | 134,757 | 195,809 | 613,416 | 162,740 | ||||||||||||||||||
Trustee fees | 11,951 | 983 | 423 | 1,215 | 1,959 | 485 | ||||||||||||||||||
Compliance fees | 5,506 | 439 | 195 | 626 | 910 | 225 | ||||||||||||||||||
Miscellaneous | 13 | 50 | 90 | 50 | 50 | 50 | ||||||||||||||||||
Total expenses | 4,099,036 | 266,266 | 135,465 | 197,700 | 616,335 | 163,500 | ||||||||||||||||||
Net investment income | 6,339,243 | 482,953 | 114,629 | 146,741 | 1,187,580 | 27,331 | ||||||||||||||||||
Realized and Unrealized Gain (Loss) | ||||||||||||||||||||||||
on Investments, Swap Transactions, | ||||||||||||||||||||||||
Futures Contracts and | ||||||||||||||||||||||||
Foreign Currency Translations | ||||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investment securities | (10,963,511 | ) | (715,195 | ) | (267,325 | ) | (1,367,653 | ) | (4,649,428 | ) | 758,008 | |||||||||||||
In-Kind redemptions | 23,323,216 | 654,366 | 484,949 | 660,872 | 7,302,519 | 1,675,735 | ||||||||||||||||||
Swap transactions | 7,225,793 | (96,605 | ) | 144,166 | — | — | — | |||||||||||||||||
Distributions from investments in | ||||||||||||||||||||||||
other investment companies | 183,605 | 24,508 | 12,128 | — | — | — | ||||||||||||||||||
Futures contracts | 18,599 | 23,067 | (36,770 | ) | — | (2,935,487 | ) | (889,736 | ) | |||||||||||||||
Foreign currency translations | — | — | — | — | (34,943 | ) | (11,128 | ) | ||||||||||||||||
Net realized gain (loss) | 19,787,702 | (109,859 | ) | 337,148 | (706,781 | ) | (317,339 | ) | 1,532,879 | |||||||||||||||
Net change in net unrealized | ||||||||||||||||||||||||
appreciation (depreciation) | ||||||||||||||||||||||||
Investment securities | (120,779 | ) | (1,206,499 | ) | (106,007 | ) | (165,221 | ) | 1,584,295 | (190,184 | ) | |||||||||||||
Futures contracts | (367,290 | ) | — | 6,863 | — | 436,421 | (21,007 | ) | ||||||||||||||||
Foreign currency translations | — | — | — | — | (1,939 | ) | (1,114 | ) | ||||||||||||||||
Net change in net unrealized | ||||||||||||||||||||||||
appreciation (depreciation) | (488,069 | ) | (1,206,499 | ) | (99,144 | ) | (165,221 | ) | 2,018,777 | (212,305 | ) | |||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gain (loss) | 19,299,633 | (1,316,358 | ) | 238,004 | (872,002 | ) | 1,701,438 | 1,320,574 | ||||||||||||||||
Net Increase (Decrease) in Net | ||||||||||||||||||||||||
Assets Resulting from Operations | $ | 25,638,876 | $ | (833,405 | ) | $ | 352,633 | $ | (725,261 | ) | $ | 2,889,018 | $ | 1,347,905 | ||||||||||
*Net of foreign taxes withheld of: | $ | — | $ | — | $ | — | $ | — | $ | 113,103 | $ | 3,166 |
See notes to financial statements.
52 |
Statements of Operations (continued) |
For the year ended April 30, 2014 |
IQ Australia Small Cap ETF | IQ Canada Small Cap ETF | IQ Global Agribusiness Small Cap ETF | ||||||||||
Investment Income | ||||||||||||
Dividend income* | $ | 327,760 | $ | 322,702 | $ | 637,513 | ||||||
Securities lending income, net | 13,986 | 5,230 | 43,400 | |||||||||
Total investment income | 341,746 | 327,932 | 680,913 | |||||||||
Expenses | ||||||||||||
Advisory fees | 66,807 | 109,790 | 250,169 | |||||||||
Trustee fees | 240 | 386 | 868 | |||||||||
Compliance fees | 113 | 178 | 406 | |||||||||
Miscellaneous | 50 | 50 | 114 | |||||||||
Total expenses | 67,210 | 110,404 | 251,557 | |||||||||
Net investment income | 274,536 | 217,528 | 429,356 | |||||||||
Realized and Unrealized Gain (Loss) on Investments, Swap Transactions, | ||||||||||||
Futures Contracts and Foreign Currency Translations | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investment securities | (2,240,684 | ) | (2,735,248 | ) | (2,107,976 | ) | ||||||
In-Kind redemptions | (227,373 | ) | (9,398 | ) | 2,840,452 | |||||||
Foreign currency translations | (29,904 | ) | (12,801 | ) | (18,883 | ) | ||||||
Net realized gain (loss) | (2,497,961 | ) | (2,757,447 | ) | 713,593 | |||||||
Net change in net unrealized appreciation (depreciation) | ||||||||||||
Investment securities | 1,085,796 | 4,498,425 | 143,235 | |||||||||
Foreign currency translations | 483 | (2,092 | ) | 2,093 | ||||||||
Net change in net unrealized appreciation (depreciation) | 1,086,279 | 4,496,333 | 145,328 | |||||||||
Net realized and unrealized gain (loss) | (1,411,682 | ) | 1,738,886 | 858,921 | ||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,137,146 | ) | $ | 1,956,414 | $ | 1,288,277 | |||||
*Net of foreign taxes withheld of: | $ | 5,011 | $ | 55,333 | $ | 44,793 |
See notes to financial statements.
53 |
Statements of Operations (continued) |
For the year ended April 30, 2014 |
IQ Global Oil Small Cap ETF | IQ U.S. Real Estate Small Cap ETF | |||||||
Investment Income | ||||||||
Dividend income* | $ | 33,768 | $ | 2,653,823 | ||||
Securities lending income, net | 469 | 12,062 | ||||||
Total investment income | 34,237 | 2,665,885 | ||||||
Expenses | ||||||||
Advisory fees | 15,197 | 328,178 | ||||||
Trustee fees | 48 | 1,298 | ||||||
Compliance fees | 22 | 562 | ||||||
Miscellaneous | 71 | 68 | ||||||
Total expenses | 15,338 | 330,106 | ||||||
Net investment income | 18,899 | 2,335,779 | ||||||
Realized and Unrealized Gain (Loss) on Investments, Swap Transactions, | ||||||||
Futures Contracts and Foreign Currency Translations | ||||||||
Net realized gain (loss) from: | ||||||||
Investment securities | (68,678 | ) | (1,162,177 | ) | ||||
In-Kind redemptions | 49,789 | 2,772,650 | ||||||
Foreign currency translations | (2,161 | ) | — | |||||
Net realized gain (loss) | (21,050 | ) | 1,610,473 | |||||
Net change in net unrealized appreciation (depreciation) | ||||||||
Investment securities | 357,109 | (5,011,453 | ) | |||||
Foreign currency translations | 257 | — | ||||||
Net change in net unrealized appreciation (depreciation) | 357,366 | (5,011,453 | ) | |||||
Net realized and unrealized gain (loss) | 336,316 | (3,400,980 | ) | |||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 355,215 | $ | (1,065,201 | ) | |||
*Net of foreign taxes withheld of: | $ | 3,543 | $ | — |
See notes to financial statements.
54 |
Statements of Changes in Net Assets |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | IQ Hedge Market Neutral Tracker ETF | IQ Real Return ETF | |||||||||||||||||||||||||||||
For the Year Ended April 30, | For the Year Ended April 30, | For the Year Ended April 30, | For the Period October 4, 2012* to April 30, | For the Year Ended April 30, | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Increase (Decrease) in Net Assets | ||||||||||||||||||||||||||||||||
from Operations | ||||||||||||||||||||||||||||||||
Net investment income | $ | 6,339,243 | $ | 3,400,363 | $ | 482,953 | $ | 708,941 | $ | 114,629 | $ | 13,968 | $ | 146,741 | $ | 97,779 | ||||||||||||||||
Net realized gain (loss) | 19,787,702 | 3,007,445 | (109,859 | ) | (864,699 | ) | 337,148 | 101,783 | (706,781 | ) | (24,077 | ) | ||||||||||||||||||||
Net change in net unrealized | ||||||||||||||||||||||||||||||||
appreciation (depreciation) | (488,069 | ) | 4,919,883 | (1,206,499 | ) | 134,728 | (99,144 | ) | 61,758 | (165,221 | ) | 412,304 | ||||||||||||||||||||
Net increase (decrease) in net assets | ||||||||||||||||||||||||||||||||
resulting from operations | 25,638,876 | 11,327,691 | (833,405 | ) | (21,030 | ) | 352,633 | 177,509 | (725,261 | ) | 486,006 | |||||||||||||||||||||
Dividends to Shareholders from: | ||||||||||||||||||||||||||||||||
Net investment income | (7,853,060 | ) | (3,493,395 | ) | (203,047 | ) | (678,020 | ) | (163,748 | ) | (19,014 | ) | (24,255 | ) | (23,359 | ) | ||||||||||||||||
Capital Share Transactions | ||||||||||||||||||||||||||||||||
Proceeds from shares created | 570,060,459 | 290,855,270 | 10,533,133 | 49,109,971 | 25,541,942 | 13,812,208 | 7,836,655 | 43,522,101 | ||||||||||||||||||||||||
Cost of shares redeemed | (248,503,915 | ) | (111,603,698 | ) | (46,217,676 | ) | (35,661,207 | ) | (14,119,595 | ) | (8,833,635 | ) | (41,712,193 | ) | (10,573,400 | ) | ||||||||||||||||
Net increase (decrease) from capital | ||||||||||||||||||||||||||||||||
share transactions | 321,556,544 | 179,251,572 | (35,684,543 | ) | 13,448,764 | 11,422,347 | 4,978,573 | (33,875,538 | ) | 32,948,701 | ||||||||||||||||||||||
Total increase (decrease) in | ||||||||||||||||||||||||||||||||
net assets | 339,342,360 | 187,085,868 | (36,720,995 | ) | 12,749,714 | 11,611,232 | 5,137,068 | (34,625,054 | ) | 33,411,348 | ||||||||||||||||||||||
Net Assets | ||||||||||||||||||||||||||||||||
Beginning of period | 383,501,276 | 196,415,408 | 63,225,279 | 50,475,565 | 5,137,068 | — | 60,954,060 | 27,542,712 | ||||||||||||||||||||||||
End of period | $ | 722,843,636 | $ | 383,501,276 | $ | 26,504,284 | $ | 63,225,279 | $ | 16,748,300 | $ | 5,137,068 | $ | 26,329,006 | $ | 60,954,060 | ||||||||||||||||
Including undistributed (accumulated) | ||||||||||||||||||||||||||||||||
net investment income (loss) | ||||||||||||||||||||||||||||||||
as follows: | $ | 7,243,480 | $ | (127,863 | ) | $ | 46,042 | $ | (252,752 | ) | $ | 221,002 | $ | (175 | ) | $ | 3,584 | $ | (173,363 | ) | ||||||||||||
Changes in Shares Outstanding | ||||||||||||||||||||||||||||||||
Shares outstanding, beginning | ||||||||||||||||||||||||||||||||
of period | 13,500,000 | 7,100,000 | 2,350,000 | 1,850,000 | 200,000 | — | 2,300,000 | 1,050,000 | ||||||||||||||||||||||||
Shares created | 19,800,000 | 10,400,000 | 400,000 | 1,800,000 | 1,000,000 | 550,000 | 300,000 | 1,650,000 | ||||||||||||||||||||||||
Shares redeemed | (8,600,000 | ) | (4,000,000 | ) | (1,750,000 | ) | (1,300,000 | ) | (550,000 | ) | (350,000 | ) | (1,600,000 | ) | (400,000 | ) | ||||||||||||||||
Shares outstanding, end of period | 24,700,000 | 13,500,000 | 1,000,000 | 2,350,000 | 650,000 | 200,000 | 1,000,000 | 2,300,000 |
* Commencement of operations.
See notes to financial statements.
55 |
Statements of Changes in Net Assets (continued) |
IQ Global Resources ETF | IQ Merger Arbitrage ETF | IQ Australia Small Cap ETF | ||||||||||||||||||||||
For the Year Ended April 30, | For the Year Ended April 30, | For the Year Ended April 30, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Increase (Decrease) in Net | ||||||||||||||||||||||||
Assets from Operations | ||||||||||||||||||||||||
Net investment income | $ | 1,187,580 | $ | 1,039,875 | $ | 27,331 | $ | 57,438 | $ | 274,536 | $ | 411,674 | ||||||||||||
Net realized gain (loss) | (317,339 | ) | 1,121,050 | 1,532,879 | (186,304 | ) | (2,497,961 | ) | (1,984,510 | ) | ||||||||||||||
Net change in net unrealized | ||||||||||||||||||||||||
appreciation (depreciation) | 2,018,777 | (3,155,769 | ) | (212,305 | ) | (618,999 | ) | 1,086,279 | 387,617 | |||||||||||||||
Net increase (decrease) | ||||||||||||||||||||||||
in net assets resulting | ||||||||||||||||||||||||
from operations | 2,889,018 | (994,844 | ) | 1,347,905 | (747,865 | ) | (1,137,146 | ) | (1,185,219 | ) | ||||||||||||||
Dividends to Shareholders from: | ||||||||||||||||||||||||
Net investment income | (881,676 | ) | (931,541 | ) | (237,312 | ) | (24,415 | ) | (359,750 | ) | (254,722 | ) | ||||||||||||
Capital Share Transactions | ||||||||||||||||||||||||
Proceeds from shares created | 66,157,512 | 95,451,489 | 40,021,900 | 3,815,973 | 931,445 | — | ||||||||||||||||||
Cost of shares redeemed | (68,956,992 | ) | (76,052,862 | ) | (21,348,239 | ) | (14,984,498 | ) | (4,655,665 | ) | (967,252 | ) | ||||||||||||
Net increase (decrease) from | ||||||||||||||||||||||||
capital share transactions | (2,799,480 | ) | 19,398,627 | 18,673,661 | (11,168,525 | ) | (3,724,220 | ) | (967,252 | ) | ||||||||||||||
Total increase (decrease) | ||||||||||||||||||||||||
in net assets | (792,138 | ) | 17,472,242 | 19,784,254 | (11,940,805 | ) | (5,221,116 | ) | (2,407,193 | ) | ||||||||||||||
Net Assets | ||||||||||||||||||||||||
Beginning of year | 85,510,745 | 68,038,503 | 14,078,082 | 26,018,887 | 13,869,855 | 16,277,048 | ||||||||||||||||||
End of year | $ | 84,718,607 | $ | 85,510,745 | $ | 33,862,336 | $ | 14,078,082 | $ | 8,648,739 | $ | 13,869,855 | ||||||||||||
Including undistributed | ||||||||||||||||||||||||
(accumulated) net investment | ||||||||||||||||||||||||
income (loss) as follows: | $ | 1,139,367 | $ | 845,771 | $ | (22,005 | ) | $ | 240,510 | $ | 157,260 | $ | 233,628 | |||||||||||
Changes in Shares Outstanding | ||||||||||||||||||||||||
Shares outstanding, beginning | ||||||||||||||||||||||||
of year | 3,000,000 | 2,350,000 | 550,000 | 1,000,000 | 650,000 | 700,000 | ||||||||||||||||||
Shares created | 2,300,000 | 3,250,000 | 1,500,000 | 150,000 | 50,000 | — | ||||||||||||||||||
Shares redeemed | (2,400,000 | ) | (2,600,000 | ) | (800,000 | ) | (600,000 | ) | (250,000 | ) | (50,000 | ) | ||||||||||||
Shares outstanding, | ||||||||||||||||||||||||
end of year | 2,900,000 | 3,000,000 | 1,250,000 | 550,000 | 450,000 | 650,000 |
See notes to financial statements.
56 |
Statements of Changes in Net Assets (continued) |
IQ Canada Small Cap ETF | IQ Global Agribusiness Small Cap ETF | IQ Global Oil Small Cap ETF | ||||||||||||||||||||||
For the Year Ended April 30, | For the Year Ended April 30, | For the Year Ended April 30, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Increase (Decrease) in Net | ||||||||||||||||||||||||
Assets from Operations | ||||||||||||||||||||||||
Net investment income | $ | 217,528 | $ | 267,741 | $ | 429,356 | $ | 446,023 | $ | 18,899 | $ | 22,621 | ||||||||||||
Net realized gain (loss) | (2,757,447 | ) | (6,683,254 | ) | 713,593 | (497,987 | ) | (21,050 | ) | (71,687 | ) | |||||||||||||
Net change in net unrealized | ||||||||||||||||||||||||
appreciation (depreciation) | 4,496,333 | 2,320,164 | 145,328 | 2,660,753 | 357,366 | 168,608 | ||||||||||||||||||
Net increase (decrease) | ||||||||||||||||||||||||
in net assets resulting | ||||||||||||||||||||||||
from operations | 1,956,414 | (4,095,349 | ) | 1,288,277 | 2,608,789 | 355,215 | 119,542 | |||||||||||||||||
Dividends to Shareholders from: | ||||||||||||||||||||||||
Net investment income | (232,680 | ) | (739,738 | ) | (569,025 | ) | (519,028 | ) | (15,442 | ) | (45,351 | ) | ||||||||||||
Capital Share Transactions | ||||||||||||||||||||||||
Proceeds from shares created | — | — | 7,949,938 | 7,431,880 | 920,290 | 3,527,959 | ||||||||||||||||||
Cost of shares redeemed | (1,042,622 | ) | (10,592,646 | ) | (20,074,172 | ) | (12,253,168 | ) | (920,290 | ) | (4,302,358 | ) | ||||||||||||
Net increase (decrease) from | ||||||||||||||||||||||||
capital share transactions | (1,042,622 | ) | (10,592,646 | ) | (12,124,234 | ) | (4,821,288 | ) | — | (774,399 | ) | |||||||||||||
Total increase (decrease) | ||||||||||||||||||||||||
in net assets | 681,112 | (15,427,733 | ) | (11,404,982 | ) | (2,731,527 | ) | 339,773 | (700,208 | ) | ||||||||||||||
Net Assets | ||||||||||||||||||||||||
Beginning of year | 15,981,388 | 31,409,121 | 36,977,139 | 39,708,666 | 1,936,428 | 2,636,636 | ||||||||||||||||||
End of year | $ | 16,662,500 | $ | 15,981,388 | $ | 25,572,157 | $ | 36,977,139 | $ | 2,276,201 | $ | 1,936,428 | ||||||||||||
Including undistributed | ||||||||||||||||||||||||
(accumulated) net investment | ||||||||||||||||||||||||
income (loss) as follows: | $ | (260,163 | ) | $ | (305,329 | ) | $ | 32,539 | $ | 44,802 | $ | (6,304 | ) | $ | (8,198 | ) | ||||||||
Changes in Shares Outstanding | ||||||||||||||||||||||||
Shares outstanding, beginning | ||||||||||||||||||||||||
of year | 750,000 | 1,200,000 | 1,400,000 | 1,600,000 | 100,000 | 150,000 | ||||||||||||||||||
Shares created | — | — | 300,000 | 300,000 | 50,000 | 200,000 | ||||||||||||||||||
Shares redeemed | (50,000 | ) | (450,000 | ) | (750,000 | ) | (500,000 | ) | (50,000 | ) | (250,000 | ) | ||||||||||||
Shares outstanding, | ||||||||||||||||||||||||
end of year | 700,000 | 750,000 | 950,000 | 1,400,000 | 100,000 | 100,000 |
See notes to financial statements.
57 |
Statements of Changes in Net Assets (continued) |
IQ U.S. Real Estate Small Cap ETF | ||||||||
For the Year Ended April 30, | ||||||||
2014 | 2013 | |||||||
Increase (Decrease) in Net Assets from Operations | ||||||||
Net investment income | $ | 2,335,779 | $ | 1,019,402 | ||||
Net realized gain | 1,610,473 | 4,695,817 | ||||||
Net change in net unrealized appreciation (depreciation) | (5,011,453 | ) | 3,970,967 | |||||
Net increase (decrease) in net assets resulting from operations | (1,065,201 | ) | 9,686,186 | |||||
Dividends and Distributions Shareholders from: | ||||||||
Net investment income | (2,286,196 | ) | (1,240,905 | ) | ||||
Return of Capital | (1,208,211 | ) | — | |||||
Total Dividends and Distributions | (3,494,407 | ) | (1,240,905 | ) | ||||
Capital Share Transactions | ||||||||
Proceeds from shares created | 27,755,277 | 58,516,286 | ||||||
Cost of shares redeemed | (29,241,447 | ) | (41,438,793 | ) | ||||
Net increase (decrease) from capital share transactions | (1,486,170 | ) | 17,077,493 | |||||
Total increase (decrease) in net assets | (6,045,778 | ) | 25,522,774 | |||||
Net Assets | ||||||||
Beginning of year | 58,191,625 | 32,668,851 | ||||||
End of year | $ | 52,145,847 | $ | 58,191,625 | ||||
Including undistributed (accumulated) net investment income (loss) as follows: | $ | 2,019 | $ | — | ||||
Changes in Shares Outstanding | ||||||||
Shares outstanding, beginning of year | 2,150,000 | 1,600,000 | ||||||
Shares created | 1,100,000 | 2,450,000 | ||||||
Shares redeemed | (1,200,000 | ) | (1,900,000 | ) | ||||
Shares outstanding, end of year | 2,050,000 | 2,150,000 |
See notes to financial statements.
58 |
Financial Highlights |
Selected Data for a Share of Capital Stock Outstanding |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | |||||||||||||||||||||||||||||||||||||||
For the Year Ended April 30, | For the Year Ended April 30, | For the Period June 8, 20091 to April 30, 2010 | ||||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||
Net asset value, beginning | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 28.41 | $ | 27.66 | $ | 27.86 | $ | 27.21 | $ | 25.41 | $ | 26.90 | $ | 27.28 | $ | 28.30 | $ | 26.54 | $ | 25.00 | ||||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||||||
Net Investment Income2 | 0.33 | 0.34 | 0.43 | 0.61 | 0.52 | 0.36 | 0.38 | 0.39 | 0.38 | 0.26 | ||||||||||||||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||||||||||||||||||
gain (loss) on investments | 0.88 | 0.69 | (0.27 | ) | 0.45 | 1.51 | (0.62 | ) | (0.29 | ) | (1.14 | ) | 1.53 | 1.53 | ||||||||||||||||||||||||||
Distributions of net realized gains from investments in other investment companies | 0.01 | 0.03 | 0.01 | 0.003 | — | 0.02 | 0.01 | 0.00 | 3 | 0.00 | 3 | — | ||||||||||||||||||||||||||||
Net increase (decrease) in | ||||||||||||||||||||||||||||||||||||||||
net assets resulting from | �� | |||||||||||||||||||||||||||||||||||||||
investment operations | 1.22 | 1.06 | 0.17 | 1.06 | 2.03 | (0.24 | ) | 0.10 | (0.75 | ) | 1.91 | 1.79 | ||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.37 | ) | (0.31 | ) | (0.37 | ) | (0.41 | ) | (0.23 | ) | (0.16 | ) | (0.48 | ) | (0.27 | ) | (0.15 | ) | (0.25 | ) | ||||||||||||||||||||
Total distributions from net | ||||||||||||||||||||||||||||||||||||||||
investment income and | ||||||||||||||||||||||||||||||||||||||||
realized gains | (0.37 | ) | (0.31 | ) | (0.37 | ) | (0.41 | ) | (0.23 | ) | (0.16 | ) | (0.48 | ) | (0.27 | ) | (0.15 | ) | (0.25 | ) | ||||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||||||||||||||||||
end of period | $ | 29.26 | $ | 28.41 | $ | 27.66 | $ | 27.86 | $ | 27.21 | $ | 26.50 | $ | 26.90 | $ | 27.28 | $ | 28.30 | $ | 26.54 | ||||||||||||||||||||
Total Return | ||||||||||||||||||||||||||||||||||||||||
Total investment return based | ||||||||||||||||||||||||||||||||||||||||
on net asset value5 | 4.30 | %6 | 3.85 | % | 0.65 | % | 3.95 | % | 8.00 | % | (0.90 | )% | 0.36 | % | (2.61 | )% | 7.21 | % | 7.16 | % | ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | ||||||||||||||||||||||||||||||||||||||||
(000’s omitted) | $ | 722,844 | $ | 383,501 | $ | 196,415 | $ | 131,077 | $ | 92,639 | $ | 26,504 | $ | 63,225 | $ | 50,476 | $ | 28,302 | $ | 10,614 | ||||||||||||||||||||
Ratio to average net assets of: | ||||||||||||||||||||||||||||||||||||||||
Expenses | 0.75 | % | 0.75 | % | 0.75 | % | 0.77 | % | 0.77 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.77 | % | 0.76 | %7 | ||||||||||||||||||||
Net investment income | 1.16 | % | 1.22 | % | 1.57 | % | 2.23 | % | 1.93 | % | 1.37 | % | 1.39 | % | 1.44 | % | 1.41 | % | 1.10 | %7 | ||||||||||||||||||||
Portfolio turnover rate8 | 119 | % | 159 | % | 90 | % | 145 | % | 169 | % | 58 | % | 146 | % | 108 | % | 54 | % | 77 | % |
See footnotes on page 63
See notes to financial statements.
59 |
Financial Highlights (continued) |
Selected Data for a Share of Capital Stock Outstanding |
IQ Hedge Market Neutral Tracker ETF | IQ Real Return ETF | |||||||||||||||||||||||||||
For the Year Ended April 30, 2014 | For the Period October 4, 20121 to April 30, 2013 | For the Year Ended April 30, | For the Period October 26, 20091 to April 30, 2010 | |||||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.69 | $ | 24.98 | $ | 26.50 | $ | 26.23 | $ | 25.63 | $ | 24.99 | $ | 25.00 | ||||||||||||||
Income from Investment Operations | ||||||||||||||||||||||||||||
Net investment income (loss)2 | 0.16 | 0.06 | 0.09 | 0.06 | (0.01 | ) | (0.08 | ) | (0.02 | ) | ||||||||||||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||||||||||||
on investments | 0.12 | 0.68 | (0.23 | ) | 0.23 | 0.66 | 0.72 | 0.01 | ||||||||||||||||||||
Distributions of net realized gains | ||||||||||||||||||||||||||||
from investments in other | ||||||||||||||||||||||||||||
investment companies | 0.02 | 0.03 | — | — | — | — | — | |||||||||||||||||||||
Net increase (decrease) in net assets | ||||||||||||||||||||||||||||
resulting from investment operations | 0.30 | 0.77 | (0.14 | ) | 0.29 | 0.65 | 0.64 | (0.01 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.22 | ) | (0.06 | ) | (0.03 | ) | (0.02 | ) | — | (0.00 | )4 | — | ||||||||||||||||
Net realized gains | — | — | — | — | (0.05 | ) | — | — | ||||||||||||||||||||
Total distributions from net investment | ||||||||||||||||||||||||||||
income and realized gains | (0.22 | ) | (0.06 | ) | (0.03 | ) | (0.02 | ) | (0.05 | ) | (0.00 | )4 | — | |||||||||||||||
Net asset value, end of period | $ | 25.77 | $ | 25.69 | $ | 26.33 | $ | 26.50 | $ | 26.23 | $ | 25.63 | $ | 24.99 | ||||||||||||||
Total Return | ||||||||||||||||||||||||||||
Total investment return based on | ||||||||||||||||||||||||||||
net asset value5 | 1.17 | % | 3.10 | % | (0.54 | )% | 1.09 | % | 2.56 | % | 2.58 | % | (0.04 | )% | ||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 16,748 | $ | 5,137 | $ | 26,329 | $ | 60,954 | $ | 27,543 | $ | 12,815 | $ | 13,744 | ||||||||||||||
Ratio to average net assets of: | ||||||||||||||||||||||||||||
Expenses | 0.75 | % | 0.76 | %7 | 0.48 | % | 0.48 | % | 0.48 | % | 0.49 | % | 0.50 | %7 | ||||||||||||||
Net investment income (loss) | 0.64 | % | 0.40 | %7 | 0.36 | % | 0.23 | % | (0.05 | )% | (0.32 | )% | (0.14 | )%7 | ||||||||||||||
Portfolio turnover rate8 | 51 | % | 29 | % | 45 | % | 72 | % | 62 | % | 52 | % | 44 | % |
See footnotes on page 63
See notes to financial statements.
60 |
Financial Highlights (continued) |
Selected Data for a Share of Capital Stock Outstanding |
IQ Global Resources ETF | IQ Merger Arbitrage ETF | |||||||||||||||||||||||||||||||||||||||
For the Year Ended April 30, | For the Period October 26, 20091 to April 30, 2010 | For the Year Ended April 30, | For the Period November 16, 20091 to April 30, 2010 | |||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||
Net asset value, beginning | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 28.50 | $ | 28.95 | $ | 33.27 | $ | 27.50 | $ | 25.00 | $ | 25.60 | $ | 26.02 | $ | 25.47 | $ | 26.34 | $ | 25.00 | ||||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)2 | 0.41 | 0.40 | 0.39 | 0.29 | 0.12 | 0.03 | 0.09 | (0.03 | ) | 0.01 | 0.03 | |||||||||||||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||||||||||||||||||
gain (loss) on investments | 0.61 | (0.48 | ) | (4.17 | ) | 5.78 | 2.42 | 1.72 | (0.46 | ) | 0.58 | (0.55 | ) | 1.31 | ||||||||||||||||||||||||||
Net increase (decrease) in | ||||||||||||||||||||||||||||||||||||||||
net assets resulting from | ||||||||||||||||||||||||||||||||||||||||
investment operations | 1.02 | (0.08 | ) | (3.78 | ) | 6.07 | 2.54 | 1.75 | (0.37 | ) | 0.55 | (0.54 | ) | 1.34 | ||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.31 | ) | (0.37 | ) | (0.20 | ) | (0.12 | ) | (0.04 | ) | (0.26 | ) | (0.05 | ) | — | (0.01 | ) | (0.00 | )4 | |||||||||||||||||||||
Net realized gains | — | — | (0.34 | ) | (0.18 | ) | — | — | — | — | (0.32 | ) | — | |||||||||||||||||||||||||||
Total distributions from net | ||||||||||||||||||||||||||||||||||||||||
investment income and | ||||||||||||||||||||||||||||||||||||||||
realized gains | (0.31 | ) | (0.37 | ) | (0.54 | ) | (0.30 | ) | (0.04 | ) | (0.26 | ) | (0.05 | ) | — | (0.33 | ) | (0.00 | )4 | |||||||||||||||||||||
Net asset value, end | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 29.21 | $ | 28.50 | $ | 28.95 | $ | 33.27 | $ | 27.50 | $ | 27.09 | $ | 25.60 | $ | 26.02 | $ | 25.47 | $ | 26.34 | ||||||||||||||||||||
Total Return | ||||||||||||||||||||||||||||||||||||||||
Total investment return | ||||||||||||||||||||||||||||||||||||||||
based on net | ||||||||||||||||||||||||||||||||||||||||
asset value5 | 3.61 | %6 | (0.35 | )% | (11.30 | )% | 22.17 | % | 10.18 | % | 6.88 | % | (1.42 | )% | 2.16 | % | (2.03 | )% | 5.37 | % | ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | ||||||||||||||||||||||||||||||||||||||||
(000’s omitted) | $ | 84,719 | $ | 85,511 | $ | 68,039 | $ | 79,854 | $ | 8,249 | $ | 33,862 | $ | 14,078 | $ | 26,019 | $ | 22,921 | $ | 31,602 | ||||||||||||||||||||
Ratio to average net | ||||||||||||||||||||||||||||||||||||||||
assets of: | ||||||||||||||||||||||||||||||||||||||||
Expenses | 0.75 | % | 0.76 | % | 0.75 | % | 0.76 | % | 0.79 | %7 | 0.75 | % | 0.76 | % | 0.75 | % | 0.76 | % | 0.77 | %7 | ||||||||||||||||||||
Net investment income (loss) | 1.45 | % | 1.39 | % | 1.31 | % | 0.94 | % | 0.93 | %7 | 0.13 | % | 0.36 | % | (0.11 | )% | 0.04 | % | 0.22 | %7 | ||||||||||||||||||||
Portfolio turnover rate8 | 116 | % | 119 | % | 178 | % | 117 | % | 158 | % | 353 | % | 374 | % | 365 | % | 365 | % | 141 | % |
See footnotes on page 63
See notes to financial statements.
61 |
Financial Highlights (continued) |
Selected Data for a Share of Capital Stock Outstanding |
IQ Australia Small Cap ETF | IQ Canada Small Cap ETF | |||||||||||||||||||||||||||||||||||||||
For the Year Ended April 30, | For the Period March 22, 20101 to April 30, 2010 | For the Year Ended April 30, | For the Period March 22, 20101 to April 30, 2010 | |||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||
Net asset value, beginning | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 21.34 | $ | 23.25 | $ | 30.94 | $ | 25.64 | $ | 25.00 | $ | 21.31 | $ | 26.17 | $ | 35.44 | $ | 26.02 | $ | 25.00 | ||||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||||||||||||||
(loss)2 | 0.53 | 0.62 | 0.64 | 1.03 | 0.03 | 0.29 | 0.28 | 0.16 | 0.14 | (0.01 | ) | |||||||||||||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||||||||||||||||||
gain (loss) on investments | (1.93 | ) | (2.14 | ) | (5.71 | ) | 4.76 | 0.61 | 2.51 | (4.27 | ) | (9.12 | ) | 9.75 | 1.03 | |||||||||||||||||||||||||
Net increase (decrease) in | ||||||||||||||||||||||||||||||||||||||||
net assets resulting from | ||||||||||||||||||||||||||||||||||||||||
investment operations | (1.40 | ) | (1.52 | ) | (5.07 | ) | 5.79 | 0.64 | 2.80 | (3.99 | ) | (8.96 | ) | 9.89 | 1.02 | |||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.72 | ) | (0.39 | ) | (1.77 | ) | (0.45 | ) | — | (0.31 | ) | (0.87 | ) | (0.31 | ) | (0.47 | ) | — | ||||||||||||||||||||||
Net realized gains | — | — | (0.85 | ) | (0.04 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Total distributions from net | ||||||||||||||||||||||||||||||||||||||||
investment income and | ||||||||||||||||||||||||||||||||||||||||
realized gains | (0.72 | ) | (0.39 | ) | (2.62 | ) | (0.49 | ) | — | (0.31 | ) | (0.87 | ) | (0.31 | ) | (0.47 | ) | — | ||||||||||||||||||||||
Net asset value, end | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 19.22 | $ | 21.34 | $ | 23.25 | $ | 30.94 | $ | 25.64 | $ | 23.80 | $ | 21.31 | $ | 26.17 | $ | 35.44 | $ | 26.02 | ||||||||||||||||||||
Total Return | �� | |||||||||||||||||||||||||||||||||||||||
Total investment return based | ||||||||||||||||||||||||||||||||||||||||
on net asset value5 | (6.32 | )% | (6.51 | )% | (15.08 | )% | 22.71 | % | 2.56 | % | 13.32 | % | (15.49 | )% | (25.24 | )% | 38.15 | % | 4.08 | % | ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | ||||||||||||||||||||||||||||||||||||||||
(000’s omitted) | $ | 8,649 | $ | 13,870 | $ | 16,277 | $ | 43,323 | $ | 8,973 | $ | 16,663 | $ | 15,981 | $ | 31,409 | $ | 120,492 | $ | 9,107 | ||||||||||||||||||||
Ratio to average net | ||||||||||||||||||||||||||||||||||||||||
assets of: | ||||||||||||||||||||||||||||||||||||||||
Expenses | 0.69 | % | 0.69 | % | 0.69 | % | 0.69 | % | 0.71 | %7 | 0.69 | % | 0.70 | % | 0.69 | % | 0.69 | % | 0.71 | %7 | ||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||||||||||||||
(loss) | 2.84 | % | 2.98 | % | 2.49 | % | 3.72 | % | 1.09 | %7 | 1.37 | % | 1.21 | % | 0.55 | % | 0.44 | % | (0.20 | )%7 | ||||||||||||||||||||
Portfolio turnover rate8 | 31 | % | 29 | % | 42 | % | 49 | % | 0 | % | 38 | % | 41 | % | 37 | % | 52 | % | 0 | % |
See footnotes on page 63
See notes to financial statements.
62 |
Financial Highlights (continued) |
Selected Data for a Share of Capital Stock Outstanding |
IQ Global Agribusiness Small Cap ETF | IQ Global Oil Small Cap ETF | IQ U.S. Real Estate Small Cap ETF | ||||||||||||||||||||||||||||||||||||||
For the Year Ended April 30, | For the Period March 21, 20111 to April 30, 2011 | For the Year Ended April 30, | For the Period May 4, 20111 to April 30, 2012 | For the Year Ended April 30, | For the Period June 13, 20111 to April 30, 2012 | |||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||
Net asset value, beginning | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 26.41 | $ | 24.82 | $ | 27.42 | $ | 25.40 | $ | 19.36 | $ | 17.58 | $ | 19.56 | $ | 27.07 | $ | 20.42 | $ | 19.91 | ||||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.35 | 0.31 | 0.22 | 0.06 | 0.19 | 0.15 | 0.21 | 1.22 | 0.83 | 0.73 | ||||||||||||||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||||||||||||||||||
gain (loss) on investments | 0.58 | 1.64 | (2.61 | ) | 1.96 | 3.36 | 1.93 | (2.07 | ) | (0.96 | ) | 7.00 | 0.37 | |||||||||||||||||||||||||||
Net increase (decrease) in | ||||||||||||||||||||||||||||||||||||||||
net assets resulting from | ||||||||||||||||||||||||||||||||||||||||
investment operations | 0.93 | 1.95 | (2.39 | ) | 2.02 | 3.55 | 2.08 | (1.86 | ) | 0.26 | 7.83 | 1.10 | ||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment income | (0.42 | ) | (0.36 | ) | (0.21 | ) | — | (0.15 | ) | (0.30 | ) | (0.12 | ) | (1.24 | ) | (1.18 | ) | (0.59 | ) | |||||||||||||||||||||
Net realized gains | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Return of capital | — | — | — | — | — | — | — | (0.65 | ) | — | — | |||||||||||||||||||||||||||||
Total distributions from net | ||||||||||||||||||||||||||||||||||||||||
investment income and | ||||||||||||||||||||||||||||||||||||||||
realized gains | (0.42 | ) | (0.36 | ) | (0.21 | ) | — | (0.15 | ) | (0.30 | ) | (0.12 | ) | (1.89 | ) | (1.18 | ) | (0.59 | ) | |||||||||||||||||||||
Net asset value, end | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 26.92 | $ | 26.41 | $ | 24.82 | $ | 27.42 | $ | 22.76 | $ | 19.36 | $ | 17.58 | $ | 25.44 | $ | 27.07 | $ | 20.42 | ||||||||||||||||||||
Total Return | ||||||||||||||||||||||||||||||||||||||||
Total investment return based | ||||||||||||||||||||||||||||||||||||||||
on net asset value5 | 3.50 | % | 7.91 | % | (8.64 | )% | 7.95 | % | 18.44 | % | 12.09 | % | (9.40 | )% | 1.65 | % | 39.85 | % | 6.05 | % | ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | ||||||||||||||||||||||||||||||||||||||||
(000’s omitted) | $ | 25,572 | $ | 36,977 | $ | 39,709 | $ | 54,839 | $ | 2,276 | $ | 1,936 | $ | 2,637 | $ | 52,146 | $ | 58,192 | $ | 32,669 | ||||||||||||||||||||
Ratio to average net assets of: | ||||||||||||||||||||||||||||||||||||||||
Expenses | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | %7 | 0.76 | % | 0.76 | % | 0.75 | %6 | 0.69 | % | 0.69 | % | 0.69 | %7 | ||||||||||||||||||||
Net investment income | 1.29 | % | 1.24 | % | 0.89 | % | 1.96 | %7 | 0.93 | % | 0.86 | % | 1.22 | %6 | 4.91 | % | 3.70 | % | 4.43 | %7 | ||||||||||||||||||||
Portfolio turnover rate8 | 25 | % | 17 | % | 26 | % | 0 | % | 42 | % | 30 | % | 10 | % | 35 | % | 16 | % | 11 | % |
1 | Commencement of operations. |
2 | Based on average shares outstanding. |
3 | Less than $0.005 per share. |
4 | Greater than $(0.005) per share. |
5 | Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions, if any, at net asset value during the period, and redemption on the last day of the period. Total return calculated for a period less than one year is not annualized. |
6 | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions. |
7 | Annualized. |
8 | Portfolio turnover rate is not annualized and excludes the value of portfolio securities received or delivered as in-kind creations or redemptions in connection with the Fund’s capital share transactions. |
See notes to financial statements.
63 |
Notes to Financial Statements |
April 30, 2014 |
1. ORGANIZATION
IndexIQ ETF Trust (the “Trust”) was organized as a Delaware statutory trust on July 1, 2008 and is registered with the Securities and Exchange Commission (“SEC”) as a non-diversified, open-end, management investment company, as defined by the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust is currently comprised of eleven operational funds (collectively, the “Funds” and each individually, a “Fund”): IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF, IQ Hedge Market Neutral Tracker ETF, IQ Real Return ETF, IQ Global Resources ETF, IQ Merger Arbitrage ETF, IQ Australia Small Cap ETF, IQ Canada Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF and IQ U.S. Real Estate Small Cap ETF. The Funds are exchange-traded funds (“ETFs”), whose shares are listed on a stock exchange and traded like equity securities at market prices. The IQ Hedge Multi-Strategy Tracker ETF commenced operations on March 24, 2009; IQ Hedge Macro Tracker ETF commenced operations on June 8, 2009; IQ Hedge Market Neutral Tracker ETF commenced operations on October 4, 2012; IQ Real Return ETF and IQ Global Resources ETF commenced operations on October 26, 2009; IQ Merger Arbitrage ETF commenced operations on November 16, 2009; IQ Australia Small Cap ETF and IQ Canada Small Cap ETF commenced operations on March 22, 2010; IQ Global Agribusiness Small Cap ETF commenced operations on March 21, 2011; IQ Global Oil Small Cap ETF commenced operations on May 4, 2011; and IQ U.S. Real Estate Small Cap ETF commenced operations on June 13, 2011.
The investment objective of the IQ Hedge Multi-Strategy Tracker ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Hedge Multi-Strategy Index, developed by Financial Development Holdco LLC (“IndexIQ”), the parent company of IndexIQ Advisors, LLC (the “Advisor”), the Funds’ investment advisor. The objective of the IQ Hedge Multi-Strategy Index is to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of hedge funds that employ various hedge fund investment styles, which may include but are not limited to global macro, long/short, event-driven, market neutral, emerging markets, fixed-income arbitrage and other strategies commonly used by hedge fund managers.
The investment objective of the IQ Hedge Macro Tracker ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Hedge Macro Index, developed by IndexIQ. The objective of the IQ Hedge Macro Index is to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of a combination of hedge funds pursuing a macro strategy and hedge funds pursuing an emerging markets strategy.
The investment objective of the IQ Hedge Market Neutral Tracker ETF is to seek results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Hedge Market Neutral Index, developed by IndexIQ. The objective of the IQ Hedge Market Neutral Index is to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of hedge funds pursuing a market neutral strategy.
The investment objective of the IQ Real Return ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Real Return Index, developed by IndexIQ. The objective of the IQ Real Return Index is to provide investors with a hedge against the U.S. inflation rate by providing a “real return” or a return above the rate of inflation, as represented by the Consumer Price Index, a leading government measure of inflation in the U.S. economy.
The investment objective of the IQ Global Resources ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Global Resources Index, developed by IndexIQ. The objective of the IQ Global Resources Index is to use momentum and valuation factors to identify global companies that operate in commodity-specific market segments and whose equity securities trade in developed markets, including the U.S.
The investment objective of the IQ Merger Arbitrage ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Merger Arbitrage Index, developed by IndexIQ. The objective of the IQ Merger Arbitrage Index is to seek to identify investment opportunities in the acquisition and merger market segment globally.
The investment objective of the IQ Australia Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Australia Small Cap Index, developed
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by IndexIQ. The objective of the IQ Australia Small Cap Index is to track the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in Australia.
The investment objective of the IQ Canada Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Canada Small Cap Index, developed by IndexIQ. The objective of the IQ Canada Small Cap Index is to track the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in Canada.
The investment objective of the IQ Global Agribusiness Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Global Agribusiness Small Cap Index, developed by IndexIQ. The objective of the IQ Global Agribusiness Small Cap Index is to track the overall performance of the global small capitalization sector of publicly traded companies engaged in the agribusiness sector.
The investment objective of the IQ Global Oil Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Global Oil Small Cap Index, developed by IndexIQ. The objective of the IQ Global Oil Small Cap Index is to track the overall performance of the global small cap companies engaged in the oil sector, including in the areas of exploration and production, refining and marketing, and equipment, services and drilling.
The investment objective of the IQ U.S. Real Estate Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ U.S. Real Estate Small Cap Index, developed by IndexIQ. The objective of the IQ U.S. Real Estate Small Cap Index is to track the overall performance of the small capitalization U.S. real estate companies.
Investors may find the financial statements of any issuer whose securities represent a significant amount of a Fund’s assets on the SEC’s website (www.sec.gov).
2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
These financial statements are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of increases and decreases in the net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds:
Indemnification
In the normal course of business, the Funds may enter into contracts that contain a variety of representations which provide general indemnifications for certain liabilities. Each Fund’s maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
Investment Valuation
According to the Registration Statement, the net asset value (“NAV”) of the Shares of the Fund will be equal to the Fund’s total assets minus the Fund’s total liabilities divided by the total number of shares outstanding. The NAV that is published will be rounded to the nearest cent; however, for purposes of determining the price of Creation Units, the NAV will be calculated to five decimal places. For purposes of calculating NAV, portfolio securities and other assets for which market quotations are readily available will be valued at market value. Market value will generally be determined on the basis of last reported sales prices, or if no sales are reported, based on quotes obtained from a quotation reporting system, established market makers, or pricing services.
In calculating NAV, the Fund’s exchange-traded Equity Securities will be valued at market value, which will generally be determined using the last reported official closing or last trading price on the exchange or market on which the security is primarily traded at the time of valuation or, if no sale has occurred, at the last quoted mid price on the primary market or exchange on which they are traded. Investment company securities (other than ETFs) will be valued at NAV.
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Unsponsored depositary receipts will be valued at the last quoted mid price. Debt Securities will be valued using market quotations when available or other equivalent indications of value provided by an independent third-party pricing service. Short-term Debt Instruments having a remaining maturity of 60 days or less are generally valued at amortized cost, which approximates market value.
A swap on an exchange-listed security or securities is valued at the last reported sale price of the swap’s underlying security or securities on the exchange where the security or securities is primarily traded, or if no sale price is available, at the mid price of the security or securities underlying the swap on the exchange where the security is primarily traded. A swap on an index is valued based on the publicly available index price. The index price, in turn, is determined by the applicable index calculation agent, which generally values the securities underlying the index at the last reported sale price.
Futures contracts will be valued at the settlement or closing price determined by the applicable exchange. Exchange-traded option contracts, including options futures and swaps, will be valued at their most recent sale price. If no such sales are reported, these contracts will be valued at their last traded price.
OTC-traded Financial Instruments, including OTC-traded options, forwards and currency-related derivatives, will normally be valued on the basis of quotes obtained from a third party broker-dealer who makes markets in such securities or on the basis of quotes obtained from an independent third-party pricing service.
Foreign securities and instruments will be valued in their local currency following the methodologies described above. Foreign securities, instruments and currencies will be translated to U.S. dollars, based on foreign currency exchange rate quotations supplied by the London Stock Exchange.
When market quotations are not readily available, are deemed unreliable or do not reflect material events occurring between the close of local markets and the time of valuation, investments will be valued using fair value pricing as determined in good faith by the Adviser under procedures established by and under the general supervision and responsibility of the Trust’s Board of Trustees. According to the Registration Statement, the NAV will be calculated by the Administrator and determined each Business Day as of the close of regular trading on the Exchange (ordinarily 4:00 p.m., Eastern time (“E.T.”). The Shares of the Fund will not be priced on days on which the Exchange is closed for trading.
Under normal conditions, the Fund invests cash collateral from securities lending activities into BNY Mellon Overnight Government Fund (“BNY Mellon Overnight Government”). The BNY Mellon Overnight Government’s investment objective is to maximize current income to the extent consistent with the preservation of capital and the maintenance of liquidity. BNY Mellon Overnight Government has no redemption restrictions and is valued at the daily NAV.
Due to the inherent uncertainty of valuations, fair values may differ significantly from the values that would have been used had an active market existed. Fair valuation could result in a different NAV than a NAV determined by using market quotes.
Fair Value Measurement
Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and requires disclosure about fair value measurements. It also provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or liability, when a transaction is not orderly, and how that information must be incorporated into fair value measurement. Under ASC 820, various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in the following hierarchy:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
• | Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
• | Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that
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valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. With respect to the valuation of Level 3 securities, IndexIQ may employ a market-based valuation approach which may use related or comparable securities, recent transactions, market multiples, book values, and other relevant information to determine fair value. IndexIQ may also use an income-based valuation approach in which anticipated future cash flows of the financial instrument are discounted to calculate fair value. IndexIQ representatives meet regularly to review and discuss the appropriateness of such fair values using more current information such as, recent security news, recent market transactions, updated corporate action information and/or other macro or security specific events.
All other securities and investments for which market values are not readily available, including restricted securities, and those securities for which it is inappropriate to determine prices in accordance with the aforementioned procedures, are valued at fair value as determined in good faith under procedures adopted by the Board, although the actual calculations may be done by others. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.
Transfers between levels, if any, are considered to have occurred at the beginning of the reporting period. Significant transfers between levels and the reasons for these transfers are detailed in the tables below.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following summarizes inputs used as of April 30, 2014 in valuing the Funds’ assets and liabilities carried at fair value:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | ||||||||||||||||
Assets | ||||||||||||||||
Investment Companies* | $ | 699,874,943 | $ | — | $ | — | $ | 699,874,943 | ||||||||
Other Financial Instruments | — | — | ** | — | — | |||||||||||
Short-Term Investments | 105,425,189 | — | — | 105,425,189 | ||||||||||||
Total | $ | 805,300,132 | $ | — | $ | — | $ | 805,300,132 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instrument | — | — | ** | — | — | |||||||||||
Total | $ | — | $ | — | $ | — | $ | — | ||||||||
IQ Hedge Macro Tracker ETF | ||||||||||||||||
Assets | ||||||||||||||||
Investment Companies* | $ | 26,244,534 | $ | — | $ | — | $ | 26,244,534 | ||||||||
Other Financial Instruments | — | — | ** | — | — | |||||||||||
Short-Term Investments | 8,766,085 | — | — | 8,766,085 | ||||||||||||
Total | $ | 35,010,619 | $ | — | $ | — | $ | 35,010,619 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instrument | — | — | ** | — | — | |||||||||||
Total | $ | — | $ | — | $ | — | $ | — | ||||||||
IQ Hedge Market Neutral Tracker ETF | ||||||||||||||||
Assets | ||||||||||||||||
Investment Companies* | $ | 16,153,364 | $ | — | $ | — | $ | 16,153,364 | ||||||||
Other Financial Instruments | — | — | ** | — | — | |||||||||||
Short-Term Investments | 613,774 | — | — | 613,774 | ||||||||||||
Total | $ | 16,767,138 | $ | — | $ | — | $ | 16,767,138 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instrument | — | — | ** | — | — | |||||||||||
Total | $ | — | $ | — | $ | — | $ | — | ||||||||
IQ Real Return ETF | ||||||||||||||||
Assets | ||||||||||||||||
Investment Companies* | $ | 26,195,072 | $ | — | $ | — | $ | 26,195,072 | ||||||||
Short-Term Investments | 4,788,884 | — | — | 4,788,884 | ||||||||||||
Total | $ | 30,983,956 | $ | — | $ | — | $ | 30,983,956 |
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Level 1 | Level 2 | Level 3 | Total | |||||||||||||
IQ Global Resources ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks† | $ | 76,440,406 | $ | — | $ | 216,410 | $ | 76,656,816 | ||||||||
Short-Term Investments | 10,924,588 | — | — | 10,924,588 | ||||||||||||
Total | $ | 87,364,994 | $ | — | $ | 216,410 | $ | 87,581,404 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instruments | (212,843 | ) | — | — | (212,843 | ) | ||||||||||
Total | $ | (212,843 | ) | $ | — | $ | — | $ | (212,843 | ) | ||||||
IQ Merger Arbitrage ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 24,741,376 | $ | 74,322 | $ | 382 | $ | 24,816,080 | ||||||||
Right*** | — | — | — | — | ||||||||||||
Short-Term Investments | 8,724,222 | — | — | 8,724,222 | ||||||||||||
Total | $ | 33,465,598 | $ | 74,322 | $ | 382 | $ | 33,540,302 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instruments** | (152,139 | ) | — | — | (152,139 | ) | ||||||||||
Total | $ | (152,139 | ) | $ | — | $ | — | $ | (152,139 | ) | ||||||
IQ Australia Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 8,527,484 | $ | 24,364 | $ | — | $ | 8,551,848 | ||||||||
Right | — | 4,919 | — | 4,919 | ||||||||||||
Short-Term Investments | 724,700 | — | — | 724,700 | ||||||||||||
Total | $ | 9,252,184 | $ | 29,283 | $ | — | $ | 9,281,467 | ||||||||
IQ Canada Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 16,508,590 | $ | — | $ | 3,291 | $ | 16,511,881 | ||||||||
Short-Term Investments | 1,437,402 | — | — | 1,437,402 | ||||||||||||
Total | $ | 17,945,992 | $ | — | $ | 3,291 | $ | 17,949,283 | ||||||||
IQ Global Agribusiness Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks† | $ | 25,413,523 | $ | — | $ | — | $ | 25,413,523 | ||||||||
Short-Term Investments | 2,685,886 | — | — | 2,685,886 | ||||||||||||
Total | $ | 28,099,409 | $ | — | $ | — | $ | 28,099,409 | ||||||||
IQ Global Oil Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks† | $ | 2,266,566 | $ | — | $ | — | $ | 2,266,566 | ||||||||
Short-Term Investments | 175,176 | — | — | 175,176 | ||||||||||||
Total | $ | 2,441,742 | $ | — | $ | — | $ | 2,441,742 | ||||||||
IQ U.S. Real Estate Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 51,852,160 | $ | — | $ | — | $ | 51,852,160 | ||||||||
Short-Term Investments | 2,142,293 | — | — | 2,142,293 | ||||||||||||
Total | $ | 53,994,453 | $ | — | $ | — | $ | 53,994,453 |
* | Please refer to the Schedules of Investments to view securities segregated by industry type. |
** | Other financial instruments, including swap transactions and futures contracts, are valued at the net unrealized appreciation (depreciation) on the instrument. |
*** | Include level 3 security valued at $0. |
† | Please refer to the Schedules of Investments to view securities segregated by country. |
No transfers between Level 1 and Level 2 fair value measurements occurred during the year ended April 30, 2014.
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The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in the determining fair value. All transfers in and out of Level 3 are done using the beginning of period method.
IQ Global Resources ETF | IQ Merger Arbitrage ETF** | IQ Canada Small Cap ETF | ||||||||||
Common Stock | ||||||||||||
Balance as of April 30, 2013 | $ | — | $ | — | $ | — | ||||||
Purchases | — | 645 | — | |||||||||
Sales | — | — | — | |||||||||
Transfer in | 365,825 | — | 3,591 | |||||||||
Realized gain (loss) | — | — | — | |||||||||
Change in unrealized depreciation | (149,415 | ) | (263 | ) | (300 | ) | ||||||
Balance as of April 30, 2014 | 216,410 | 382 | 3,291 | |||||||||
Net change in unrealized appreciation/depreciation from | ||||||||||||
investments still held as of April 30, 2014 was: | $ | (149,415 | ) | $ | (263 | ) | $ | (300 | ) |
** Includes level 3 security valued at $0
Tax Information, Dividends and Distributions to Shareholders and Uncertain Tax Positions
Each Fund intends to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), by distributing substantially all of its net investment income and net realized gains to shareholders. Certain Funds also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends’ paid deduction. Under the Code taxable net realized gains from investment transactions reduced by capital loss carryforwards, if any, are declared and distributed to shareholder at least annually. Dividends may be declared and paid more frequently to improve index tracking or to comply with the distribution requirements of the Code. In addition, the Funds may determine to distribute at least annually amounts representing the full dividend yield net of expenses on the underlying investment securities, as if the Funds owned the underlying investment securities for the entire dividend period in which case some portion of each distribution may result in a return of capital. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with Federal income tax regulations which may differ from U.S. GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets based on their Federal tax basis treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profit for tax purposes are reported as a tax return of capital.
Management evaluates tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as an expense in the current year. If applicable, the Funds will recognize interest expense and penalties in “Miscellaneous” expenses on the Statement of Operations. The Funds have concluded that there is no tax liability resulting from uncertain income tax positions taken or expected to be taken. The Funds are required to analyze all open tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. The returns of the Funds for the period from April 30, 2011 through April 30, 2014 are open for examination.
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Cash Equivalents
Cash equivalents consist of highly liquid investments, with maturities of three months or less when acquired, and are disclosed as Short-Term Investments in the Schedules of Investments.
Security Transactions
Security transactions are recorded as of the trade date. Realized gains and losses on sales of investment securities are calculated using the identified cost method.
Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the prevailing exchange rates of such currencies against the U.S. dollar. The market value of investment securities and other assets and liabilities are translated at the exchange rate as of the valuation date. Purchases and sales of investment securities, income and expenses are translated at the exchange rate prevailing on the respective dates of such transactions.
Although the net assets of the Funds are presented at the foreign exchange rates and market values at the close of the period, the Funds do not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held or sold during the period. Accordingly, such foreign currency gains/(losses) are included in the reported net realized and unrealized gains/(losses) on investment transactions.
Reported realized foreign currency gains or losses arise from the disposition of foreign currency, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on each Fund’s books on the transaction date and the U.S. dollar equivalent of the amounts actually received or paid. Unrealized foreign exchange gains and losses arise from changes (due to the changes in the exchange rate) in the value of foreign currency and other assets and liabilities denominated in foreign currencies, which are held at period end.
Securities Lending
Each Fund may lend portfolio securities to certain creditworthy borrowers, including the Funds’ securities lending agent. It is the Funds’ policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral in the form of cash and /or high grade debt obligations, equivalent to at least 100% of the market value of securities loaned, is maintained at all times. Cash collateral can be invested in certain money market mutual funds which also have exposure to the fluctuations of the market. Each Fund receives compensation for lending its securities from interest or dividends earned on the cash or U.S. government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. The dividend and interest income earned on the securities loaned is accounted for in the same manner as other dividend and interest income. The borrower pays to the Funds an amount equal to any dividends or interest received on loaned securities. Lending portfolio securities could result in a loss or delay in recovering the Fund’s securities if the borrower defaults.
The securities lending income earned by the Funds is disclosed on the Statements of Operations. The value of loaned securities and related collateral outstanding at April 30, 2014 are shown on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.
Master Netting Arrangements
In December 2011, with clarification in January 2013, the Financial Accounting Standard Broad (“FASB”) issued guidance that expands disclosure requirements with respect to the offsetting of certain assets and liabilities. The fund adopted these disclosure provisions during the current reporting period. These disclosures are required for certain investments, including securities lending and derivative financial instruments subject to master netting arrangements (“MNA”) or similar agreements which are eligible for offsetting in the Statements of Assets and Liabilities and require the fund to disclose both gross and net information with respect to such investments.
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In order to better define its contractual rights and to secure rights that will help a Fund mitigate its counterparty risk, a Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs over-the-counter derivatives (“OTC”), including Forward Contracts, and typically contains, among other things, collateral posting terms, netting and rights of set-off provisions in the event of a default and/or termination event. Generally, the amount of collateral due from or to a counterparty must exceed a minimum transfer amount threshold before a transfer is required to be made. To the extent amounts due to a Fund from its derivatives counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance.
The following is a summary of the fair value of derivative instruments subject to the Master Netting Agreements and collateral pledged (received) if any, at April 30, 2014.
Assets | Liabilities | |||||||||||||||||||||||
Fund | Gross Amounts Presented in Statements of Assets and Liabilities | Collateral Received | Net Amount | Gross Amounts Presented in Statements of Assets and Liabilities | Collateral Pledged | Net Amount | ||||||||||||||||||
Futures: | ||||||||||||||||||||||||
IQ Global Resources ETF | $ | — | $ | — | 1 | $ | — | $ | (56,725 | ) | $ | 56,725 | 1,2 | $ | — | |||||||||
IQ Merger Arbitrage ETF | — | — | 1 | — | (43,280 | ) | 43,280 | 1,2 | — | |||||||||||||||
Swaps:3 | ||||||||||||||||||||||||
IQ Hedge Multi-Strategy | ||||||||||||||||||||||||
Tracker ETF | $ | — | $ | — | 1,2 | $ | — | $ | — | $ | — | 1,2 | $ | — | ||||||||||
IQ Hedge Macro | ||||||||||||||||||||||||
Tracker ETF | — | — | 1,2 | — | — | — | 1,2 | — | ||||||||||||||||
IQ Hedge Market | ||||||||||||||||||||||||
Neutral Tracker ETF | — | — | 1,2 | — | — | — | 1,2 | — |
1 | Positive net exposure represents amounts due from counterparty. Negative exposure represents amounts due from the Funds. The counterparty for all derivative instruments is Morgan Stanley & Co. LLC. |
2 | The amount of collateral presented is limited such that the net amount cannot be less than zero. |
3 | Contains swap contracts which are valued at the unrealized appreciation (depreciation) on the instrument, which is zero. |
A Fund’s security lending activities are governed by a Securities Lending Authorization Agreement (“Lending Agreement”) between the Fund and the lending agent. The Lending Agreement authorizes the lending agent to lend qualifying U.S. and foreign securities held by a Fund to approved borrowers (each a “Borrower”). To mitigate borrower risk, a Fund typically receives from a Borrower, collateral in the form of U.S. dollar cash and/or securities issued or guaranteed by the U.S. Government or its agencies in excess of the market value of the securities loaned. Under the provisions of the Lending Agreement, a Fund shall have, as to the collateral, all of the rights and remedies of a secured party under applicable law. A Fund is exposed to risk of loss if a Borrower defaults on its obligation to return borrowed securities and the value of the collateral a Fund received is insufficient to cover the market value of the securities loaned. Also, the lending agent is permitted to invest the cash collateral it receives from a Borrower into a money market fund which is subject to market fluctuation. Therefore, a Fund is exposed to risk of loss if the value of invested cash collateral is insufficient to satisfy the Fund’s obligation to return the full amount owed to such Borrower.
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Notes to Financial Statements (continued) |
April 30, 2014 |
For financial reporting purposes, the Funds do not offset assets and liabilities subject to master netting arrangements or similar arrangements in the Statements of Assets and Liabilities. Therefore, all qualifying transactions are presented on a gross basis in the Statements of Assets and Liabilities. As of April 30, 2014, the impact of netting of assets and liabilities and offsetting of collateral pledged or received based on contractual netting provisions in the Lending Agreement are detailed in the following table:
Assets | Liabilities | ||||||||||||||||||||||||
Fund | Gross Amounts Presented in Statements of Assets and Liabilities | Collateral Received | Net Amount | Gross Amounts Presented in Statements of Assets and Liabilities | Collateral Pledged | Net Amount | |||||||||||||||||||
IQ Hedge Multi-Strategy | |||||||||||||||||||||||||
Tracker ETF | $ | 100,489,810 | $ | (100,489,810 | )1,2 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
IQ Hedge Macro | |||||||||||||||||||||||||
Tracker ETF | 8,394,586 | (8,394,586 | )1 | — | — | — | — | ||||||||||||||||||
IQ Hedge Market Neutral | |||||||||||||||||||||||||
Tracker ETF | 329,492 | (329,492 | )1 | — | — | — | — | ||||||||||||||||||
IQ Real Return ETF | 6,718,173 | (6,718,173 | )1,2 | — | — | — | — | ||||||||||||||||||
IQ Global | |||||||||||||||||||||||||
Resources ETF | 3,618,898 | (3,618,898 | )1 | — | — | — | — | ||||||||||||||||||
IQ Merger | |||||||||||||||||||||||||
Arbitrage ETF | 1,376,777 | (1,376,777 | )1 | — | — | — | — | ||||||||||||||||||
IQ Australia Small | |||||||||||||||||||||||||
Cap ETF | 680,081 | (680,081 | )1 | — | — | — | — | ||||||||||||||||||
IQ Canada Small | |||||||||||||||||||||||||
Cap ETF | 1,359,744 | (1,359,744 | )1 | — | — | — | — | ||||||||||||||||||
IQ Global Agribusiness | |||||||||||||||||||||||||
Small Cap ETF | 2,416,098 | (2,416,098 | )1 | — | — | — | — | ||||||||||||||||||
IQ Global Oil Small | |||||||||||||||||||||||||
Cap ETF | 156,467 | (156,467 | )1 | — | — | — | — | ||||||||||||||||||
IQ U.S. Real Estate Small | |||||||||||||||||||||||||
Cap ETF | 1,813,262 | (1,813,262 | )1 | — | — | — | — |
1 | The amount of collateral presented is limited such that the net amount cannot be less than zero. |
2 | Includes the value of securities received as collateral which are not shown on the Statement of Assets and Liabilities because the Fund does not have the right to sell or repledge the securities as collateral. |
Investment Income and Expenses
Dividend income is recognized on the ex-dividend date. Interest income is accrued daily. Distributions of realized capital gains by underlying funds are recorded as realized capital gains on the ex-date. Expenses of the Trust arising in connection with a specific fund are allocated to that fund. Other Trust expenses which cannot be directly attributed to a fund are apportioned among the funds in the Trust based upon the relative net assets or other appropriate measures. The Funds distribute substantially all of their net investment income to shareholders in the form of dividends.
72 |
Notes to Financial Statements (continued) |
April 30, 2014 |
3. INVESTMENT MANAGEMENT AND OTHER AGREEMENTS
Advisory Agreement
Under the terms of the Investment Advisory Agreement (the “Advisory Agreement”) the Funds pay the Advisor an advisory fee, based on the average daily net assets of each Fund, at the following annual rates:
Fund | Rate |
IQ Hedge Multi-Strategy Tracker ETF | 0.75% |
IQ Hedge Macro Tracker ETF | 0.75% |
IQ Hedge Market Neutral Tracker ETF | 0.75% |
IQ Real Return ETF | 0.48% |
IQ Global Resources ETF | 0.75% |
IQ Merger Arbitrage ETF | 0.75% |
IQ Australia Small Cap ETF | 0.69% |
IQ Canada Small Cap ETF | 0.69% |
IQ Global Agribusiness Small Cap ETF | 0.75% |
IQ Global Oil Small Cap ETF | 0.75% |
IQ U.S. Real Estate Small Cap ETF | 0.69% |
Such fee is accrued daily and paid monthly.
The Advisor has agreed to pay all expenses of the Funds, except brokerage and other transaction expenses; extraordinary legal fees or expenses, such as those for litigation or arbitration; compensation and expenses of the Independent Trustees, counsel to the Independent Trustees, and the Funds’ chief compliance officer; extraordinary expenses; distribution fees and expenses paid by the Funds under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act; and the advisory fee payable to the Advisor hereunder.
Distribution
ALPS Distributors, Inc. serves as the Funds’ distributor (the “Distributor”) pursuant to a Distribution Services Agreement. The Trust has adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act (“Rule 12b-1 Plan”). In accordance with the Rule 12b-1 Plan, the Funds are authorized to pay an amount up to 0.10% of each Fund’s average daily net assets each year for certain distribution-related activities. As authorized by the Board, no Rule 12b-1 fees are currently paid by the Funds and there are no plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, they will be paid out of each Fund’s assets. The Advisor and its affiliates may, out of their own resources, pay amounts to third parties for distribution or marketing services on behalf of the Funds.
Administrator, Custodian and Transfer Agent
The Bank of New York Mellon (in each capacity, the “Administrator,” “Custodian” or “Transfer Agent”) serves as the Funds’ Administrator, Custodian and Transfer Agent pursuant to the Fund Administration and Accounting Agreement. Under the terms of this agreement, the Advisor pays the Funds’ Administrative, Custody and Transfer Agency fees. The Bank of New York Mellon is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company.
4. ORGANIZATIONAL AND OFFERING COSTS
Expenses incurred in connection with organizing and the offering of the Trust and the Funds were paid by the Advisor. The Funds do not have an obligation to reimburse the Advisor or its affiliates for organizational and offering expenses paid on their behalf.
5. CAPITAL SHARE TRANSACTIONS
As of April 30, 2014, there was an unlimited number of no par value shares of beneficial interest authorized by the Trust. Shares are created and redeemed on a continuous basis at NAV only in groups of 50,000 shares called Creation Units. Except when aggregated in Creation Units, shares are not redeemable. Transactions in shares of the Funds are disclosed in detail in the Statements of Changes in Net Assets. Only “Authorized Participants” may purchase or redeem shares directly from the Funds. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of National Securities Clearing
73 |
Notes to Financial Statements (continued) |
April 30, 2014 |
Corporation or (ii) a Depository Trust Company (“DTC”) participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors will not qualify as Authorized Participants or have the resources to create and redeem whole Creation Units. Therefore, they will be unable to purchase or redeem the shares directly from the Funds. Rather, most retail investors will purchase shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees.
6. FEDERAL INCOME TAX
At April 30, 2014, the cost of investments on a tax basis including the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting year was as follows:
Fund | Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 798,587,065 | $ | 10,247,659 | $ | (3,534,592 | ) | $ | 6,713,067 | |||||||
IQ Hedge Macro Tracker ETF | 35,268,703 | 4,919,220 | (5,177,304 | ) | (258,084 | ) | ||||||||||
IQ Hedge Market Neutral Tracker ETF | 16,806,451 | 8,738,536 | (8,777,849 | ) | (39,313 | ) | ||||||||||
IQ Real Return ETF | 30,593,606 | 494,764 | (104,414 | ) | 390,350 | |||||||||||
IQ Global Resources ETF | 90,925,968 | 2,669,540 | (6,014,104 | ) | (3,344,564 | ) | ||||||||||
IQ Merger Arbitrage ETF | 33,286,573 | 668,862 | (415,133 | ) | 253,729 | |||||||||||
IQ Australia Small Cap ETF | 10,101,416 | 1,109,656 | (1,929,605 | ) | (819,949 | ) | ||||||||||
IQ Canada Small Cap ETF | 19,809,358 | 2,381,651 | (4,241,726 | ) | (1,860,075 | ) | ||||||||||
IQ Global Agribusiness Small Cap ETF | 28,894,891 | 2,781,256 | (3,576,738 | ) | (795,482 | ) | ||||||||||
IQ Global Oil Small Cap ETF | 2,341,909 | 324,445 | (224,612 | ) | 99,833 | |||||||||||
IQ U.S. Real Estate Small Cap ETF | 53,289,985 | 3,795,856 | (3,091,388 | ) | 704,468 |
The differences between book and tax basis cost of investments and net unrealized appreciation (depreciation) are primarily attributable to wash sale loss deferrals, pass through investments and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies held at April 30, 2014.
At April 30, 2014, the Components of Undistributed (Accumulated) Earnings (Losses) on a tax-basis were as follows:
Fund | Undistributed Net Investment Income | Other Losses | Net Unrealized Appreciation/ (Depreciation) | Total Earnings/ (Losses) | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 7,237,202 | $ | (27,876,725 | ) | $ | 6,713,067 | $ | (13,926,456 | ) | ||||||
IQ Hedge Macro Tracker ETF | 28,661 | (4,820,601 | ) | (258,084 | ) | (5,050,024 | ) | |||||||||
IQ Hedge Market Neutral Tracker ETF | (58,794 | ) | (119,926 | ) | (39,313 | ) | (218,033 | ) | ||||||||
IQ Real Return ETF | — | (1,704,050 | ) | 390,350 | (1,313,700 | ) | ||||||||||
IQ Global Resources ETF | 1,147,048 | (26,096,495 | ) | (3,343,773 | ) | (28,293,220 | ) | |||||||||
IQ Merger Arbitrage ETF | (22,200 | ) | (2,626,251 | ) | 253,046 | (2,395,405 | ) | |||||||||
IQ Australia Small Cap ETF | 351,604 | (7,027,780 | ) | (820,031 | ) | (7,496,207 | ) | |||||||||
IQ Canada Small Cap ETF | 58,331 | (14,781,784 | ) | (1,859,159 | ) | (16,582,612 | ) | |||||||||
IQ Global Agribusiness Small Cap ETF | 83,386 | (5,985,006 | ) | (795,418 | ) | (6,697,038 | ) | |||||||||
IQ Global Oil Small Cap ETF | 6,062 | (266,186 | ) | 100,252 | (159,872 | ) | ||||||||||
IQ U.S. Real Estate Small Cap ETF | — | (1,850,722 | ) | 704,468 | (1,146,254 | ) |
The differences between book and tax basis components of net assets are primarily attributable to wash sale loss deferrals and other book and tax differences including foreign currency contracts, swap contracts and post-October losses.
74 |
Notes to Financial Statements (continued) |
April 30, 2014 |
At April 30, 2014, the effect of permanent book/tax reclassifications resulted in increases(decreases) to the components of net assets were as follows:
Fund | Undistributed Net Investment Income/ (Accumulated Net Investment Loss) | Accumulated Net Realized Gain/(Loss) on Investments | Paid-in Capital | |||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 8,885,160 | $ | (30,928,230 | ) | $ | 22,043,070 | |||||
IQ Hedge Macro Tracker ETF | 18,888 | (480,828 | ) | 461,940 | ||||||||
IQ Hedge Market Neutral Tracker ETF | 270,364 | (743,925 | ) | 473,561 | ||||||||
IQ Real Return ETF | 54,461 | (713,086 | ) | 658,625 | ||||||||
IQ Global Resources ETF | (12,308 | ) | (6,370,848 | ) | 6,383,156 | |||||||
IQ Merger Arbitrage ETF | (52,534 | ) | (1,623,497 | ) | 1,676,031 | |||||||
IQ Australia Small Cap ETF | 8,846 | 259,035 | (267,881 | ) | ||||||||
IQ Canada Small Cap ETF | 60,318 | 19,278 | (79,596 | ) | ||||||||
IQ Global Agribusiness Small Cap ETF | 127,406 | (2,833,597 | ) | 2,706,191 | ||||||||
IQ Global Oil Small Cap ETF | (1,563 | ) | (48,162 | ) | 49,725 | |||||||
IQ U.S. Real Estate Small Cap ETF | 1,160,647 | (3,101,661 | ) | 1,941,014 |
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to the tax treatment of foreign currency gains and losses, investments in passive foreign investment companies, publicly traded partnerships, grantors trusts, real estate investment trusts, regulated investment companies, swap, redemptions in-kind and deemed distribution on shareholder redemption.
The tax character of distributions paid during the years ended April 30, 2014 and 2013 were as follows:
2014 | 2013 | |||||||||||||||
Fund | Ordinary Income | Tax Return of Capital | Ordinary Income | Long-Term Capital Gains | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 7,853,060 | $ | — | $ | 3,493,395 | $ | — | ||||||||
IQ Hedge Macro Tracker ETF | 203,047 | — | 678,020 | — | ||||||||||||
IQ Hedge Market Neutral Tracker ETF | 163,748 | — | 19,014 | — | ||||||||||||
IQ Real Return ETF | 24,255 | — | 23,359 | — | ||||||||||||
IQ Global Resources ETF | 881,676 | — | 931,541 | — | ||||||||||||
IQ Merger Arbitrage ETF | 237,312 | — | 24,415 | — | ||||||||||||
IQ Australia Small Cap ETF | 359,750 | — | 254,722 | — | ||||||||||||
IQ Canada Small Cap ETF | 232,680 | — | 739,738 | — | ||||||||||||
IQ Global Agribusiness Small Cap ETF | 569,025 | — | 519,028 | — | ||||||||||||
IQ Global Oil Small Cap ETF | 15,442 | — | 45,351 | — | ||||||||||||
IQ U.S. Real Estate Small Cap ETF | 2,286,196 | 1,208,211 | 1,240,905 | — |
Capital losses incurred after October 31 (“Post-October Losses”) and certain late year ordinary income losses within the taxable year can be deemed to arise on the first business day of the Funds’ next taxable year. For the year ended April 30, 2014, the Funds incurred and elected to defer to May 1, 2014 post-October losses and late year ordinary losses of:
Fund | Late Year Ordinary Losses | Short-Term Post October Losses | Long-Term Post October Losses | |||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | — | $ | 4,663,690 | $ | — | ||||||
IQ Hedge Macro Tracker ETF | — | 431 | 183,027 | |||||||||
IQ Hedge Market Neutral Tracker ETF | — | 279,796 | — | |||||||||
IQ Real Return ETF | — | — | 426,422 | |||||||||
IQ Global Resources ETF | — | 403,768 | 1,659,159 | |||||||||
IQ Merger Arbitrage ETF | 22,199 | — | 354,489 | |||||||||
IQ Australia Small Cap ETF | — | 69,486 | 402,328 | |||||||||
IQ Canada Small Cap ETF | — | — | 1,263,707 | |||||||||
IQ Global Agribusiness Small Cap ETF | — | 128,200 | 1,235,622 | |||||||||
IQ Global Oil Small Cap ETF | — | 4,148 | 93,507 | |||||||||
IQ U.S. Real Estate Small Cap ETF | — | — | 60,006 |
75 |
Notes to Financial Statements (continued) |
April 30, 2014 |
On December 22, 2010, the Regulated Investment Company (“RIC”) Modernization Act of 2010 (the “Act”) was enacted. The Act modernizes several of the federal income and excise tax provisions related to RICs, and, with certain exceptions, is effective for taxable years beginning after December 22, 2010. Among the changes made are changes to the capital loss carryforward rules allowing for RICs to carry forward capital losses indefinitely and to retain the character of capital loss carryforwards as short-term or long-term. Rules in effect previously limited the carryforward period to eight years and all carryforwards were considered short-term in character. Capital loss carryforwards generated in taxable years beginning after the effective date of the Act must be fully used before capital loss carryforwards generated in taxable years prior to the effective date of the Act; therefore, under certain circumstances, capital loss carryforwards available as of the report date, if any, may expire unused.
At April 30, 2014, the Funds listed below had net capital loss carryforwards for Federal income tax purposes which are available for offset against future taxable net capital gains. The amounts were determined after adjustments for certain differences between financial reporting and tax purposes, such as wash sale losses. Accordingly, no capital gain distributions are expected to be paid to shareholders of these Funds until future net capital gains have been realized in excess of the available capital loss carryforwards. There is no assurance that any Fund will be able to utilize all of its capital loss carryforwards before they expire. For the year ended April 30, 2014, there were no capital loss carryforwards utilized or expired. These loss carryforwards expire in amounts and fiscal years as follows:
Fund | Short-Term Expiring April 30, 2018 | Short-Term Expiring April 30, 2019 | Short-Term With No Expiration | Long-Term With No Expiration | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 841,667 | $ | 5,603,304 | $ | 16,345,068 | $ | 422,996 | ||||||||
IQ Hedge Macro Tracker ETF | 80,017 | 531,209 | 3,791,909 | 234,007 | ||||||||||||
IQ Hedge Market Neutral Tracker ETF | — | — | 118,742 | 1,184 | ||||||||||||
IQ Real Return ETF | — | — | 527,547 | 750,081 | ||||||||||||
IQ Global Resources ETF | — | — | 19,663,772 | 4,369,797 | ||||||||||||
IQ Merger Arbitrage ETF | — | 971,183 | 606,231 | 694,348 | ||||||||||||
IQ Australia Small Cap ETF | — | — | 2,646,238 | 3,909,728 | ||||||||||||
IQ Canada Small Cap ETF | — | 161,421 | 8,176,146 | 5,180,510 | ||||||||||||
IQ Global Agribusiness Small Cap ETF | — | — | 2,743,581 | 1,877,603 | ||||||||||||
IQ Global Oil Small Cap ETF | — | — | 102,873 | 65,658 | ||||||||||||
IQ U.S. Real Estate Small Cap ETF | — | — | 1,790,716 | — |
7. INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding short-term investments) for the year ended April 30, 2014 are as follows:
Fund | Purchases | Sales | Purchases In-Kind | Sales In-Kind | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 748,306,923 | $ | 578,923,451 | $ | 421,084,534 | $ | 240,048,808 | ||||||||
IQ Hedge Macro Tracker ETF | 24,427,585 | 20,462,351 | 4,734,072 | 43,828,493 | ||||||||||||
IQ Hedge Market Neutral Tracker ETF | 11,635,146 | 8,304,672 | 17,773,015 | 9,773,074 | ||||||||||||
IQ Real Return ETF | 18,766,307 | 19,819,607 | 6,121,788 | 38,763,870 | ||||||||||||
IQ Global Resources ETF | 139,470,507 | 86,048,291 | 7,633,716 | 65,585,693 | ||||||||||||
IQ Merger Arbitrage ETF | 67,936,335 | 59,825,309 | 18,168,380 | 15,359,062 | ||||||||||||
IQ Australia Small Cap ETF | 3,169,635 | 2,951,492 | — | 3,985,867 | ||||||||||||
IQ Canada Small Cap ETF | 6,013,626 | 6,088,585 | — | 1,034,276 | ||||||||||||
IQ Global Agribusiness Small Cap ETF | 14,595,852 | 8,158,369 | — | 18,495,720 | ||||||||||||
IQ Global Oil Small Cap ETF | 1,082,214 | 848,542 | — | 218,116 | ||||||||||||
IQ U.S. Real Estate Small Cap ETF | 23,155,109 | 16,805,015 | 19,958,811 | 26,303,834 |
76 |
Notes to Financial Statements (continued) |
April 30, 2014 |
8. DERIVATIVE FINANCIAL INSTRUMENTS
Futures Contracts
Certain Funds may invest in futures contracts (“futures”) in order to replicate exposures to their respective underlying index components. Investments in futures may increase or leverage exposure to a particular market risk, thereby increasing price volatility of derivative instruments a Fund holds. No price is paid or received by a Fund upon the purchase of a futures contract. Initially, a Fund will be required to deposit with the broker an amount of cash or cash equivalents, known as initial margin, based on the value of the contract. Subsequent payments, called variation margin, to and from the broker, will be made on a daily basis as the price of the underlying instruments fluctuate making the long and short positions in the futures contract more or less valuable, a process known as ‘marking-to-the-market.’ Once a final determination of variation margin is made, additional cash is required to be paid by or released to a Fund, and a Fund will realize a loss or gain. During the year ended April 30, 2014, IQ Hedge Multi-Strategy Tracker ETF utilized futures contracts to effect short exposure to emerging markets equity returns, currency returns and commodity returns, the IQ Hedge Macro Tracker ETF utilized futures contracts to effect short exposure to currency returns and commodity returns, and the IQ Hedge Market Neutral Tracker ETF utilized futures contracts to effect short exposure to emerging markets equity returns and currency returns. In addition, the IQ Merger Arbitrage ETF and Global Resources ETF both utilized futures contracts to effect short exposure to domestic and international equity returns.
The open futures contracts at April 30, 2014 are listed in the Schedules of Investments. The variation margin receivable or payable, as applicable, is included in the Statements of Assets and Liabilities.
Swap Transactions
A swap agreement is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indexes, reference rates, currencies or other instruments. Most swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Funds’ obligations or rights under a swap agreement entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each counterparty. Swap agreements are not entered into or traded on exchanges and there is no central clearing or guaranty function for total return swaps. Total return swaps give the Fund the right to receive the appreciation in the value of a specified security, index or other instrument in return for a fee paid to the counterparty, which will typically be an agreed upon interest rate. Total return swaps can also be used to replicate an exposure to a short position in an asset class where the Fund has the right to receive the depreciation in value of a specified security, index or other instrument (“inverse swaps”). If the underlying asset in a total return swap declines in value (or increases in value, if an inverse swap) over the term of the swap, the Fund may also be required to pay the dollar value of that decline (or increase, if an inverse swap) to the counterparty. Therefore, swaps are subject to credit risk or the risk of default or non-performance by the counterparty. Swaps could result in losses if interest rate or foreign currency exchange rates or credit quality changes are not correctly anticipated by the Funds or if the reference index, security or investments do not perform as expected.
When the Funds have an unrealized loss on a swap agreement, the Funds have instructed the custodian to pledge cash or liquid securities as collateral with a value at least equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate.
Certain Funds use total return swaps to achieve the same exposures as their underlying index components. Total return swaps give the Funds the right to receive the appreciation in the value of a specified security, index or other instrument in return for a fee paid to the counterparty, which will typically be an agreed upon interest rate. Total return swaps can also be used to replicate an exposure to a short position in an asset class where a Fund has the right to receive the depreciation in value of a specified security, index or other instrument. If the underlying asset in a total return swap increases or decreases over the term of the swap, a Fund may also be required to pay the dollar value of that to the counterparty. The Funds segregate or receive liquid assets, which may include securities, cash, or cash equivalents, to cover the daily marked-to-market net obligations under outstanding swap agreements.
77 |
Notes to Financial Statements (continued) |
April 30, 2014 |
During the year ended April 30, 2014, IQ Hedge Multi-Strategy Tracker ETF utilized swaps to effect long exposure to convertible bond returns and currency returns, and short exposure to several asset classes, including, among others, U.S. real estate returns, volatility returns, domestic and international equity returns, corporate bonds, and short-term U.S. Treasury bonds. IQ Hedge Macro Tracker ETF utilized swaps to effect long exposure to mid-term volatility returns, convertible bond returns and corporate bond returns, and short exposure to several asset classes, including, among others, currency returns, and domestic and international equity returns, and domestic and international real estate returns. In addition, IQ Hedge Market Neutral Tracker ETF utilized swaps to effect long exposure to convertible bond returns and international equity returns, and short exposure to several asset classes, including, among others, domestic and international equity returns, currency returns, and corporate bond returns. In all cases, the Funds’ swap exposures were consistent with the exposure of the Funds’ underlying indexes. At April 30, 2014, the IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF and IQ Hedge Market Neutral Tracker ETF posted $16,379,724, $113,760 and $207,654, respectively, as collateral for swaps.
Pursuant to documentation governing the Funds’ swap transactions with Morgan Stanley Capital Services Inc. (“Morgan Stanley”), Morgan Stanley has the right to terminate the swaps early in the event that the net assets of the given Fund decline below specific levels set forth in the documentation (“net asset contingent features”). In the event of early termination, Morgan Stanley may require the Funds to pay or receive a settlement amount in connection with the terminated swap transaction. As of April 30, 2014, the Funds have not triggered the conditions under such documentation that will give the counterparty the right to call for an early termination. As of such date, the settlement values of these contracts were approximately equal to the fair value of such contracts.
At April 30, 2014 the fair values of derivative instruments reflected on the Statements of Assets and Liabilities were as follows:
Liability Derivatives
Equity Risk | Net Amount | |||||||
IQ Global Resources ETF | ||||||||
Unrealized appreciation on futures contracts1 | (212,843 | ) | (212,843 | ) | ||||
IQ Merger Arbitrage ETF | ||||||||
Unrealized appreciation on futures contracts1 | (152,139 | ) | (152,139 | ) |
1 | Includes unsettled variation margin is reported within the Statements of Assets and Liabilities. |
78 |
Notes to Financial Statements (continued) |
April 30, 2014 |
Transactions in derivative instruments reflected on the Statement of Operations during the year ended April 30, 2014 as follows:
Commodity Risk | Currency Risk | Equity Risk | Total | |||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | ||||||||||||||||
Realized gain (loss) | ||||||||||||||||
Futures contracts | $ | 758,706 | $ | (730,036 | ) | $ | (10,071 | ) | $ | 18,599 | ||||||
Swap transactions | — | — | 7,225,793 | 7,225,793 | ||||||||||||
Total realized gain (loss) | $ | 758,706 | $ | (730,036 | ) | $ | 7,215,722 | $ | 7,244,392 | |||||||
Change in Unrealized appreciation (depreciation) | ||||||||||||||||
Futures contracts | $ | (431,207 | ) | $ | 63,917 | $ | — | $ | (367,290 | ) | ||||||
IQ Hedge Macro Tracker ETF | ||||||||||||||||
Realized gain (loss) | ||||||||||||||||
Futures contracts | $ | 1,562 | $ | 20,848 | $ | 657 | $ | 23,067 | ||||||||
Swap transactions | — | — | (96,605 | ) | (96,605 | ) | ||||||||||
Total realized gain (loss) | $ | 1,562 | $ | 20,848 | $ | (95,948 | ) | $ | (73,538 | ) | ||||||
IQ Hedge Market Neutral Tracker ETF | ||||||||||||||||
Realized gain (loss) | ||||||||||||||||
Futures contracts | $ | 71 | $ | (9,892 | ) | $ | (26,949 | ) | $ | (36,770 | ) | |||||
Swap transactions | — | — | 144,166 | 144,166 | ||||||||||||
Total realized gain (loss) | $ | 71 | $ | (9,892 | ) | $ | 117,217 | $ | 107,396 | |||||||
Change in Unrealized appreciation (depreciation) | ||||||||||||||||
Futures contracts | $ | — | $ | — | $ | 6,863 | $ | 6,863 | ||||||||
IQ Global Resources ETF | ||||||||||||||||
Realized loss | ||||||||||||||||
Futures contracts | $ | 797 | $ | — | $ | (2,936,284 | ) | $ | (2,935,487 | ) | ||||||
Change in Unrealized appreciation (depreciation) | ||||||||||||||||
Futures contracts | $ | — | $ | — | $ | 436,421 | $ | 436,421 | ||||||||
IQ Merger Arbitrage ETF | ||||||||||||||||
Realized gain | ||||||||||||||||
Futures contracts | $ | 526 | $ | — | $ | (890,262 | ) | $ | (889,736 | ) | ||||||
Change in Unrealized appreciation (depreciation) | ||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (21,007 | ) | $ | (21,007 | ) |
For the year ended April 30, 2014, the monthly average volume of the derivatives held by the Funds was as follows:
Fund | Number of Futures Contracts | Market Value of Futures Contracts | ||||||
IQ Hedge Multi-Strategy Tracker ETF | (205 | ) | $ | (18,201,000 | ) | |||
IQ Hedge Macro Tracker ETF | (2 | ) | (116,229 | ) | ||||
IQ Hedge Market Neutral Tracker ETF | (17 | ) | (864,012 | ) | ||||
IQ Global Resources ETF | (187 | ) | (16,579,690 | ) | ||||
IQ Merger Arbitrage ETF | (61 | ) | (5,502,863 | ) |
Fund | Net Notional Amount of Total Return Swap Contracts | |||
IQ Hedge Multi-Strategy Tracker ETF | $ | 17,354,572 | ||
IQ Hedge Macro Tracker ETF | 339,705 | |||
IQ Hedge Market Neutral Tracker ETF | 936,544 |
79 |
Notes to Financial Statements (continued) |
April 30, 2014 |
9. RISKS INVOLVED WITH INVESTING IN THE FUNDS
The Funds are subject to the principal risks described below. Some or all of these risks may adversely affect a Fund’s NAV, trading price, yield, total return and ability to meet its investment objective. As with any investment, an investment in a Fund could result in a loss or the performance of a Fund could be inferior to that of other investments.
Fund of Funds Risk*
Certain of the Funds’ investment performance, because they are funds of funds, depends on the investment performance of the underlying ETFs in which they invest. An investment in any such Fund is subject to the risks associated with the underlying ETFs that comprise its underlying Index. Such a Fund will indirectly pay a proportional share of the asset-based fees, if any, of the underlying ETFs in which it invests.
Exchange Traded Vehicle Risk*
Unlike an investment in a mutual fund, the value of the Funds’ investments in ETFs, exchange-traded vehicles (“ETVs”) and exchange-traded notes (“ETNs”) is based on stock market prices and the Fund could lose money due to stock market developments, the failure of an active trading market to develop, or exchange trading halts or de-listings. Federal law prohibits the Funds from acquiring investment company shares, including shares of ETFs, in excess of specific thresholds unless exempted by rule, regulation or exemptive order. These prohibitions may prevent the Funds from allocating their investments to ETFs in an optimal manner.
Index Risk
The Funds’ underlying indexes and the Funds rebalance only on a monthly or quarterly basis, which may cause the performance of the underlying indexes and the Funds to deviate from that of the market exposure that they are trying to achieve.
Industry Concentration Risk
A Fund will not invest 25% or more of the value of the Fund’s total assets in the securities of one or more issuers conducting their principal business activities in the same industry or group of industries; except that, to the extent that the underlying Index is concentrated in a particular industry, the Fund also will be concentrated in that industry. The risk of concentrating Fund investments in a limited number of issuers conducting business in the same industry or group of industries will subject the Fund to a greater risk of loss as a result of adverse economic, business or other developments than if its investments were diversified across different industry sectors.
Tracking Error Risk
Each Fund’s performance may not match its underlying Index during any period of time. Although each Fund attempts to track the performance of its underlying Index, a Fund may not be able to duplicate its exact composition or return for any number of reasons, including but not limited to risk that the strategies used by the Advisor to match the performance of the underlying Indexes may fail to produce the intended results, liquidity risk and new fund risk, as well as the incurring of Fund expenses, which the underlying Index does not incur.
Foreign Securities Risk
Certain of the Funds invest directly or indirectly (through underlying ETFs) in the securities of non-U.S. issuers, which involves risks beyond those associated with investments in U.S. securities. These additional risks include greater market volatility, the availability of less reliable financial information, higher transactional and custody costs, taxation by foreign governments, decreased market liquidity and political instability.
Small Capitalization Companies Risk**
Certain of the Funds invest primarily in the stocks of small capitalization companies, which may be more volatile than those of larger companies. Stock prices of small capitalization companies are also more vulnerable than those of large capitalization companies to adverse business and economic developments, and the stocks of small capitalization companies may be thinly traded, making it difficult to buy and sell them.
80 |
Notes to Financial Statements (continued) |
April 30, 2014 |
New Fund Risk
The IQ Hedge Market Neutral Tracker ETF is a new fund. The Fund has evaluated subsequent events through the date of issuance of this report and has determined that there are no other material events that would require disclosure.
* | Applies to IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF, IQ Hedge Market Neutral Tracker ETF and IQ Real Return ETF. |
** | Applies to IQ Australia Small Cap ETF, IQ Canada Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF and IQ U.S. Real Estate Small Cap ETF. |
10. SUBSEQUENT EVENTS
In the preparation of the financial statements, the Funds’ management has evaluated events and transactions for potential recognition or disclosure through the dates the financial statements were issued.
On June 30, 2014 IQ U.S. Real Estate Small Cap ETF will pay a regularly scheduled distribution in the amount of $0.288 per share to shareholders of record as of June 26, 2014.
81 |
Report of Independent Registered Public Accounting Firm |
To the Board of Trustees and Shareholders of IndexIQ ETF Trust:
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of IndexIQ ETF Trust (the “Trust”) (comprising, respectively, IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF, IQ Hedge Market Neutral Tracker ETF, IQ Real Return ETF, IQ Global Resources ETF, IQ Merger Arbitrage ETF, IQ Australia Small Cap ETF, IQ Canada Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF and IQ U.S. Real Estate Small Cap ETF) as of April 30, 2014, and the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2014, by correspondence with the custodian and others, or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective funds constituting the IndexIQ ETF Trust at April 30, 2014, and the results of their operations, changes in their net assets, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
New York, New York
June 27, 2014
82 |
Supplemental Information (unaudited) |
Federal Tax Status of Dividends Declared During the Tax Year
Qualified Dividend Income — Certain dividends paid by the fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The percentage of ordinary income distributions for the fiscal year ended April 30, 2014 taxed at a maximum rate of 15% is as follows:
IQ Hedge Multi-Strategy Tracker ETF | 17.97% |
IQ Hedge Macro Tracker ETF | 18.36% |
IQ Hedge Market Neutral Tracker ETF | 24.35% |
IQ Real Return ETF | 100.00% |
IQ Global Resources ETF | 72.24% |
IQ Merger Arbitrage ETF | 100.00% |
IQ Australia Small Cap ETF | 100.00% |
IQ Canada Small Cap ETF | 79.72% |
IQ Global Agribusiness Small Cap ETF | 93.89% |
IQ Global Oil Small Cap ETF | 73.90% |
IQ U.S. Real Estate Small Cap ETF | 0.27% |
Dividends Received Deduction — For corporate shareholders, the percentage of ordinary income distributions for the year ended April 30, 2014 that qualifies for the dividends received deduction is as follows:
IQ Hedge Multi-Strategy Tracker ETF | 8.92% |
IQ Hedge Macro Tracker ETF | 3.62% |
IQ Hedge Market Neutral Tracker ETF | 0.14% |
IQ Real Return ETF | 100.00% |
IQ Global Resources ETF | 45.31% |
IQ Merger Arbitrage ETF | 100.00% |
IQ Australia Small Cap ETF | 0.00% |
IQ Canada Small Cap ETF | 0.00% |
IQ Global Agribusiness Small Cap ETF | 8.24% |
IQ Global Oil Small Cap ETF | 33.56% |
IQ U.S. Real Estate Small Cap ETF | 0.27% |
Foreign Taxes Paid — The following Funds elect under the Internal Revenue Code Section 853 to pass through foreign taxes paid to its shareholders. The total amount of foreign taxes passed through to shareholders on a per share basis for the year ended April 30, 2014, are as follows:
Foreign Taxes Per Share | Income Per Share | |||||||
IQ Hedge Multi-Strategy Tracker ETF | — | — | ||||||
IQ Hedge Macro Tracker ETF | — | — | ||||||
IQ Hedge Market Neutral Tracker ETF | — | — | ||||||
IQ Real Return ETF | — | — | ||||||
IQ Global Resources ETF | 0.0209 | 0.3754 | ||||||
IQ Merger Arbitrage ETF | — | — | ||||||
IQ Australia Small Cap ETF | 0.0111 | 0.6742 | ||||||
IQ Canada Small Cap ETF | 0.0721 | 0.4940 | ||||||
IQ Global Agribusiness Small Cap ETF | 0.0446 | 0.6435 | ||||||
IQ Global Oil Small Cap ETF | — | — | ||||||
IQ U.S. Real Estate Small Cap ETF | — | — |
In January 2015, you will be advised on IRS Form 1099 DIV as to the Federal tax status of the distributions received by you in calendar year 2014.
83 |
Board Review of Investment Advisory Agreement (unaudited) |
At the March 24, 2014 meeting of the Board of Trustees (the “Board”) of IndexIQ ETF Trust (the “Trust”), the Board, including those Trustees who are not “interested persons” of the Trust (the “Independent Trustees”), as that term is defined in the Investment Company Act of 1940, as amended (“1940 Act”), approved IndexIQ Advisors LLC (“IndexIQ”) to continue to serve as investment adviser to the Fund and approved the continuation of the investment advisory agreement between IndexIQ and the Trust with respect to the Fund (the “Investment Advisory Agreement”), upon the same terms and conditions set forth therein, for the period February 2, 2014 until February 2, 2015. In connection with considering approval of the Investment Advisory Agreement, the Independent Trustees met in executive session with counsel to the Trust, who provided assistance and advice.
In considering the approval of the continuation of the Investment Advisory Agreement, the Independent Trustees reviewed the materials provided for the Meeting by IndexIQ, including: (i) a copy of the Investment Advisory Agreement with IndexIQ; (ii) information describing the nature, quality, and extent of the services that IndexIQ provides to the Funds, and the fees that IndexIQ receives from the Funds; (iii) information concerning business and operations, compliance program and portfolio management team of IndexIQ; (iv) a copy of the current Form ADV for IndexIQ; and (v) memoranda from Katten Muchin Rosenman LLP on the fiduciary responsibilities of trustees, including the Independent Trustees, in considering advisory arrangements under the 1940 Act. The independent Trustees also considered the information presented at Board meetings throughout the year. In addition, the Independent Trustees received data comparing the advisory fees, expenses and performance of the Funds with expenses and performance of other exchange-traded funds (“ETFs”) with similar investment objectives and policies.
During their review of this information, the Independent Trustees focused on and analyzed the factors they deemed relevant, including: (1) the nature, quality, and extent of the services provided to the Funds; (2) the personnel and operations of IndexIQ; (3) the investment performance of each Fund; (4) IndexIQ’s financial condition and profitability; (5) potential “fall-out” benefits to IndexIQ and its affiliates (i.e., ancillary benefits that may be realized by IndexIQ and its affiliates from IndexIQ’s relationship with the Funds); and (6) possible conflicts of interest.
In particular, the Board considered and discussed the following with respect to each Fund:
(a) | The nature, extent, and quality of services provided to the Funds by IndexIQ. The Board reviewed the services that IndexIQ provides to the Funds. The Board noted the responsibilities that IndexIQ has as the Funds’ investment adviser, including overall supervisory responsibility for the general management and investment of each Fund’s securities portfolio, daily monitoring of tracking error and quarterly reporting to the Board, and the implementation of Board directives as they relate to the Funds. |
The Board reviewed the experience, resources, and strengths of IndexIQ in managing the Funds, the IndexIQ Trust’s mutual fund, as well as separately managed accounts. Based on their consideration and review of the foregoing information, the Board determined that the Funds were likely to continue to benefit from the nature, quality, and extent of these services, as well as IndexIQ’s ability to render such services based on its experience, operations, and resources.
(b) | Comparison of services provided and fees charged by IndexIQ and other investment advisers to similar clients, and the cost of the services provided and profits realized by IndexIQ from its relationship with the Funds. The Board then compared both the services rendered and the fees paid pursuant to the Investment Advisory Agreement to contracts of other registered investment advisers providing services to similar ETFs. In particular, the Board compared each Fund’s advisory fee and expense ratio to other investment companies considered to be in each such Fund’s peer group. |
After comparing each Fund’s fees with those of other investment companies in the Fund’s peer group, and in light of the nature, quality, and extent of services provided by IndexIQ and the costs incurred by IndexIQ in rendering those services, the Board concluded that the level of fees paid to IndexIQ with respect to each Fund were fair and reasonable.
(c) | IndexIQ’s profitability and the extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of scale. The Board discussed with IndexIQ the costs and profitability of IndexIQ in connection with its serving as investment adviser to each Fund, including operational costs. |
84 |
Board Review of Investment Advisory Agreement (unaudited) (continued) |
(d) | Investment performance of IndexIQ. The Board considered the investment performance of the Funds, including tracking error. In particular, the Board considered the investment performance of the Funds relative to their stated objectives and the success of IndexIQ in reaching such objectives. The Board considered each Fund’s investment performance compared to the benchmark index that each Fund uses for comparison in its prospectus and shareholder reports. The Board also considered each Fund’s investment performance compared to the respective Fund’s peer group. |
The Board also received and considered information about the premium/discount history of the Funds, which illustrated the number of times that the market price of the Funds trading on the secondary market closed above or below the NAV of the Funds, and by how much, measured in basis points.
Conclusion. No single factor was determinative to the decision of the Board. Based on the foregoing and such other matters as were deemed relevant, the Board concluded that the advisory fee rates and total expense ratios were reasonable in relation to the services provided by IndexIQ to the Funds, as well as the costs incurred and benefits gained by IndexIQ in providing such services. The Board also found the investment advisory fees to be reasonable in comparison to the fees charged by investment advisers to other comparable ETFs of similar size. As a result, the Board determined that the continuation of the Investment Advisory Agreement with IndexIQ was in the best interests of each Fund and its shareholders.
85 |
Board of Trustees and Officers (unaudited) |
The business of the Trust is managed under the direction of the Trust’s Board of Trustees. The Board elects the officers of the Trust who are responsible for administering the Trust’s day-to-day operations. Each Trustee serves until his or her successor is duly elected or appointed and qualified.
The name, year of birth, address and principal occupations during the past five years for each Trustee and Officer of the Trust is set forth below, along with the other public directorships held by the Trustees.
Independent Trustees | ||||||||||
Name and Year of Birth1 | Position(s) Held with Trust | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past 5 Years3 | Number of Portfolios in Fund Complex Overseen by Trustee4 | Other Directorships Held by Trustee | |||||
Reena Aggarwal 1957 | Trustee | Since August 2008 | Robert E. McDonough Professor (2003 to present) and Professor of Finance, McDonough School of Business, Georgetown University (2000 to present); Co-Chairman of Board, Social Innovations and Public Service Fund, Georgetown University (2012 to present); and Director, Brightwood Capital Advisors, L.P. (2013 to present). | 12 | FBR & Co. (2011 to present) FBR Funds (2006 to 2011) | |||||
Gene Chao 1970 | Trustee | Since August 2008 | Managing Director, Global Infrastructure Services, Computer Services Corp. (2013 to present); Vice President — Infrastructure Services, Capgemini (2012 to 2013); Vice President, Global Industries Strategy & Solutions, Juniper Networks (2011 to 2013); Vice President and GM, Global Network, Hewlett-Packard (2010 to 2011); and Vice President, Strategic Services, Dimension Data, Americas (2007 to 2010). | 12 | None | |||||
Interested Trustee5 | ||||||||||
Adam S. Patti 1970 | Chairman President | Since Since | Chairman, Trustee, President and Principal Executive, IndexIQ Trust (2008 to present); Chief Executive Officer, the Advisor (2007 to present); and Chief Executive Officer, IndexIQ (2006 to present). | 12 | None |
Officers of the Trust | ||||||
Name and Year of Birth1 | Position(s) Held with Trust | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past 5 Years | |||
Gregory D. Bassuk 1972 | Secretary | Since July 2008 | Chief Compliance Officer, the Advisor (2008 to present); Secretary, IndexIQ Trust (2008 to present); Chairman and Trustee, IndexIQ ETF Trust (July 2008 to November 2008); Chairman and Trustee, IndexIQ Trust (February 2008 to November 2008); Chief Operating Officer, the Advisor (2007 to present); and Chief Operating Officer, IndexIQ (2006 to present). | |||
David Fogel 1971 | Treasurer, Principal Financial Officer and Chief Compliance Officer | Since October 2008 | Executive Vice President, IndexIQ Trust (2011 to present); Treasurer, Principal Financial Officer and Chief Compliance Officer, IndexIQ Trust (2008 to present); and President (2013 to present) and Executive Vice President (2006 to 2013), IndexIQ. | |||
Executive Vice President | Since June 2011 |
1 | The address of each Trustee or Officer is c/o IndexIQ, 800 Westchester Avenue, Suite S-710, Rye Brook, New York 10573. |
2 | Trustees and Officers serve until their successors are duly elected and qualified. |
3 | Principal occupations(s) of the Trustees may cover more than the past five years. |
4 | The Funds are part of a “fund complex” as defined in the 1940 Act. The fund complex includes all open-end funds (including all of their portfolios) advised by the Advisor and any funds that have an investment advisor that is an affiliated person of the Advisor. |
5 | Mr. Patti is an “interested person” of the Trust (as that term is defined in the 1940 Act) because of his affiliations with the Advisor. |
86 |
ANNUAL REPORT | APRIL 30, 2014
IndexIQ ETF Trust
IQ Hedge Multi-Strategy Tracker ETF
IQ Hedge Macro Tracker ETF
IQ Hedge Market Neutral Tracker ETF
IQ Real Return ETF
IQ Global Resources ETF
IQ Merger Arbitrage ETF
IQ Australia Small Cap ETF
IQ Canada Small Cap ETF
IQ Global Agribusiness Small Cap ETF
IQ Global Oil Small Cap ETF
IQ U.S. Real Estate Small Cap ETF
Investment Advisor
IndexIQ Advisors LLC
800 Westchester Avenue,
Suite N-611
Rye Brook, NY 10573
Distributor
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203
Custodian/Fund Administrator/Transfer Agent
The Bank of New York Mellon
One Wall Street
New York, NY 10286
Legal Counsel
Katten Muchin Rosenman, LLP
575 Madison Avenue
New York, New York 10022
Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
Item 2. Code of Ethics.
(a) | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
(c) | There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
(d) | The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Trustees has one audit committee financial expert serving on its audit committee, an “independent” Trustee, Reena Aggarwal. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
Audit Fees
(a) | The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $206,000 for 2014 and $190,000 for 2013. |
Audit-Related Fees
(b) | The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 for 2014 and $0 for 2013. |
Tax Fees
(c) | The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $56,000 for 2014 and $56,000 for 2013. |
All Other Fees
(d) | The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2014 and $0 for 2013. |
(e)(1) | Per Rule 2-01(c)(7)(A), the Audit Committee pre-approves all of the Audit, Audit-Related, Tax and Other Fees of the Registrant. |
(e)(2) | 100% of services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(A) of Rule 2-01 of Regulation S-X. |
(f) | No response required. |
(g) | The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2014 and $0 for 2013. |
(h) | Not applicable. |
Item 5. Audit Committee of Listed registrants.
(a) | The Fund has a designated Audit Committee in accordance with Section 3(a)(58)(A) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and the members of such committee are Reena Aggarwal and Gene Chao. |
(b) | Not applicable. |
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | IndexIQ ETF Trust |
By (Signature and Title)* | /s/ Adam S. Patti |
Adam S. Patti | |
(Principal Executive Officer) | |
Date | June 25, 2014 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Adam S. Patti |
Adam S. Patti | |
(Principal Executive Officer) |
Date | June 25, 2014 |
By (Signature and Title)* | /s/ David L. Fogel |
David L. Fogel | |
(Principal Financial Officer) |
Date | June 25, 2014 |
* Print the name and title of each signing officer under his or her signature.