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 N-611
Rye Brook, NY 10573
(Address of principal executive offices) (Zip code)
Adam S. Patti
IndexIQ Advisors LLC
800 Westchester Ave, Suite N-611
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, 2012
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, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
ANNUAL REPORT | APRIL 30, 2012
IndexIQ ETF Trust
IQ Hedge Multi-Strategy Tracker ETF (QAI)
IQ Hedge Macro Tracker ETF (MCRO)
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 South Korea Small Cap ETF (SKOR)
IQ Global Agribusiness Small Cap ETF (CROP)
IQ Global Oil Small Cap ETF (IOIL)
IQ US Real Estate Small Cap ETF (ROOF)
IQ Emerging Markets Mid Cap ETF (EMER)
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, 2012, there was a large divergence in performance between “risky” assets and those assets generally deemed to be “safe havens.” Leading the way on the positive side were long dated U.S. Treasury bonds that, despite a ratings downgrade by Standard and Poor’s in August, managed to attract significant investor assets looking for safety from the problems plaguing sovereign debt in peripheral Europe. The steady decline in U.S. interest rates and the commitment by the U.S. Federal Reserve to keep short term rates low into 2014 provided a tailwind for virtually all U.S. fixed income asset classes including corporate bonds, both investment grade and high yield. Also benefitting from the flight to quality trend were large cap U.S. equities, with small cap equities not doing as well. The ongoing search for yield in the very low interest environment also drove U.S. REITs higher.
Not surprisingly, non-U.S. assets did not fare as well during this time period. International equities (both developed and emerging markets) posted double digit losses as did economically sensitive commodities such as energy and industrial metals. The Euro was down sharply as debt issues in Greece dominated the headlines and caused some to question the viability of the single currency in its current form.
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.*
In order to expand its product line further and offer new and unique solutions to investors, IndexIQ launched three new funds since the end of our last fiscal year end (April 30, 2011). One such fund is the IQ Global Oil Small Cap ETF (ticker IOIL), the first ETF focused exclusively on small cap oil companies, located both in the U.S. and in other developed markets. Another example is the IQ U.S. Small Cap REIT ETF (ticker ROOF), the first ETF focused exclusively on small cap real estate companies. Finally, we launched the IQ Emerging Markets Mid Cap ETF (EMER), the first ETF focused exclusively on mid cap emerging markets companies.
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, 2012, the Fund (NAV) returned 0.65% versus –4.80% and 4.76% 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 the corporate bond market (high yield and investment grade), the U.S. large cap equity market and certain foreign currencies. The Fund also benefitted from positions in U.S. Short Term Treasury Bonds as interest rates remained at historical lows.
The primary drivers of negative performance were the Fund’s long and short exposures to international emerging equities, short exposure to real estate, and long exposure to commodities.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Hedge Multi-Strategy Tracker ETF Market Price2 | 0.68 | % | 4.54 | % | 14.78 | % | |||
IQ Hedge Multi-Strategy Tracker ETF NAV | 0.65 | % | 4.56 | % | 14.84 | % | |||
IQ Hedge Multi-Strategy Index | 0.89 | % | 5.03 | % | 16.45 | % | |||
HFRI Fund of Funds Composite Index | –4.80 | % | 4.38 | %3 | 14.12 | %3 | |||
S&P 500 Index | 4.76 | % | 21.12 | % | 81.17 | % |
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 4/30/2012. |
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 of the Fund was 0.75%.
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 (“HFRI FoF Composite Index”) is an equally weighted hedge fund index including over 650 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 their underlying indexes. 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, 2012, the Fund (NAV) returned –2.61% versus –4.80% and –4.07% 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 investment grade corporate bonds, U.S. Short Term Treasury Bonds, and the Yen. The Fund also benefitted from short positions in the Euro as economic conditions throughout Europe continued to deteriorate.
The primary driver of negative performance was the Fund’s exposure to emerging markets equity.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Hedge Macro Tracker ETF Market Price2 | –2.89 | % | 3.93 | % | 11.79 | % | |||
IQ Hedge Macro Tracker ETF NAV | –2.61 | % | 3.96 | % | 11.88 | % | |||
IQ Hedge Macro Index | –2.08 | % | 4.30 | % | 12.95 | % | |||
HFRI Fund of Funds Composite Index | –4.80 | % | 3.10 | %3 | 9.30 | %3 | |||
MSCI World Index | –4.07 | % | 12.86 | % | 41.93 | % |
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 4/30/2012. |
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 of the Fund was 0.75%.
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 (“HFRI FoF Composite Index”) is an equally weighted hedge fund index including over 650 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 their underlying indexes. 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 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, 2012, the Fund (NAV) returned 2.56% versus 0.14% 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 gold, long term bonds and U.S. and international equity markets. The Fund also benefitted from positions in short term bonds generally, although the continued low yields on short term U.S. Treasury bonds inhibited the performance of the Fund.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Real Return ETF Market Price2 | 2.83 | % | 2.09 | % | 5.32 | % | |||
IQ Real Return ETF NAV | 2.56 | % | 2.02 | % | 5.16 | % | |||
IQ Real Return Index | 3.11 | % | 2.61 | % | 6.69 | % | |||
Barclays Capital Short Term Treasury Bond Index | 0.14 | % | 0.23 | % | 0.57 | % |
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. |
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 (10/26/2009) 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 of the Fund was 0.48%.
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 their underlying indexes. 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.
11 |
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, 2012, the Fund (NAV) returned –11.30% versus –4.07% and –19.42% 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 and Fiber segment and negative exposure as a market hedge to international equity markets.
The primary drivers of negative performance were the Fund’s exposure to the Industrial Metals, Timber and Coal segments.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Global Resources ETF Market Price2 | –11.53 | % | 7.27 | % | 19.25 | % | |||
IQ Global Resources ETF NAV | –11.30 | % | 7.32 | % | 19.40 | % | |||
IQ Global Resources Index | –10.65 | % | 8.39 | % | 22.43 | % | |||
MSCI World Index | –4.07 | % | 8.02 | % | 21.38 | % | |||
Dow Jones-UBS Commodity Index | –19.42 | % | 1.88 | % | 4.79 | % |
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 of the Fund was 0.75%.
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.
13 |
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, 2012, the Fund (NAV) returned 2.16% versus –4.07% and 4.76% 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 Medco Health Solutions (MHS), El Paso Corp. (EP), Pharmasset (VRUS), Cove Energy PLC (COV LN) and Transatlantic Holdings (TRH).
The primary drivers of negative performance were the Fund’s positions in NYSE Euronext (NYX), MAN SE (MAN GY), and Valero Energy Corp. (VLO).
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Merger Arbitrage ETF Market Price2 | 2.09 | % | 2.02 | % | 5.03 | % | |||
IQ Merger Arbitrage ETF NAV | 2.16 | % | 2.19 | % | 5.46 | % | |||
IQ Merger Arbitrage Index | 2.88 | % | 2.88 | % | 7.21 | % | |||
MSCI World Index | –4.07 | % | 6.80 | % | 17.51 | % | |||
S&P 500 Index | 4.76 | % | 12.15 | % | 32.47 | % |
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. |
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 (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 of the Fund was 0.75%.
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.
15 |
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, 2012, the Fund (NAV) returned –15.08% versus –12.38% for the MSCI EAFE Index.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Food, Drug Retailing and Pharmaceuticals, and Biotechnology sectors. The Fund also benefitted from positions in Utilities and Services as well as Energy.
The primary driver of negative performance was the Fund’s allocation to Materials.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Australia Small Cap ETF Market Price2 | –15.76 | % | 3.20 | % | 6.86 | % | |||
IQ Australia Small Cap ETF NAV | –15.08 | % | 3.20 | % | 6.87 | % | |||
IQ Australia Small Cap Index | –14.84 | % | 4.02 | % | 8.66 | % | |||
MSCI EAFE Index | –12.38 | % | 1.96 | % | 4.18 | % |
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. |
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 (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 of the Fund was 0.69%.
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.
17 |
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, 2012, the Fund (NAV) returned –25.24% versus –12.38% for the MSCI EAFE Index.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Food and Drug, Retailing and Utilities sectors. The Fund also benefitted from positions in Health Care Equipment and Services as well as Telecommunication Services.
The primary driver of negative performance was the Fund’s allocation to Materials.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Canada Small Cap ETF Market Price2 | –25.79 | % | 3.23 | % | 6.93 | % | |||
IQ Canada Small Cap ETF NAV | –25.24 | % | 3.49 | % | 7.50 | % | |||
IQ Canada Small Cap Index | –24.76 | % | 4.28 | % | 9.24 | % | |||
MSCI EAFE Index | –12.38 | % | 1.96 | % | 4.18 | % |
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 of the Fund was 0.69%.
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.
19 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ South Korea Small Cap ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ South Korea Small Cap Index, which seeks to provide investors with a means of tracking the overall performance of small cap South Korean companies.
For the 12-month period ended April 30, 2012, the Fund (NAV) returned –22.87% versus –15.33% for the MSCI Emerging Markets Index.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Hotel Restaurant and Leisure, Health Care Equipment and Services, and Media industries. The Fund also benefitted from positions in Commercial Services and Supplies.
The primary drivers of negative performance were the Fund’s allocations to Capital Goods and Technology Hardware and Equipment stocks.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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 South Korea Small Cap ETF
(as of April 30, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ South Korea Small Cap ETF Market Price2 | –24.18 | % | –0.80 | % | –1.64 | % | |||
IQ South Korea Small Cap ETF NAV | –22.87 | % | –0.03 | % | –0.06 | % | |||
IQ South Korea Small Cap Index | –22.39 | % | 1.59 | % | 3.28 | % | |||
MSCI Emerging Markets Index | –15.33 | % | 0.83 | % | 1.70 | % |
1 | Fund Inception Date: 4/13/2010. |
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 (4/13/2010) to the first day of secondary market trading in shares of the Fund (4/14/2010), 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 of the Fund was 0.79%.
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 Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
As the Fund’s investments are concentrated in South Korea, the value of its shares will be affected by factors specific to South Korea and may fluctuate more widely than that of a fund which invests in a broad range of countries and in developed markets. Investments in South Korea can be impacted by several factors, including a natural disaster in South Korea, a reduction in trading activity with its key trading partners, labor-related issues (South Korea’s economic growth potential is susceptible to problems from large scale emigration, rigid labor regulations and ongoing labor relations issues, and the average age of South Korea’s workforce is rapidly increasing), and security issues, as any outbreak of hostilities between North and South Korea could have a severe adverse effect on the South Korean economy and its securities markets. 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, 2012, the Fund (NAV) returned –8.64%.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Agricultural Supplies and Logistics and Agricultural Machinery sectors.
The primary drivers of negative performance were the Fund’s allocations to Crop Production and Farming and Livestock Operations stocks.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
1 Year | Since Inception1 | ||||||||
Average Annual | Average Annual | Cumulative | |||||||
IQ Global Agribusiness Small Cap ETF Market Price2 | –9.76 | % | –1.85 | % | –2.05 | % | |||
IQ Global Agribusiness Small Cap ETF NAV | –8.64 | % | –1.24 | % | –1.38 | % | |||
IQ Global Agribusiness Small Cap Index | –8.14 | % | –1.44 | % | –1.60 | % |
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 of the Fund was 0.75%.
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 period since Fund (NAV) inception (May 4, 2011) through April 30, 2012, the Fund (NAV) returned –9.40%.
The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Equipment, Services and Drilling sector.
The primary drivers of negative performance were the Fund’s allocations to Exploration and Production stocks.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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, 2012)
Since Inception1 | |||
Cumulative | |||
IQ Global Oil Small Cap ETF Market Price2 | –9.70 | % | |
IQ Global Oil Small Cap ETF NAV | –9.40 | % | |
IQ Global Oil Small Cap Index | –8.66 | % |
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 of the Fund was 0.75%.
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 US 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 period since Fund (NAV) inception (June 13, 2011) through April 30, 2012, the Fund (NAV) returned 6.05% versus 13.77% 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 Mortgage REIT and Office and Residential REIT sectors. The Fund also benefitted from positions in Specialized REITs.
The primary driver of negative performance was the Fund’s allocation to Diversified REITs.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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 US Real Estate Small Cap ETF
(as of April 30, 2012)
Since Inception1 | |||
Cumulative | |||
IQ US Real Estate Small Cap ETF Market Price2 | 4.24 | % | |
IQ US Real Estate Small Cap ETF NAV | 6.05 | % | |
IQ US Real Estate Small Cap Index | 6.74 | % | |
Dow Jones U.S. Real Estate Index | 13.77 | % |
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 of the Fund was 0.69%.
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 |
Management’s Discussion of Fund Performance (unaudited) (continued) |
IQ Emerging Markets Mid Cap ETF
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Emerging Markets Mid Cap Index. The IQ Emerging Markets Mid Cap Index is a modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the mid capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in the emerging markets. The emerging markets generally include less developed markets in the Americas, Europe, Asia, and Africa/Middle East.
For the period since Fund (NAV) inception (July 12, 2011) through April 30, 2012, the Fund (NAV) returned –13.74% versus –11.39% for the MSCI Emerging Markets Index.
The principal positive contributor to Fund performance for the period was the Fund’s allocation to equities in the Utility sector.
The primary drivers of negative performance were the Fund’s allocations to Financial and Capital Goods stocks.
Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)
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 Emerging Markets Mid Cap ETF
(as of April 30, 2012)
Since Inception1 | ||
Cumulative | ||
IQ Emerging Markets Mid Cap ETF Market Price2 | –13.76% | |
IQ Emerging Markets Mid Cap ETF NAV | –13.74% | |
IQ Emerging Markets Mid Cap Index | –12.78% | |
MSCI Emerging Markets Index | –11.39% |
1 | Fund Inception Date: 7/12/2011. |
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. |
28 |
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 (7/12/2011) to the first day of secondary market trading in shares of the Fund (7/13/2011), 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 of the Fund was 0.76%.
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 Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
As the Fund’s investments are concentrated in emerging markets, the value of its shares will be subject to a greater risk of loss than investments in developed markets. Since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets. The Fund invests in the securities of mid capitalization companies, the value of which generally are more volatile than those of larger companies. 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 new and has limited operating history. 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 does not represent a complete investment program. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund.
29 |
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 11/1/11 to 4/30/12” 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.
30 |
Fund Expenses (unaudited) (continued) |
Beginning Account Value | Ending Account Value 4/30/12 | Annualized Expense Ratios for the Period 11/1/11 to 4/30/2012 | Expenses Paid for Period 11/1/11 to 4/30/2012* | |||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,014.10 | 0.75 | % | $ | 3.76 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.13 | 0.75 | % | $ | 3.77 | ||||||||
IQ Hedge Macro Tracker ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,014.38 | 0.75 | % | $ | 3.76 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.13 | 0.75 | % | $ | 3.77 | ||||||||
IQ Real Return ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,012.53 | 0.48 | % | $ | 2.40 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.48 | 0.48 | % | $ | 2.41 | ||||||||
IQ Global Resources ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 982.99 | 0.75 | % | $ | 3.70 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.13 | 0.75 | % | $ | 3.77 | ||||||||
IQ Merger Arbitrage ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,049.19 | 0.75 | % | $ | 3.82 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.13 | 0.75 | % | $ | 3.77 | ||||||||
IQ Australia Small Cap ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,008.59 | 0.69 | % | $ | 3.45 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.43 | 0.69 | % | $ | 3.47 | ||||||||
IQ Canada Small Cap ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 949.35 | 0.69 | % | $ | 3.34 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.43 | 0.69 | % | $ | 3.47 | ||||||||
IQ South Korea Small Cap ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 841.23 | 0.79 | % | $ | 3.62 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.93 | 0.79 | % | $ | 3.97 | ||||||||
IQ Global Agribusiness Small Cap ETF | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,053.88 | 0.75 | % | $ | 3.83 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.13 | 0.75 | % | $ | 3.77 | ||||||||
IQ Global Oil Small Cap ETF1 | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,061.81 | 0.75 | % | $ | 3.84 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.13 | 0.75 | % | $ | 3.77 | ||||||||
IQ US Real Estate Small Cap ETF2 | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,170.63 | 0.69 | % | $ | 3.72 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.43 | 0.69 | % | $ | 3.47 | ||||||||
IQ Emerging Markets Mid Cap ETF3 | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,032.04 | 0.76 | % | $ | 3.84 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.08 | 0.76 | % | $ | 3.82 |
* | Expenses are calculated using the Fund’s annualized expense ratio, multiplied by the average account value for the period, multiplied by 182/366 (to reflect the six-month period). |
1 | IQ Global Oil Small Cap ETF commenced operations on May 4, 2011. |
2 | IQ US Real Estate Small Cap ETF commenced operations on June 13, 2011. |
3 | IQ Emerging Markets Mid Cap ETF commenced operations on July 12, 2011. |
31 |
Portfolio Summaries (unaudited) |
April 30, 2012 |
SCHEDULES OF INVESTMENTS SUMMARY TABLE
IQ Hedge Multi-Strategy Tracker ETF Net Assets ($ mil): $196.4 | ||||
Investments | % of Net Assets | |||
Money Market Funds | 25.8 | % | ||
Corporate Bond Funds | 18.8 | |||
Aggregate Bond Funds | 14.8 | |||
Short-Term Treasury Bond Funds | 15.6 | |||
Equity Funds | 10.6 | |||
U.S. Small Cap Equity Fund | 7.3 | |||
Currency Harvest Fund | 6.7 | |||
High Yield Corporate Bond Funds | 3.4 | |||
Real Estate Fund | 2.8 | |||
Asset Allocation Fund | 2.2 | |||
Commodity Funds | 1.4 | |||
Total Investments | 109.4 | |||
Liabilities in Excess of Other Assets | (9.4 | ) | ||
Net Assets | 100.0 | % | ||
IQ Hedge Macro Tracker ETF | ||||
Net Assets ($ mil): $50.5 | ||||
% of | ||||
Investments | Net Assets | |||
Corporate Bond Funds | 40.2 | % | ||
Money Market Funds | 17.7 | |||
Short-Term Treasury Bond Funds | 16.1 | |||
Emerging Equity Funds | 14.6 | |||
International Bond Funds | 7.6 | |||
Commodity Funds | 5.9 | |||
Currency Harvest Fund | 5.9 | |||
Asset Allocation Funds | 4.7 | |||
Total Investments | 112.7 | |||
Liabilities in Excess of Other Assets | (12.7 | ) | ||
Net Assets | 100.0 | % | ||
IQ Real Return ETF | ||||
Net Assets ($ mil): $27.5 | ||||
% of | ||||
Investments | Net Assets | |||
Short-Term Treasury Bond Funds | 69.8 | % | ||
Money Market Funds | 11.8 | |||
Long-Term Bond Fund | 10.4 | |||
Commodity Funds | 8.3 | |||
U.S. Large Cap Equity Funds | 7.0 | |||
U.S. Small Cap Equity Fund | 2.8 | |||
Currency Harvest Fund | 1.7 | |||
Total Investments | 111.8 | |||
Liabilities in Excess of Other Assets | (11.8 | ) | ||
Net Assets | 100.0 | % | ||
IQ Global Resources ETF | ||||
Net Assets ($ mil): $68.0 | ||||
% of | ||||
Investments | Net Assets | |||
Grains, Food & Fiber | 20.4 | % | ||
Coal | 17.1 | |||
Precious Metals | 15.8 | |||
Industrial Metals | 15.3 | |||
Money Market Funds | 12.9 | |||
Timber | 10.9 | |||
Water | 3.7 | |||
Energy | 3.7 | |||
Livestock | 2.3 | |||
Total Investments | 102.1 | |||
Liabilities in Excess of Other Assets | (2.1 | ) | ||
Net Assets | 100.0 | % | ||
IQ Merger Arbitrage ETF | ||||
Net Assets ($ mil): $26.0 | ||||
% of | ||||
Investments | Net Assets | |||
Money Market Funds | 22.3 | % | ||
Materials | 11.0 | |||
Energy | 10.9 | |||
Industrials | 9.8 | |||
Information Technology | 9.0 | |||
Oil, Gas & Consumable Fuels | 8.4 | |||
Consumer Staples | 6.0 | |||
Air Freight & Logistics | 4.1 | |||
Financials | 3.6 | |||
Chemicals | 3.5 | |||
Diversified Telecommunication Services | 2.8 | |||
Electrical Equipment | 1.9 | |||
Software | 1.9 | |||
Pharmaceuticals | 1.7 | |||
Media | 1.5 | |||
Personal Products | 1.1 | |||
Multi-Utilities | 1.0 | |||
Specialty Retail | 0.9 | |||
Insurance | 0.3 | |||
Total Investments | 101.7 | |||
Liabilities in Excess of Other Assets | (1.7 | ) | ||
Net Assets | 100.0 | % |
32 |
Portfolio Summaries (unaudited) (continued) |
April 30, 2012 |
IQ Australia Small Cap ETF | ||||
Net Assets ($ mil): $16.3 | ||||
% of | ||||
Investments | Net Assets | |||
Materials | 29.5 | % | ||
Industrials | 25.9 | |||
Consumer Discretionary | 16.0 | |||
Energy | 10.6 | |||
Money Market Fund | 9.2 | |||
Health Care | 6.6 | |||
Financials | 4.2 | |||
Consumer Staples | 3.3 | |||
Information Technology | 2.1 | |||
Utilities | 1.2 | |||
Telecommunication Services | 0.6 | |||
Total Investments | 109.2 | |||
Liabilities in Excess of Other Assets | (9.2 | ) | ||
Net Assets | 100.0 | % | ||
IQ Canada Small Cap ETF | ||||
Net Assets ($ mil): $31.4 | ||||
% of | ||||
Investments | Net Assets | |||
Materials | 39.3 | % | ||
Energy | 28.0 | |||
Money Market Fund | 18.0 | |||
Financials | 9.4 | |||
Industrials | 9.4 | |||
Metals & Mining | 3.0 | |||
Oil, Gas & Consumable Fuels | 2.8 | |||
Consumer Discretionary | 1.8 | |||
Utilities | 1.8 | |||
Consumer Staples | 1.5 | |||
Health Care | 0.9 | |||
Information Technology | 0.7 | |||
Telecommunication Services | 0.7 | |||
Total Investments | 117.3 | |||
Liabilities in Excess of Other Assets | (17.3 | ) | ||
Net Assets | 100.0 | % | ||
IQ South Korea Small Cap ETF | ||||
Net Assets ($ mil): $7.3 | ||||
% of | ||||
Investments | Net Assets | |||
Information Technology | 32.6 | % | ||
Consumer Discretionary | 23.8 | |||
Materials | 11.8 | |||
Financials | 10.3 | |||
Industrials | 9.4 | |||
Health Care | 8.7 | |||
Consumer Staples | 2.4 | |||
Money Market Fund | 0.0 | * | ||
Total Investments | 99.0 | |||
Other Assets in Excess of Liabilities | 1.0 | |||
Net Assets | 100.0 | % |
* Less than 0.05% |
IQ Global Agribusiness Small Cap ETF | ||||
Net Assets ($ mil): $39.7 | ||||
% of | ||||
Investments | Net Assets | |||
Crop Production and Farming | 40.1 | % | ||
Livestock Operations | 21.8 | |||
Agricultural Supplies and Logistics | 12.3 | |||
Biofuels | 9.4 | |||
Agricultural Chemicals | 9.4 | |||
Agricultural Machinery | 6.4 | |||
Money Market Funds | 2.7 | |||
Total Investments | 102.1 | |||
Liabilities in Excess of Other Assets | (2.1 | ) | ||
Net Assets | 100.0 | % | ||
IQ Global Oil Small Cap ETF | ||||
Net Assets ($ mil): $2.6 | ||||
% of | ||||
Investments | Net Assets | |||
Refining & Marketing | 35.0 | % | ||
Exploration & Production | 34.6 | |||
Equipment, Services & Drilling | 28.8 | |||
Money Market Funds | 13.1 | |||
Total Investments | 111.5 | |||
Liabilities in Excess of Other Assets | (11.5 | ) | ||
Net Assets | 100.0 | % |
33 |
Portfolio Summaries (unaudited) (continued) |
April 30, 2012 |
IQ US Real Estate Small Cap ETF | ||||
Net Assets ($ mil): $32.7 | ||||
% of | ||||
Investments | Net Assets | |||
Mortgage REITs | 27.0 | % | ||
Office REITs | 17.9 | |||
Retail REITs | 14.3 | |||
Specialized REITs | 14.0 | |||
Hotel REITs | 12.7 | |||
Diversified REITs | 8.8 | |||
Residential REITs | 5.1 | |||
Money Market Funds | 4.2 | |||
Total Investments | 104.0 | |||
Liabilities in Excess of Other Assets | (4.0 | ) | ||
Net Assets | 100.0 | % | ||
IQ Emerging Markets Mid Cap ETF | ||||
Net Assets ($ mil): $1.7 | ||||
% of | ||||
Investments | Net Assets | |||
Financials | 21.0 | % | ||
Industrials | 19.6 | |||
Materials | 15.5 | |||
Consumer Discretionary | 15.4 | |||
Information Technology | 8.5 | |||
Consumer Staples | 5.9 | |||
Utilities | 3.5 | |||
Health Care | 2.9 | |||
Transportation | 1.3 | |||
Telecommunications Services | 1.2 | |||
Technology | 1.1 | |||
Energy | 0.7 | |||
Communications | 0.5 | |||
Money Market Fund | 0.5 | |||
Total Investments | 97.6 | |||
Other Assets in Excess of Liabilities | 2.4 | |||
Net Assets | 100.0 | % |
34 |
Schedules of Investments — IQ Hedge Multi-Strategy Tracker ETF |
April 30, 2012 |
Shares | Value | |||||||
Investment Companies — 83.6% | ||||||||
Aggregate Bond Funds — 14.8% | ||||||||
iShares Barclays Aggregate Bond Fund | 127,621 | $ | 14,113,606 | |||||
SPDR Barclays Capital Aggregate | ||||||||
Bond ETF(a) | 5,032 | 293,366 | ||||||
Vanguard Total Bond Market ETF | 174,245 | 14,622,640 | ||||||
Total Aggregate Bond Funds | 29,029,612 | |||||||
Asset Allocation Fund — 2.2% | ||||||||
CurrencyShares Japanese Yen Trust(a)* | 34,771 | 4,282,396 | ||||||
Commodity Funds — 1.4% | ||||||||
iShares Silver Trust* | 20,452 | 615,810 | ||||||
PowerShares DB Gold Fund* | 22,784 | 1,314,409 | ||||||
PowerShares DB Commodity Index | ||||||||
Tracking Fund* | 30,241 | 859,147 | ||||||
Total Commodity Funds | 2,789,366 | |||||||
Corporate Bond Funds — 18.8% | ||||||||
iShares Barclays Credit Bond Fund(a) | 18,565 | 2,050,318 | ||||||
iShares iBoxx $ Investment Grade | ||||||||
Corporate Bond Fund | 299,118 | 34,841,265 | ||||||
Total Corporate Bond Funds | 36,891,583 | |||||||
Currency Harvest Fund — 6.7% | ||||||||
PowerShares DB G10 Currency | ||||||||
Harvest Fund* | 528,701 | 13,111,785 | ||||||
Equity Funds — 10.6% | ||||||||
iShares MSCI EAFE Index Fund | 202,069 | 10,861,209 | ||||||
SPDR S&P 500 ETF Trust(a) | 54,874 | 7,669,739 | ||||||
Vanguard MSCI EAFE ETF | 69,445 | 2,306,963 | ||||||
Total Equity Funds | 20,837,911 | |||||||
High Yield Corporate Bond Funds — 3.4% | ||||||||
iShares iBoxx $ High Yield Corporate | ||||||||
Bond Fund | 40,223 | 3,668,338 | ||||||
SPDR Barclays Capital High Yield | ||||||||
Bond ETF | 76,085 | 3,022,857 | ||||||
Total High Yield Corporate Bond Funds | 6,691,195 | |||||||
Real Estate Fund — 2.8% | ||||||||
SPDR Dow Jones International | ||||||||
Real Estate ETF(a) | 147,948 | 5,533,255 |
Shares | Value | |||||||
Investment Companies (continued) | ||||||||
Short-Term Treasury Bond Funds — 15.6% | ||||||||
iShares Barclays 1-3 Year Treasury | ||||||||
Bond Fund(a) | 173,609 | $ | 14,663,016 | |||||
iShares Barclays Short Treasury | ||||||||
Bond Fund | 31,159 | 3,433,410 | ||||||
SPDR Barclays Capital 1-3 Month | ||||||||
T-Bill ETF | 30,298 | 1,388,557 | ||||||
Vanguard Short-Term Bond ETF | 136,544 | 11,086,008 | ||||||
Total Short-Term Treasury Bond Funds | 30,570,991 | |||||||
U.S. Small Cap Equity Fund — 7.3% | ||||||||
iShares Russell 2000 Index Fund(a) | 176,502 | 14,372,558 | ||||||
Total Investment Companies — 83.6% | ||||||||
(Cost $161,579,025) | 164,110,652 | |||||||
Short-Term Investment — 13.6% | ||||||||
Money Market Fund — 13.6% | ||||||||
Invesco Treasury Portfolio Cash | ||||||||
Management, 0.02%(b) | ||||||||
(Cost $26,823,554) | 26,823,554 | 26,823,554 | ||||||
Investment of Cash Collateral For | ||||||||
Securities Loaned — 12.2% | ||||||||
Money Market Fund — 12.2% | ||||||||
BNY Mellon Overnight Government Fund | ||||||||
(Cost $23,898,639) | 23,898,639 | 23,898,639 | ||||||
Total Investments — 109.4% | ||||||||
(Cost $212,301,218) | $ | 214,832,845 | ||||||
Liabilities in Excess of Other | ||||||||
Assets — (9.4)%(c) | (18,417,437 | ) | ||||||
Net Assets — 100.0% | $ | 196,415,408 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $23,293,149; cash collateral of $23,898,639 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
(c) | Liabilities in Excess of Other Assets includes net unrealized appreciation on swap and futures contracts. |
ETF — Exchange Traded Fund
See notes to financial statements.
35 |
Schedules of Investments — IQ Hedge Multi-Strategy Tracker ETF (continued) |
April 30, 2012 |
Open futures contracts outstanding at April 30, 2012:
Type | Broker | Expiration Date | Number of Contracts Purchased (Sold) | Value at Trade Date | Value at April 30, 2012 | Unrealized Appreciation (Depreciation) | ||||||
E-Mini Future Euro FX Future | Morgan Stanley | June 2012 | (140) | $(11,450,119) | $(11,586,750) | $(136,631) | ||||||
Mini MSCI Emerging Market Index Future | Morgan Stanley | June 2012 | (161) | (8,399,397) | (8,206,170) | 193,227 | ||||||
$ 56,596 |
Cash posted as collateral to the broker for futures contracts was $1,146,600 at April 30, 2012.
Total return swap transactions outstanding at April 30, 2012:
Total Return Benchmark | Annual Financing Rate Received (Paid) | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation) | ||||||||||||
Proshares VIX Mid-Term Futures ETF | 0.54 | % | 4/17/2014 | $ | 712,737 | $ | — | |||||||||
iShares Dow Jones US Real Estate Index Fund | (0.71 | )% | 2/07/2013 | (13,776,951 | ) | — | ||||||||||
SPDR Barclays Capital Convertible Securities ETF | 0.54 | % | 4/17/2014 | 15,215,540 | — | |||||||||||
$ | — |
Cash posted as collateral to the broker for swap contracts was $5,700,515 at April 30, 2012.
Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either receives fees from, or pays fees to, the counterparty, depending upon the total return of the benchmark, and the agreed-upon financing rate.
See notes to financial statements.
36 |
Schedules of Investments — IQ Hedge Macro Tracker ETF |
April 30, 2012 |
Shares | Value | |||||
Investment Companies — 95.0% | ||||||
Asset Allocation Funds — 4.7% | ||||||
CurrencyShares Canadian Dollar Trust | 2,190 | $ | 220,467 | |||
CurrencyShares Japanese Yen Trust* | 17,379 | 2,140,398 | ||||
Total Asset Allocation Funds | 2,360,865 | |||||
Commodity Funds — 5.9% | ||||||
iShares Silver Trust* | 10,222 | 307,784 | ||||
PowerShares DB Gold Fund* | 46,552 | 2,685,585 | ||||
Total Commodity Funds | 2,993,369 | |||||
Corporate Bond Funds — 40.2% | ||||||
iShares Barclays Credit Bond Fund | 10,219 | 1,128,587 | ||||
iShares iBoxx $ Investment Grade | ||||||
Corporate Bond Fund | 164,652 | 19,178,665 | ||||
Total Corporate Bond Funds | 20,307,252 | |||||
Currency Harvest Fund — 5.9% | ||||||
PowerShares DB G10 Currency | ||||||
Harvest Fund* | 120,649 | 2,992,095 | ||||
Emerging Equity Funds — 14.6% | ||||||
iShares MSCI Emerging Markets | ||||||
Index Fund | 73,913 | 3,119,128 | ||||
Vanguard MSCI Emerging | ||||||
Markets ETF(a) | 100,071 | 4,256,020 | ||||
Total Emerging Equity Funds | 7,375,148 | |||||
International Bond Funds — 7.6% | ||||||
iShares JPMorgan USD Emerging | ||||||
Markets Bond Fund(a) | 24,041 | 2,747,165 | ||||
PowerShares Emerging Markets | ||||||
Sovereign Debt Portfolio | 37,633 | 1,072,164 | ||||
Total International Bond Fund | 3,819,329 | |||||
Short-Term Treasury Bond Funds — 16.1% | ||||||
iShares Barclays 1-3 Year Treasury | ||||||
Bond Fund(a) | 46,013 | 3,886,258 | ||||
iShares Barclays Short Treasury | ||||||
Bond Fund | 8,259 | 910,059 | ||||
SPDR Barclays Capital 1-3 Month | ||||||
T-Bill ETF | 8,030 | 368,015 | ||||
Vanguard Short-Term Bond ETF | 36,189 | 2,938,185 | ||||
Total Short-Term Treasury Bond Funds | 8,102,517 | |||||
Total Investment Companies — 95.0% | ||||||
(Cost $47,071,637) | 47,950,575 |
Shares | Value | |||||
Short-Term Investment — 4.9% | ||||||
Money Market Fund — 4.9% | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(b) | ||||||
(Cost $2,470,145) | 2,470,145 | $ | 2,470,145 | |||
Investment of Cash Collateral For | ||||||
Securities Loaned — 12.8% | ||||||
Money Market Fund — 12.8% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $6,488,800) | 6,488,800 | 6,488,800 | ||||
Total Investments — 112.7% | ||||||
(Cost $56,030,582) | $ | 56,909,520 | ||||
Liabilities in Excess of Other | ||||||
Assets — (12.7)%(c) | (6,433,955 | ) | ||||
Net Assets — 100.0% | $ | 50,475,565 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $6,321,194; cash collateral of $6,488,800 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
(c) | Liabilities in Excess of Other Assets includes net unrealized depreciation on swap and futures contracts. |
ETF — Exchange Traded Fund
See notes to financial statements.
37 |
Schedules of Investments — IQ Hedge Macro Tracker ETF (continued) |
April 30, 2012 |
Open futures contracts outstanding at April 30, 2012:
Type | Broker | Expiration Date | Number of Contracts Purchased (Sold) | Value at Trade Date | Value at April 30, 2012 | Unrealized Appreciation (Depreciation) | ||||||
DJ UBS Commodity Index Future | Morgan Stanley | June 2012 | (5) | $ (70,523) | $ (70,850) | $ (327) | ||||||
E-Mini Euro FX Future | Morgan Stanley | June 2012 | (16) | (1,311,161) | (1,324,200) | (13,039) | ||||||
Russell 2000 Index Mini Future | Morgan Stanley | June 2012 | (13) | (1,063,130) | (1,059,370) | 3,760 | ||||||
$ (9,606) |
Cash posted as collateral to the broker for futures contracts was $107,750 at April 30, 2012.
Total return swap contract outstanding at April 30, 2012:
Total Return Benchmark | Annual Financing Rate Received (Paid) | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation) | ||||
ProShares VIX Mid-Term Futures ETF | 0.54% | 04/17/2014 | $ 1,436,169 | — |
Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either receives fees from, or pays fees to, the counterparty, depending upon the total return of the benchmark, and the agreed-upon financing rate.
See notes to financial statements.
38 |
Schedules of Investments — IQ Real Return ETF |
April 30, 2012 |
Shares | Value | |||||
Investment Companies — 100.0% | ||||||
Commodity Funds — 8.3% | ||||||
PowerShares DB Gold Fund* | 28,095 | $ | 1,620,800 | |||
PowerShares DB Oil Fund(a)* | 22,232 | 671,206 | ||||
Total Commodity Funds | 2,292,006 | |||||
Currency Harvest Fund — 1.7% | ||||||
CurrencyShares Euro Trust | 3,439 | 452,951 | ||||
Long-Term Bond Fund — 10.4% | ||||||
iShares Barclays 20+ Year Treasury | ||||||
Bond Fund(a) | 24,462 | 2,869,882 | ||||
Short-Term Treasury Bond Funds — 69.8% | ||||||
iShares Barclays Short Treasury | ||||||
Bond Fund | 124,159 | 13,681,080 | ||||
SPDR Barclays Capital 1-3 Month | ||||||
T-Bill ETF | 120,726 | 5,532,873 | ||||
Total Short-Term Treasury Bond Funds | 19,213,953 | |||||
U.S. Large Cap Equity Funds — 7.0% | ||||||
iShares S&P 500 Index Fund | 81 | 11,362 | ||||
SPDR S&P 500 ETF Trust | 13,767 | 1,924,214 | ||||
Total U.S. Large Cap Equity Fund | 1,935,576 | |||||
U.S. Small Cap Equity Fund — 2.8% | ||||||
iShares Russell 2000 Index Fund(a) | 9,599 | 781,646 | ||||
Total Investment Companies — 100.0% | ||||||
(Cost $27,402,416) | $ | 27,546,015 |
Shares | Value | |||||
Short-Term Investment — 0.0%(b) | ||||||
Money Market Fund — 0.0%(b) | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(c) | ||||||
(Cost $6,123) | 6,123 | $ | 6,123 | |||
Investment of Cash Collateral For | ||||||
Securities Loaned — 11.8% | ||||||
Money Market Fund — 11.8% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $3,244,220) | 3,244,220 | 3,244,220 | ||||
Total Investments — 111.8% | ||||||
(Cost $30,652,759) | $ | 30,796,358 | ||||
Liabilities in Excess of Other | ||||||
Assets — (11.8)% | (3,253,646 | ) | ||||
Net Assets — 100.0% | $ | 27,542,712 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $3,162,781; cash collateral of $3,244,220 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Less than 0.05%. |
(c) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
ETF — Exchange Traded Fund
See notes to financial statements.
39 |
Schedules of Investments — IQ Global Resources ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 89.2% | ||||||
Australia — 8.8% | ||||||
Aquila Resources Ltd.(a)* | 74,528 | $ | 376,299 | |||
BHP Billiton Ltd. | 66,632 | 2,466,005 | ||||
Fortescue Metals Group Ltd. | 63,550 | 373,135 | ||||
Iluka Resources Ltd. | 8,162 | 144,450 | ||||
New Hope Corp. Ltd.(a) | 154,359 | 782,587 | ||||
Newcrest Mining Ltd. | 38,865 | 1,064,108 | ||||
OZ Minerals Ltd. | 6,597 | 64,077 | ||||
PanAust Ltd.* | 31,882 | 108,202 | ||||
Regis Resources Ltd.* | 22,355 | 98,211 | ||||
Whitehaven Coal Ltd.(a) | 86,134 | 477,043 | ||||
Woodside Petroleum Ltd. | 907 | 32,973 | ||||
Total Australia | 5,987,090 | |||||
Belgium — 0.2% | ||||||
Umicore SA(a) | 2,307 | 125,175 | ||||
Canada — 13.8% | ||||||
Agnico-Eagle Mines Ltd. | 8,571 | 342,337 | ||||
Alamos Gold, Inc. | 5,418 | 99,152 | ||||
B2Gold Corp.* | 17,665 | 66,694 | ||||
Barrick Gold Corp. | 49,983 | 2,021,682 | ||||
Canadian Natural Resources Ltd. | 1,255 | 43,597 | ||||
Canfor Corp.* | 33,583 | 367,800 | ||||
Cenovus Energy, Inc. | 842 | 30,554 | ||||
Centerra Gold, Inc. | 12,419 | 160,776 | ||||
China Gold International Resources | ||||||
Corp., Ltd.* | 16,877 | 76,702 | ||||
Domtar Corp. ADR | 8,575 | 750,141 | ||||
Eldorado Gold Corp. | 34,587 | 490,124 | ||||
Enbridge, Inc. | 840 | 35,192 | ||||
Goldcorp, Inc. | 39,860 | 1,526,296 | ||||
Husky Energy, Inc. | 1,074 | 28,014 | ||||
IAMGOLD Corp. | 18,862 | 233,878 | ||||
Imperial Oil Ltd. | 933 | 43,432 | ||||
Inmet Mining Corp. | 1,466 | 80,634 | ||||
Kinross Gold Corp. | 58,277 | 522,042 | ||||
New Gold, Inc.* | 22,639 | 206,236 | ||||
Pan American Silver Corp. | 5,153 | 100,196 | ||||
SEMAFO, Inc. | 13,968 | 70,975 | ||||
Silver Wheaton Corp.(a) | 17,798 | 543,335 | ||||
Suncor Energy, Inc. | 1,749 | 57,766 | ||||
Teck Resources Ltd., Class B | 11,868 | 442,790 | ||||
TransCanada Corp. | 780 | 34,312 | ||||
Uranium One, Inc.(a)* | 21,695 | 63,024 | ||||
West Fraser Timber Co., Ltd. | 9,876 | 434,146 | ||||
Yamana Gold, Inc. | 37,398 | 548,506 | ||||
Total Canada | 9,420,333 | |||||
Curacao — 0.2% | ||||||
Schlumberger Ltd. | 1,536 | 113,879 | ||||
Finland — 2.3% | ||||||
UPM-Kymmene Oyj | 121,871 | 1,559,793 | ||||
France — 1.1% | ||||||
GDF Suez(a) | 2,457 | 56,552 | ||||
Suez Environnement Co. | 18,792 | 265,013 | ||||
Total SA | 2,748 | 131,191 | ||||
Veolia Environnement | 17,876 | 261,796 | ||||
Total France | 714,552 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Germany — 0.4% | ||||||
Suedzucker AG | 7,699 | $ | 234,319 | |||
Hong Kong — 1.7% | ||||||
China Agri-Industries Holdings Ltd. | 190,676 | 140,591 | ||||
CNOOC Ltd. | 50,986 | 108,705 | ||||
Lee & Man Paper Manufacturing Ltd. | 1,142,998 | 536,304 | ||||
Shougang Fushan Resources Group Ltd. | 1,059,701 | 371,549 | ||||
Total Hong Kong | 1,157,149 | |||||
Ireland — 0.5% | ||||||
Kerry Group PLC, Class A | 7,318 | 334,497 | ||||
Italy — 0.1% | ||||||
Eni SpA | 4,366 | 96,907 | ||||
Japan — 3.7% | ||||||
Ajinomoto Co., Inc. | 27,916 | 361,165 | ||||
Hokuetsu Kishu Paper Co., Ltd. | 48,536 | 311,233 | ||||
INPEX Corp. | 4 | 26,551 | ||||
Itoham Foods, Inc. | 14,689 | 55,743 | ||||
Kurita Water Industries Ltd. | 4,939 | 121,302 | ||||
Maruha Nichiro Holdings, Inc. | 30,111 | 52,419 | ||||
Mitsubishi Materials Corp. | 27,117 | 81,509 | ||||
Mitsui & Co., Ltd. | 2,040 | 32,039 | ||||
Nippon Meat Packers, Inc. | 13,491 | 173,189 | ||||
Nippon Paper Group, Inc.(a) | 27,823 | 557,540 | ||||
Nisshin Seifun Group, Inc. | 10,783 | 132,078 | ||||
Nissin Foods Holdings Co., Ltd. | 5,107 | 192,204 | ||||
Sumitomo Metal Mining Co., Ltd. | 12,034 | 159,157 | ||||
Toyo Suisan Kaisha Ltd. | 4,707 | 120,851 | ||||
Yamazaki Baking Co., Ltd. | 9,201 | 136,324 | ||||
Total Japan | 2,513,304 | |||||
Jersey — 0.7% | ||||||
Randgold Resources Ltd. | 5,346 | 470,950 | ||||
Netherlands — 0.4% | ||||||
Nutreco NV | 2,121 | 154,118 | ||||
Royal Dutch Shell PLC, Class A | 4,089 | 145,420 | ||||
Total Netherlands | 299,538 | |||||
Norway — 0.4% | ||||||
Norsk Hydro ASA | 42,554 | 206,814 | ||||
Statoil ASA | 3,547 | 94,614 | ||||
Total Norway | 301,428 | |||||
Portugal — 0.7% | ||||||
Portucel-Empresa Produtora de | ||||||
Pasta e Papel SA | 176,357 | 447,228 | ||||
Singapore — 2.8% | ||||||
Golden Agri-Resources Ltd. | 496,344 | 294,846 | ||||
Olam International Ltd. | 104,488 | 191,698 | ||||
Sakari Resources Ltd. | 211,785 | 337,199 | ||||
Wilmar International Ltd. | 281,391 | 1,107,552 | ||||
Total Singapore | 1,931,295 | |||||
Spain — 0.2% | ||||||
Ebro Foods SA | 6,651 | 117,563 | ||||
Repsol YPF SA | 1,349 | 25,800 | ||||
Total Spain | 143,363 |
See notes to financial statements.
40 |
Schedules of Investments — IQ Global Resources ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Sweden — 5.9% | ||||||
Boliden AB | 5,698 | $ | 91,191 | |||
Holmen AB, B Shares | 14,954 | 397,018 | ||||
Sandvik AB | 222,709 | 3,527,781 | ||||
Total Sweden | 4,015,990 | |||||
Switzerland — 1.1% | ||||||
Aryzta AG* | 3,948 | 198,781 | ||||
Barry Callebaut AG* | 220 | 211,723 | ||||
Ferrexpo PLC | 12,108 | 57,451 | ||||
Lindt & Spruengli AG | 38 | 123,924 | ||||
Sulzer AG | 1,247 | 179,291 | ||||
Total Switzerland | 771,170 | |||||
United Kingdom — 11.2% | ||||||
African Barrick Gold Ltd. | 21,495 | 125,412 | ||||
Anglo American PLC | 28,675 | 1,102,634 | ||||
Antofagasta PLC | 20,930 | 401,389 | ||||
Associated British Foods PLC | 33,624 | 665,579 | ||||
BG Group PLC | 3,778 | 88,987 | ||||
BP PLC | 21,429 | 154,849 | ||||
Centrica PLC | 5,469 | 27,255 | ||||
Eurasian Natural Resources Corp. | 28,517 | 259,090 | ||||
Hochschild Mining PLC | 16,915 | 137,887 | ||||
Kazakhmys PLC | 11,085 | 154,983 | ||||
Lonmin PLC | 4,270 | 72,251 | ||||
New World Resources PLC, Class A | 50,729 | 335,107 | ||||
Pennon Group PLC | 13,334 | 159,362 | ||||
Petropavlovsk PLC | 10,309 | 79,818 | ||||
Rio Tinto PLC | 28,228 | 1,573,392 | ||||
Severn Trent PLC | 8,857 | 243,063 | ||||
Tate & Lyle PLC | 20,058 | 224,904 | ||||
United Utilities Group PLC | 25,394 | 255,045 | ||||
Vedanta Resources PLC | 6,582 | 130,075 | ||||
Weir Group PLC | 8,444 | 233,786 | ||||
Xstrata PLC | 63,867 | 1,221,191 | ||||
Total United Kingdom | 7,646,059 | |||||
United States — 33.0% | ||||||
AbitibiBowater, Inc.* | 23,748 | 314,661 | ||||
Alcoa, Inc. | 21,619 | 210,353 | ||||
Allied Nevada Gold Corp.* | 4,334 | 126,943 | ||||
Alpha Natural Resources, Inc.* | 41,976 | 677,073 | ||||
American Water Works Co., Inc. | 6,450 | 220,848 | ||||
Anadarko Petroleum Corp. | 573 | 41,949 | ||||
Apache Corp. | 435 | 41,734 | ||||
Aqua America, Inc. | 5,081 | 115,389 | ||||
Arch Coal, Inc. | 41,921 | 409,149 | ||||
Archer-Daniels-Midland Co. | 28,679 | 884,174 | ||||
Bunge Ltd. | 6,221 | 401,255 | ||||
Chevron Corp. | 2,171 | 231,342 | ||||
Cliffs Natural Resources, Inc. | 2,784 | 173,332 | ||||
Coeur d’Alene Mines Corp.* | 4,619 | 99,539 | ||||
ConAgra Foods, Inc. | 17,944 | 463,314 | ||||
ConocoPhillips | 1,397 | 100,067 | ||||
CONSOL Energy, Inc. | 39,690 | 1,319,296 | ||||
Corn Products International, Inc. | 3,260 | 186,016 | ||||
Devon Energy Corp. | 445 | 31,083 | ||||
El Paso Corp. | 821 | 24,359 | ||||
EOG Resources, Inc. | 298 | 32,724 | ||||
Exxon Mobil Corp. | 5,063 | 437,139 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
United States (continued) | ||||||
Flowserve Corp. | 2,012 | $ | 231,239 | |||
Freeport-McMoRan Copper | ||||||
& Gold, Inc. | 19,712 | 754,969 | ||||
General Mills, Inc. | 27,592 | 1,073,053 | ||||
Green Mountain Coffee Roasters, Inc.* | 8,080 | 393,900 | ||||
Halliburton Co. | 1,031 | 35,281 | ||||
Hershey Co. | 7,010 | 469,740 | ||||
Hormel Foods Corp. | 14,994 | 435,726 | ||||
IDEX Corp. | 3,051 | 132,139 | ||||
J.M. Smucker Co. | 4,650 | 370,279 | ||||
Joy Global, Inc. | 20,085 | 1,421,415 | ||||
Kapstone Paper And Packaging Corp.* | 11,223 | 202,687 | ||||
Kellogg Co. | 15,231 | 770,232 | ||||
Kraft Foods, Inc., Class A | 77,476 | 3,088,968 | ||||
Louisiana-Pacific Corp.* | 31,128 | 281,709 | ||||
Marathon Oil Corp. | 799 | 23,443 | ||||
McCormick & Co., Inc. | 4,986 | 278,767 | ||||
MeadWestvaco Corp. | 39,252 | 1,248,999 | ||||
National Oilwell Varco, Inc. | 466 | 35,304 | ||||
Newmont Mining Corp. | 25,389 | 1,209,786 | ||||
Occidental Petroleum Corp. | 919 | 83,831 | ||||
Peabody Energy Corp. | 52,181 | 1,623,351 | ||||
Pentair, Inc. | 3,032 | 131,407 | ||||
Ralcorp Holdings, Inc.* | 2,390 | 174,016 | ||||
Royal Gold, Inc. | 2,860 | 177,205 | ||||
Sara Lee Corp. | 25,531 | 562,703 | ||||
Seaboard Corp.* | 70 | 139,329 | ||||
Smithfield Foods, Inc.* | 9,672 | 202,725 | ||||
Tyson Foods, Inc., Class A | 17,735 | 323,664 | ||||
Total United States | 22,417,606 | |||||
Total Common Stocks — 89.2% | ||||||
(Cost $61,724,196) | 60,701,625 | |||||
Short-Term Investment — 9.3% | ||||||
Money Market Fund — 9.3% | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(b) | �� | |||||
(Cost $6,319,133) | 6,319,133 | 6,319,133 | ||||
Investment of Cash Collateral For | ||||||
Securities Loaned — 3.6% | ||||||
Money Market Fund — 3.6% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $2,441,356) | 2,441,356 | 2,441,356 | ||||
Total Investments — 102.1% | ||||||
(Cost $70,484,685) | $ | 69,462,114 | ||||
Liabilities in Excess of Other | ||||||
Assets — (2.1)%(c) | (1,423,611 | ) | ||||
Net Assets — 100.0% | $ | 68,038,503 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $2,320,861; cash collateral of $2,441,356 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
(c) | Liabilities in Excess of Other Assets includes net unrealized appreciation on futures contracts. |
ADR — American Depository Receipt
See notes to financial statements.
41 |
Schedules of Investments — IQ Global Resources ETF (continued) |
April 30, 2012 |
Open futures contracts outstanding at April 30, 2012:
Type | Broker | Expiration Date | Number of Contracts Purchased (Sold) | Value at Trade Date | Value at April 30, 2012 | Unrealized Appreciation (Depreciation) | ||||||
Mini MSCI EAFE Index Future | Morgan Stanley | June 2012 | (85) | $(6,511,545) | $(6,403,050) | $108,495 | ||||||
E-mini S&P 500 Future | Morgan Stanley | June 2012 | (95) | (6,604,670) | (6,619,600) | (14,930) | ||||||
$ 93,565 |
Cash posted as collateral to the broker for futures contracts was $842,500 at April 30, 2012.
See notes to financial statements.
42 |
Schedules of Investments — IQ Merger Arbitrage ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 79.4% | ||||||
Air Freight & Logistics — 4.1% | ||||||
TNT Express NV(a) | 87,459 | $ | 1,060,328 | |||
Chemicals — 3.5% | ||||||
Georgia Gulf Corp.* | 6,490 | 230,071 | ||||
Solutia, Inc. | 23,572 | 668,030 | ||||
Total Chemicals | 898,101 | |||||
Consumer Staples — 6.0% | ||||||
Viterra, Inc. | 96,499 | 1,554,025 | ||||
Diversified Telecommunication | ||||||
Services — 2.8% | ||||||
AboveNet, Inc.* | 8,778 | 730,066 | ||||
Electrical Equipment — 1.9% | ||||||
Thomas & Betts Corp.* | 6,715 | 482,876 | ||||
Energy — 10.9% | ||||||
El Paso Corp. | 79,203 | 2,349,953 | ||||
Flint Energy Services Ltd.* | 13,281 | 334,865 | ||||
NAL Energy Corp.(a) | 19,848 | 152,283 | ||||
Total Energy | 2,837,101 | |||||
Financials — 3.6% | ||||||
Delphi Financial Group, Inc., Class A | 13,611 | 618,212 | ||||
Harleysville Group, Inc. | 5,517 | 330,689 | ||||
Total Financials | 948,901 | |||||
Industrials — 9.8% | ||||||
ERA Mining Machinery Ltd.* | 2,048,694 | 232,393 | ||||
Goodrich Corp. | 16,514 | 2,071,846 | ||||
Wavin NV* | 18,252 | 253,291 | ||||
Total Industrials | 2,557,530 | |||||
Information Technology — 9.0% | ||||||
Motorola Mobility Holdings, Inc.* | 38,745 | 1,504,081 | ||||
Novellus Systems, Inc.* | 17,988 | 840,939 | ||||
Total Information Technology | 2,345,020 | |||||
Insurance — 0.3% | ||||||
Premafin Finanziaria SpA* | 258,319 | 77,269 | ||||
Materials — 11.0% | ||||||
Neo Material Technologies, Inc.* | 47,339 | 521,810 | ||||
Sundance Resources Ltd.* | 643,151 | 314,690 | ||||
Vulcan Materials Co. | 10,720 | 458,923 | ||||
Xstrata PLC | 81,916 | 1,566,303 | ||||
Total Materials | 2,861,726 | |||||
Media — 1.5% | ||||||
Astral Media, Inc., Class A | 7,947 | 392,705 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Multi-Utilities—1.0% | ||||||
CH Energy Group, Inc. | 2,571 | $ | 168,709 | |||
Hastings Diversified Utilities Fund | 43,985 | 94,786 | ||||
Total Multi-Utilities | 263,495 | |||||
Oil, Gas & Consumable Fuels — 8.4% | ||||||
Cove Energy PLC* | 344,304 | 1,266,358 | ||||
CVR Energy, Inc.* | 30,260 | 918,694 | ||||
Total Oil, Gas & Consumable Fuels | 2,185,052 | |||||
Personal Products — 1.1% | ||||||
Prestige Brands Holdings, Inc.* | 17,515 | 297,580 | ||||
Pharmaceuticals — 1.7% | ||||||
Ista Pharmaceuticals, Inc.* | 48,051 | 434,861 | ||||
Software — 1.9% | ||||||
Convio, Inc.(a)* | 11,659 | 186,544 | ||||
Quest Software, Inc.* | 13,643 | 317,473 | ||||
Total Software | 504,017 | |||||
Specialty Retail — 0.9% | ||||||
PEP Boys-Manny Moe & Jack | 15,363 | 229,369 | ||||
Total Common Stocks — 79.4% | ||||||
(Cost $19,747,881) | 20,660,022 | |||||
Short-Term Investment — 17.2% | ||||||
Money Market Fund — 17.2% | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(b) | ||||||
(Cost $4,475,828) | 4,475,828 | 4,475,828 | ||||
Investment of Cash Collateral For | ||||||
Securities Loaned — 5.1% | ||||||
Money Market Fund — 5.1% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $1,333,634) | 1,333,634 | 1,333,634 | ||||
Total Investments — 101.7% | ||||||
(Cost $25,557,343) | $ | 26,469,484 | ||||
Liabilities in Excess of Other | ||||||
Assets — (1.7)%(c) | (450,597 | ) | ||||
Net Assets — 100.0% | $ | 26,018,887 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $1,266,639; cash collateral of $1,333,634 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
(c) | Liabilities in Excess of Other Assets includes net unrealized appreciation on futures contracts. |
Open futures contracts outstanding at April 30, 2012:
Type | Broker | Expiration Date | Number of Contracts Purchased (Sold) | Value at Trade Date | Value at April 30, 2012 | Unrealized Appreciation (Depreciation) | ||||||
Mini MSCI EAFE Index Future | Morgan Stanley | June 2012 | (22) | $(1,680,149) | $(1,657,260) | $22,889 | ||||||
E-mini S&P 500 Future | Morgan Stanley | June 2012 | (25) | (1,738,711) | (1,742,000) | (3,289) | ||||||
$19,600 |
Cash posted as collateral to the broker for futures contracts was $219,500 at April 30, 2012.
See notes to financial statements.
43 |
Schedules of Investments — IQ Australia Small Cap ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 100.0% | ||||||
Consumer Discretionary — 16.0% | ||||||
APN News & Media Ltd. | 73,530 | $ | 64,301 | |||
Aristocrat Leisure Ltd.(a) | 87,297 | 281,730 | ||||
Billabong International Ltd. | 36,385 | 99,999 | ||||
Breville Group Ltd. | 12,660 | 58,122 | ||||
David Jones Ltd.(a) | 87,649 | 227,205 | ||||
Flight Centre Ltd. | 9,657 | 212,328 | ||||
G.U.D. Holdings Ltd. | 12,273 | 108,347 | ||||
Invocare Ltd. | 18,892 | 165,404 | ||||
JB Hi-Fi Ltd.(a) | 17,018 | 171,142 | ||||
Myer Holdings Ltd. | 101,805 | 249,063 | ||||
Navitas Ltd. | 35,976 | 147,939 | ||||
Pacific Brands Ltd. | 163,056 | 104,396 | ||||
Seven West Media Ltd. | 66,742 | 205,666 | ||||
Southern Cross Media Group Ltd. | 98,168 | 137,456 | ||||
Super Retail Group Ltd. | 23,083 | 185,996 | ||||
Ten Network Holdings Ltd. | 105,764 | 89,185 | ||||
Wotif.com Holdings Ltd. | 20,657 | 95,052 | ||||
Total Consumer Discretionary | 2,603,331 | |||||
Consumer Staples — 3.3% | ||||||
Goodman Fielder Ltd. | 294,046 | 200,506 | ||||
GrainCorp Ltd. | 34,719 | 333,611 | ||||
Total Consumer Staples | 534,117 | |||||
Energy — 10.6% | ||||||
Aurora Oil & Gas Ltd.* | 70,292 | 303,686 | ||||
AWE Ltd. | 93,718 | 170,251 | ||||
Beach Energy Ltd. | 212,836 | 310,202 | ||||
Coalspur Mines Ltd.(a)* | 75,723 | 131,648 | ||||
Dart Energy Ltd.* | 106,245 | 31,523 | ||||
Energy Resources of Australia Ltd.(a)* | 28,650 | 48,020 | ||||
Gloucester Coal Ltd.* | 12,990 | 106,563 | ||||
Karoon Gas Australia Ltd.* | 29,745 | 199,731 | ||||
Linc Energy Ltd.* | 54,140 | 63,126 | ||||
Paladin Energy Ltd.(a)* | 135,623 | 225,199 | ||||
Senex Energy Ltd.* | 119,361 | 141,036 | ||||
Total Energy | 1,730,985 | |||||
Financials — 4.2% | ||||||
Bank of Queensland Ltd. | 51,186 | 397,522 | ||||
FlexiGroup Ltd. | 32,524 | 76,860 | ||||
IOOF Holdings Ltd. | 31,566 | 204,729 | ||||
Total Financials | 679,111 | |||||
Health Care — 6.6% | ||||||
Acrux Ltd.* | 27,888 | 116,421 | ||||
Ansell Ltd. | 23,715 | 366,624 | ||||
Mesoblast Ltd.(a)* | 27,188 | 213,696 | ||||
Primary Health Care Ltd. | 81,663 | 240,593 | ||||
Sigma Pharmaceuticals Ltd. | 201,256 | 139,329 | ||||
Total Health Care | 1,076,663 | |||||
Industrials — 25.9% | ||||||
Ausdrill Ltd. | 42,717 | 182,329 | ||||
Boart Longyear Ltd. | 80,734 | 352,162 | ||||
Bradken Ltd. | 28,279 | 218,149 | ||||
Cabcharge Australia Ltd. | 19,286 | 128,497 | ||||
CSR Ltd. | 90,352 | 164,136 | ||||
Downer EDI Ltd.* | 72,451 | 272,285 | ||||
Emeco Holdings Ltd. | 110,509 | 119,647 | ||||
Forge Group Ltd. | 9,633 | 62,878 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Industrials (continued) | ||||||
GWA Group Ltd.(a) | 43,810 | $ | 89,621 | |||
Industrea Ltd. | 62,719 | 63,988 | ||||
Macmahon Holdings Ltd. | 106,626 | 77,702 | ||||
Mermaid Marine Australia Ltd. | 37,357 | 124,839 | ||||
Mineral Resources Ltd. | 20,971 | 261,109 | ||||
Monadelphous Group Ltd. | 15,047 | 364,047 | ||||
NRW Holdings Ltd. | 43,812 | 186,547 | ||||
SAI Global Ltd. | 34,935 | 190,210 | ||||
Seek Ltd. | 57,170 | 426,140 | ||||
Spotless Group Ltd. | 45,365 | 120,902 | ||||
Transfield Services Ltd. | 81,178 | 192,684 | ||||
Transpacific Industries Group Ltd.* | 153,811 | 136,106 | ||||
UGL Ltd. | 28,662 | 390,288 | ||||
Virgin Australia Holdings Ltd.* | 229,303 | 95,486 | ||||
Virgin Australia International | ||||||
Holdings Ltd.*(b) | 229,303 | — | ||||
Total Industrials | 4,219,752 | |||||
Information Technology — 2.1% | ||||||
carsales.com Ltd.(a) | 37,336 | 223,495 | ||||
Iress Market Technology Ltd.(a) | 17,453 | 122,280 | ||||
Total Information Technology | 345,775 | |||||
Materials — 29.5% | ||||||
Adelaide Brighton Ltd. | 84,817 | 269,311 | ||||
Ampella Mining Ltd.* | 36,167 | 40,099 | ||||
Aquarius Platinum Ltd. | 68,909 | 156,388 | ||||
Bathurst Resources Ltd.(a)* | 116,541 | 77,648 | ||||
Beadell Resources Ltd.* | 125,231 | 90,608 | ||||
BlueScope Steel Ltd. | 541,737 | 222,770 | ||||
CuDeco Ltd.* | 23,921 | 85,168 | ||||
Discovery Metals Ltd.* | 70,196 | 127,155 | ||||
DuluxGroup Ltd. | 62,884 | 202,943 | ||||
Gindalbie Metals Ltd.* | 138,611 | 85,138 | ||||
Grange Resources Ltd. | 64,328 | 40,181 | ||||
Gryphon Minerals Ltd.* | 58,520 | 57,876 | ||||
Imdex Ltd. | 35,792 | 93,898 | ||||
Independence Group NL | 40,708 | 183,925 | ||||
Integra Mining Ltd.* | 146,904 | 79,526 | ||||
Intrepid Mines Ltd.* | 91,087 | 81,551 | ||||
Ivanhoe Australia Ltd.* | 36,000 | 46,847 | ||||
Kingsgate Consolidated Ltd. | 25,290 | 163,235 | ||||
Medusa Mining Ltd. | 32,470 | 194,705 | ||||
Mineral Deposits Ltd.* | 15,033 | 94,214 | ||||
Mirabela Nickel Ltd.* | 73,088 | 37,283 | ||||
Mount Gibson Iron Ltd. | 112,246 | 129,123 | ||||
Nufarm Ltd. | 31,316 | 160,400 | ||||
OneSteel Ltd. | 220,345 | 299,354 | ||||
PanAust Ltd.* | 82,237 | 279,098 | ||||
Perseus Mining Ltd.* | 79,801 | 216,000 | ||||
Ramelius Resources Ltd.* | 53,126 | 42,586 | ||||
Regis Resources Ltd.* | 68,012 | 298,792 | ||||
Resolute Mining Ltd.* | 90,177 | 157,716 | ||||
Sandfire Resources NL* | 16,430 | 132,388 | ||||
Saracen Mineral Holdings Ltd.* | 91,198 | 55,066 | ||||
Silver Lake Resources Ltd.* | 38,561 | 129,263 | ||||
St. Barbara Ltd.* | 56,789 | 135,385 | ||||
Sundance Resources Ltd.* | 404,510 | 197,924 | ||||
Western Areas NL | 24,920 | 130,753 | ||||
Total Materials | 4,794,317 |
See notes to financial statements.
44 |
Schedules of Investments — IQ Australia Small Cap ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Telecommunication Services — 0.6% | ||||||
TPG Telecom Ltd. | 50,112 | $ | 94,686 | |||
Utilities — 1.2% | ||||||
Energy World Corp., Ltd.* | 147,336 | 88,963 | ||||
Envestra Ltd. | 139,259 | 113,806 | ||||
Total Utilities | 202,769 | |||||
Total Common Stocks — 100.0% | ||||||
(Cost $18,374,688) | 16,281,506 |
Shares | Value | |||||
Investment of Cash Collateral For | ||||||
Securities Loaned — 9.2% | ||||||
Money Market Fund — 9.2% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $1,498,535) | 1,498,535 | $ | 1,498,535 | |||
Total Investments — 109.2% | ||||||
(Cost $19,873,223) | $ | 17,780,041 | ||||
Liabilities in Excess of Other | ||||||
Assets — (9.2)% | (1,502,993 | ) | ||||
Net Assets — 100.0% | $ | 16,277,048 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $1,414,891; cash collateral of $1,498,535 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Security fair valued as determined in good faith in accordance with procedures established by the Board of Trustees. |
See notes to financial statements.
45 |
Schedules of Investments — IQ Canada Small Cap ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 99.3% | ||||||
Consumer Discretionary — 1.8% | ||||||
Great Canadian Gaming Corp.* | 17,688 | $ | 146,810 | |||
RONA, Inc. | 38,392 | 411,919 | ||||
Total Consumer Discretionary | 558,729 | |||||
Consumer Staples — 1.5% | ||||||
Jean Coutu Group (PJC), Inc., Class A | 33,597 | 481,196 | ||||
Energy — 28.0% | ||||||
Advantage Oil & Gas Ltd.* | 50,193 | 157,496 | ||||
AltaGas Ltd.(a) | 26,787 | 866,826 | ||||
Angle Energy, Inc.* | 24,414 | 123,559 | ||||
Bankers Petroleum Ltd.* | 74,706 | 258,611 | ||||
Bellatrix Exploration Ltd.* | 32,418 | 137,488 | ||||
Birchcliff Energy Ltd.* | 38,255 | 262,145 | ||||
BlackPearl Resources, Inc.* | 86,065 | 386,789 | ||||
Canacol Energy Ltd.* | 187,784 | 146,357 | ||||
Canyon Services Group, Inc. | 13,815 | 155,357 | ||||
Celtic Exploration Ltd.* | 25,621 | 375,517 | ||||
Cequence Energy Ltd.* | 38,104 | 60,167 | ||||
Crew Energy, Inc.* | 36,126 | 255,966 | ||||
Denison Mines Corp.(a)* | 92,879 | 170,161 | ||||
Ensign Energy Services, Inc.(a) | 38,290 | 553,450 | ||||
Flint Energy Services Ltd.* | 14,506 | 365,752 | ||||
Gasfrac Energy Services, Inc.* | 18,938 | 92,970 | ||||
Ithaca Energy, Inc.* | 78,221 | 234,358 | ||||
Legacy Oil + Gas, Inc.* | 38,049 | 331,983 | ||||
NAL Energy Corp.(a) | 45,703 | 350,654 | ||||
Nuvista Energy Ltd.* | 30,035 | 95,460 | ||||
PetroBakken Energy Ltd., Class A(a) | 23,177 | 335,474 | ||||
Petrobank Energy and Resources Ltd.* . | 32,109 | 460,209 | ||||
Poseidon Concepts Corp.(a) | 24,468 | 317,753 | ||||
Savanna Energy Services Corp.(a) | 25,578 | 197,799 | ||||
Southern Pacific Resource Corp.* | 102,598 | 163,044 | ||||
TransGlobe Energy Corp.* | 22,040 | 302,508 | ||||
Trican Well Service Ltd. | 44,351 | 641,506 | ||||
Trinidad Drilling Ltd. | 36,478 | 236,307 | ||||
Uranium One, Inc.(a)* | 141,561 | 411,235 | ||||
Whitecap Resources, Inc.* | 37,264 | 335,695 | ||||
Total Energy | 8,782,596 | |||||
Financials — 9.4% | ||||||
Canadian Western Bank(a) | 22,785 | 661,675 | ||||
Dundee Corp., Class A* | 12,582 | 311,637 | ||||
GMP Capital, Inc. | 15,216 | 94,720 | ||||
Industrial Alliance Insurance and | ||||||
Financial Services, Inc. | 27,306 | 870,630 | ||||
TMX Group, Inc. | 22,528 | 1,028,405 | ||||
Total Financials | 2,967,067 | |||||
Health Care — 0.9% | ||||||
CML Healthcare, Inc. | 27,116 | 293,406 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Industrials — 9.4% | ||||||
Aecon Group, Inc. | 16,845 | $ | 227,794 | |||
CAE, Inc. | 77,827 | 850,783 | ||||
Progressive Waste Solutions Ltd. | 35,377 | 767,376 | ||||
Russel Metals, Inc. | 18,131 | 497,527 | ||||
WestJet Airlines Ltd. | 41,738 | 601,176 | ||||
Total Industrials | 2,944,656 | |||||
Information Technology — 0.7% | ||||||
Wi-LAN, Inc. | 36,891 | 211,723 | ||||
Materials — 39.3% | ||||||
Alamos Gold, Inc.(a) | 35,951 | 657,922 | ||||
Argonaut Gold, Inc.* | 27,890 | 227,817 | ||||
Augusta Resource Corp.* | 31,171 | 79,824 | ||||
AuRico Gold, Inc.* | 84,972 | 780,956 | ||||
Aurizon Mines Ltd.* | 49,203 | 265,949 | ||||
Avion Gold Corp.* | 132,868 | 134,489 | ||||
B2Gold Corp.* | 100,394 | 379,037 | ||||
Banro Corp.* | 60,447 | 256,974 | ||||
Canfor Corp.* | 23,266 | 254,809 | ||||
Capstone Mining Corp.* | 88,969 | 265,660 | ||||
China Gold International Resources | ||||||
Corp., Ltd.(a)* | 47,828 | 217,367 | ||||
Colossus Minerals, Inc.* | 31,670 | 148,421 | ||||
Copper Mountain Mining Corp.* | 29,719 | 129,050 | ||||
Dundee Precious Metals, Inc.* | 29,111 | 226,594 | ||||
Eastern Platinum Ltd.* | 280,146 | 107,754 | ||||
Endeavour Silver Corp.* | 26,354 | 244,881 | ||||
Extorre Gold Mines Ltd.* | 27,933 | 118,750 | ||||
First Majestic Silver Corp.* | 31,732 | 499,130 | ||||
Fortuna Silver Mines, Inc.* | 37,755 | 158,594 | ||||
Great Basin Gold Ltd.* | 143,530 | 100,244 | ||||
Guyana Goldfields, Inc.(a)* | 25,309 | 70,193 | ||||
Harry Winston Diamond Corp.* | 25,607 | 365,462 | ||||
HudBay Minerals, Inc. | 51,894 | 546,280 | ||||
Jaguar Mining, Inc.* | 25,477 | 70,916 | ||||
Kirkland Lake Gold, Inc.* | 18,778 | 245,191 | ||||
Lake Shore Gold Corp.* | 120,773 | 117,356 | ||||
Major Drilling Group International, Inc. | 23,817 | 357,514 | ||||
Mercator Minerals Ltd.* | 78,019 | 93,975 | ||||
Methanex Corp. | 28,149 | 990,963 | ||||
Neo Material Technologies, Inc.* | 34,750 | 383,043 | ||||
Nevsun Resources Ltd. | 60,497 | 222,895 | ||||
North American Palladium Ltd.* | 43,254 | 130,469 | ||||
NovaGold Resources, Inc.* | 65,455 | 471,724 | ||||
Premier Gold Mines Ltd.* | 41,480 | 200,693 | ||||
Rainy River Resources Ltd.* | 25,331 | 118,969 | ||||
Romarco Minerals, Inc.* | 176,196 | 180,128 | ||||
Rubicon Minerals Corp.(a)* | 86,677 | 264,080 | ||||
Sabina Gold & Silver Corp.* | 35,990 | 100,180 | ||||
San Gold Corp.(a)* | 94,372 | 134,687 |
See notes to financial statements.
46 |
Schedules of Investments — IQ Canada Small Cap ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Materials (continued) | ||||||
SEMAFO, Inc. | 82,349 | $ | 418,434 | |||
Sherritt International Corp. | 89,457 | 511,597 | ||||
Silvercorp Metals, Inc. | 51,497 | 354,972 | ||||
Taseko Mines Ltd.* | 59,309 | 205,311 | ||||
Thompson Creek Metals Co., Inc.* | 50,725 | 302,414 | ||||
Torex Gold Resources, Inc.(a)* | 124,701 | 217,102 | ||||
Total Materials | 12,328,770 | |||||
Metals & Mining — 3.0% | ||||||
Pretium Resources, Inc.* | 19,149 | 323,495 | ||||
Rio Alto Mining Ltd.* | 51,678 | 220,218 | ||||
Scorpio Mining Corp.* | 59,657 | 63,404 | ||||
Silver Standard Resources, Inc.* | 24,331 | 351,438 | ||||
Total Metals & Mining | 958,555 | |||||
Oil, Gas & Consumable Fuels — 2.8% | ||||||
Gibson Energy, Inc.(a) | 29,614 | 678,639 | ||||
Surge Energy, Inc.* | 21,417 | 190,985 | ||||
Total Oil, Gas & Consumable Fuels | 869,624 | |||||
Telecommunication Services — 0.7% | ||||||
Manitoba Telecom Services, Inc. | 6,595 | 228,968 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Utilities — 1.8% | ||||||
Just Energy Group, Inc.(a) | 42,055 | $ | 552,958 | |||
Total Common Stocks — 99.3% | ||||||
(Cost $39,528,557) | 31,178,248 | |||||
Investment of Cash Collateral For | ||||||
Securities Loaned — 18.0% | ||||||
Money Market Fund — 18.0% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $5,656,632) | 5,656,632 | 5,656,632 | ||||
Total Investments — 117.3% | ||||||
(Cost $45,185,189) | $ | 36,834,880 | ||||
Liabilities in Excess of Other | ||||||
Assets — (17.3)% | (5,425,759 | ) | ||||
Net Assets — 100.0% | $ | 31,409,121 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $5,342,112; cash collateral of $5,656,632 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
See notes to financial statements.
47 |
Schedules of Investments — IQ South Korea Small Cap ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 98.9% | ||||||
Consumer Discretionary — 23.7% | ||||||
Agabang&Company | 3,772 | $ | 43,223 | |||
Daekyo Co., Ltd. | 10,214 | 54,047 | ||||
Dongyang Mechatronics Corp. | 5,966 | 72,323 | ||||
Grand Korea Leisure Co., Ltd. | 8,039 | 168,943 | ||||
Hanil E-Wha Co., Ltd. | 7,463 | 62,867 | ||||
Hansae Co., Ltd. | 4,905 | 38,107 | ||||
Hwa Shin Co., Ltd. | 6,132 | 58,329 | ||||
Hyundai Greenfood Co., Ltd. | 14,574 | 205,045 | ||||
Interpark Corp.* | 10,356 | 40,595 | ||||
Jcontentree Corp.* | 12,559 | 37,340 | ||||
Kolao Holdings | 3,106 | 34,629 | ||||
LG Fashion Corp. | 5,238 | 174,272 | ||||
Loen Entertainment, Inc. | 1,695 | 19,498 | ||||
Lotte Midopa Co., Ltd. | 3,621 | 45,978 | ||||
Paradise Co., Ltd. | 15,110 | 133,702 | ||||
Pharmicell Co., Ltd.* | 7,166 | 35,509 | ||||
Pyeong Hwa Automotive Co., Ltd. | 2,528 | 39,034 | ||||
SBS Media Holdings Co., Ltd. | 14,388 | 37,685 | ||||
SL Corp. | 4,249 | 73,503 | ||||
S.M. Entertainment Co.* | 4,343 | 155,831 | ||||
Ssangyong Motor Co.* | 9,697 | 52,341 | ||||
Sungwoo Hitech Co., Ltd. | 8,002 | 90,278 | ||||
Woongjin Chemical Co., Ltd.* | 68,940 | 47,582 | ||||
Woongjin Holdings Co., Ltd.* | 4,164 | 22,181 | ||||
Total Consumer Discretionary | 1,742,842 | |||||
Consumer Staples — 2.4% | ||||||
Daesang Corp. | 5,409 | 87,109 | ||||
DongA One Corp. | 4,811 | 12,771 | ||||
Harim Co., Ltd. | 7,514 | 32,313 | ||||
JW Shin-Yak Corp. | 5,710 | 29,103 | ||||
Samyang Foods Co., Ltd. | 907 | 18,258 | ||||
Total Consumer Staples | 179,554 | |||||
Financials — 10.3% | ||||||
Daishin Securities Co., Ltd. | 13,475 | 117,088 | ||||
Hanwha Securities Co., Ltd.* | 16,094 | 64,227 | ||||
LIG Insurance Co., Ltd. | 11,765 | 244,643 | ||||
Meritz Fire & Marine Insurance Co., Ltd. | 16,771 | 173,628 | ||||
SK Securities Co., Ltd.* | 59,082 | 62,212 | ||||
Tong Yang Securities, Inc. | 23,299 | 90,712 | ||||
Total Financials | 752,510 | |||||
Health Care — 8.7% | ||||||
Bukwang Pharmaceutical Co., Ltd. | 4,325 | 44,585 | ||||
Chabio & Diostech Co., Ltd.* | 17,164 | 134,107 | ||||
HanAll BioPharma Co., Ltd.* | 7,849 | 60,424 | ||||
Il Yang Pharmaceutical Co., Ltd.* | 3,495 | 75,459 | ||||
INFINITT Healthcare Co., Ltd.* | 3,429 | 33,224 | ||||
Medipost Co., Ltd.* | 1,901 | 182,678 | ||||
RNL BIO Co., Ltd.* | 19,658 | 73,579 | ||||
Yungjin Pharmaceutical Co., Ltd.* | 20,966 | 31,538 | ||||
Total Health Care | 635,594 | |||||
Industrials — 9.4% | ||||||
Halla Engineering & Construction Corp. | 4,132 | 42,595 | ||||
iMarketKorea, Inc. | 4,838 | 84,763 | ||||
S&T Dynamics Co., Ltd. | 5,976 | 72,444 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Industrials (continued) | ||||||
STX Corp. | 11,116 | $ | 122,459 | |||
STX Engine Co., Ltd. | 5,053 | 64,385 | ||||
Sung Kwang Bend Co., Ltd. | 4,310 | 88,479 | ||||
Taeyoung Engineering & Construction | 14,781 | 65,264 | ||||
Taihan Electric Wire Co., Ltd.* | 40,060 | 110,596 | ||||
Y G-1 Co., Ltd. | 3,166 | 35,999 | ||||
Total Industrials | 686,984 | |||||
Information Technology — 32.6% | ||||||
3s Korea Co., Ltd.* | 10,365 | 187,100 | ||||
Asia Pacific Systems, Inc.* | 5,715 | 56,891 | ||||
CrucialTec Co., Ltd.* | 4,649 | 37,147 | ||||
Curocom Co., Ltd.* | 16,785 | 38,170 | ||||
Daeduck Electronics Co., Ltd. | 10,626 | 109,069 | ||||
Daou Technology, Inc. | 7,402 | 74,012 | ||||
Duksan Hi-Metal Co., Ltd.* | 4,840 | 99,359 | ||||
GameHi Co., Ltd.* | 4,343 | 31,589 | ||||
Gemvax & Kael Co., Ltd.* | 5,431 | 189,824 | ||||
Haansoft, Inc. | 5,101 | 60,257 | ||||
Humax Co., Ltd. | 4,034 | 31,876 | ||||
ICD Co., Ltd.* | 3,118 | 63,319 | ||||
Iljin Display Co., Ltd. | 4,372 | 46,617 | ||||
Iljin Materials Co., Ltd. | 3,863 | 47,000 | ||||
InfraWare, Inc.* | 3,606 | 29,196 | ||||
JCentertainment Corp. | 1,629 | 41,802 | ||||
Jusung Engineering Co., Ltd.* | 6,824 | 54,646 | ||||
Lumens Co., Ltd.* | 10,673 | 53,454 | ||||
Melfas, Inc. | 3,550 | 63,296 | ||||
Neowiz Games Corp.* | 4,056 | 91,160 | ||||
NEPES Corp. | 4,686 | 79,197 | ||||
Osung LST Co., Ltd.* | 4,318 | 30,337 | ||||
PARTRON Co., Ltd. | 5,916 | 69,361 | ||||
POSCO ICT Co., Ltd. | 9,986 | 71,131 | ||||
SFA Engineering Corp. | 4,281 | 204,177 | ||||
Signetics Corp.* | 7,878 | 24,224 | ||||
Silicon Works Co., Ltd. | 2,687 | 67,286 | ||||
Simm Tech Co., Ltd. | 4,879 | 51,807 | ||||
SK Broadband Co., Ltd.* | 38,827 | 110,971 | ||||
SK Communications Co., Ltd.* | 4,072 | 28,573 | ||||
STS Semiconductor & | ||||||
Telecommunications Co., Ltd. | 10,978 | 65,084 | ||||
TOPTEC Co., Ltd.* | 2,014 | 27,088 | ||||
Webzen, Inc.* | 3,662 | 37,264 | ||||
WONIK IPS Co., Ltd.* | 14,264 | 90,749 | ||||
Woongjin Energy Co., Ltd.* | 5,264 | 31,813 | ||||
Total Information Technology | 2,394,846 | |||||
Materials — 11.8% | ||||||
Capro Corp. | 6,265 | 108,932 | ||||
CNK International Co., Ltd.* | 12,390 | 18,473 | ||||
Dongbu HiTek Co., Ltd.* | 7,721 | 55,066 | ||||
Dongbu Steel Co., Ltd.* | 7,764 | 38,472 | ||||
EG Corp. | 1,419 | 75,588 | ||||
Eugene Corp.* | 11,525 | 44,208 | ||||
Foosung Co., Ltd.* | 13,944 | 76,128 | ||||
Hansol Paper Co., Ltd. | 11,571 | 78,736 | ||||
Huchems Fine Chemical Corp. | 6,189 | 124,040 | ||||
Moorim P&P Co., Ltd. | 8,011 | 34,061 |
See notes to financial statements.
48 |
Schedules of Investments — IQ South Korea Small Cap ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Materials (continued) | ||||||
Namhae Chemical Corp. | 5,805 | $ | 47,873 | |||
Poongsan Corp. | 5,026 | 133,864 | ||||
Songwon Industrial Co., Ltd. | 4,260 | 31,287 | ||||
Total Materials | 866,728 | |||||
Total Common Stocks — 98.9% | ||||||
(Cost $7,551,716) | 7,259,058 | |||||
Rights* — 0.1% | ||||||
Consumer Discretionary — 0.1% | ||||||
Pharmicell Co., Ltd., expiring 6/20/12 | ||||||
(Cost $0) | 1,580 | 2,440 | ||||
Information Technology — 0.0%(a) | ||||||
3s Korea Co., Ltd., expiring 6/1/12 | ||||||
(Cost $0) | 318 | 1,688 | ||||
Total Rights — 0.1% | ||||||
(Cost $0) | 1,898 | 4,128 |
Shares | Value | |||||
Short-Term Investment — 0.0%(a) | ||||||
Money Market Fund — 0.0%(a) | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(b) | ||||||
(Cost $527) | 527 | $ | 527 | |||
Total Investments — 99.0% | ||||||
(Cost $7,552,243) | $ | 7,263,713 | ||||
Other Assets in Excess of | ||||||
Liabilities — 1.0% | 74,555 | |||||
Net Assets — 100.0% | $ | 7,338,268 |
* | Non-income producing securities. |
(a) | Less than 0.05%. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
See notes to financial statements.
49 |
Schedules of Investments — IQ Global Agribusiness Small Cap ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 99.4% | ||||||
Australia — 6.1% | ||||||
GrainCorp Ltd. | 170,005 | $ | 1,633,559 | |||
Nufarm Ltd. | 153,341 | 785,407 | ||||
Total Australia | 2,418,966 | |||||
Brazil — 3.8% | ||||||
Cosan Ltd. ADR Class A | 109,059 | 1,509,377 | ||||
China — 8.5% | ||||||
China Bluechemical Ltd. Class H | 1,518,737 | 1,086,525 | ||||
China Minzhong Food Corp., Ltd.(a)* | 348,027 | 236,275 | ||||
China Modern Dairy Holdings Ltd.* | 2,871,307 | 817,968 | ||||
First Tractor Co., Ltd. Class H | 343,789 | 320,845 | ||||
Shenguan Holdings Group Ltd. | 1,068,483 | 578,470 | ||||
Yongye International, Inc. ADR(a)* | 32,492 | 104,299 | ||||
Zhongpin, Inc. ADR* | 26,487 | 250,037 | ||||
Total China | 3,394,419 | |||||
Hong Kong — 10.7% | ||||||
Asian Citrus Holdings Ltd. | 571,724 | 341,955 | ||||
Chaoda Modern Agriculture | ||||||
(Holdings)Ltd.(c)* | 894,006 | — | ||||
China Agri-Industries Holdings Ltd. | 1,459,450 | 1,076,092 | ||||
China Foods Ltd. | 617,880 | 669,033 | ||||
China Yurun Food Group Ltd. | 1,166,585 | 1,493,242 | ||||
Global Bio-chem Technology Group | ||||||
Co., Ltd. | 1,640,647 | 323,572 | ||||
Sinofert Holdings Ltd.(a)* | 1,523,157 | 331,815 | ||||
Total Hong Kong | 4,235,709 | |||||
Indonesia — 4.2% | ||||||
PT Bakrie Sumatera Plantations Tbk | 9,291,446 | 303,295 | ||||
PT Japfa Comfeed Indonesia Tbk | 740,376 | 340,361 | ||||
PT Malindo Feedmill Tbk | 595,572 | 73,227 | ||||
PT Perusahaan Perkebunan London | ||||||
Sumatra Indonesia Tbk | 2,366,856 | 753,284 | ||||
PT Sampoerna Agro Tbk | 532,838 | 189,874 | ||||
Total Indonesia | 1,660,041 | |||||
Ireland — 2.2% | ||||||
Glanbia PLC | 114,628 | 870,849 | ||||
Japan — 27.1% | ||||||
Fuji Oil Co., Ltd. | 52,443 | 714,609 | ||||
House Foods Corp. | 62,445 | 1,054,241 | ||||
Iseki & Co., Ltd.(a) | 158,778 | 379,818 | ||||
Itoham Foods, Inc. | 123,254 | 467,731 | ||||
Kewpie Corp. | 92,748 | 1,393,921 | ||||
Kumiai Chemical Industry Co., Ltd. | 61,266 | 244,773 | ||||
Mitsui Sugar Co., Ltd. | 67,242 | 220,645 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Japan (continued) | ||||||
Morinaga Milk Industry Co., Ltd. | 168,192 | $ | 615,092 | |||
Nippon Flour Mills Co., Ltd. | 110,195 | 499,600 | ||||
Nippon Meat Packers, Inc. | 147,177 | 1,889,366 | ||||
Nisshin Oillio Group Ltd. | 85,188 | 358,484 | ||||
Nisshin Seifun Group, Inc. | 158,853 | 1,945,748 | ||||
NOF Corp. | 132,835 | 668,791 | ||||
Prima Meat Packers Ltd. | 96,390 | 189,532 | ||||
Yamatane Corp. | 75,222 | 109,284 | ||||
Total Japan | 10,751,635 | |||||
Luxembourg — 0.9% | ||||||
Adecoagro SA ADR* | 40,141 | 358,058 | ||||
Netherlands — 7.6% | ||||||
CSM NV | 58,000 | 819,092 | ||||
Nutreco NV | 30,105 | 2,187,516 | ||||
Total Netherlands | 3,006,608 | |||||
Singapore — 2.8% | ||||||
First Resources Ltd. | 317,408 | 482,282 | ||||
Indofood Agri Resources Ltd.* | 382,966 | 441,062 | ||||
Mewah International, Inc. | 549,576 | 204,320 | ||||
Total Singapore | 1,127,664 | |||||
Spain — 3.7% | ||||||
Deoleo SA* | 299,766 | 136,880 | ||||
Ebro Foods SA | 75,079 | 1,327,097 | ||||
Total Spain | 1,463,977 | |||||
Thailand — 1.7% | ||||||
GFPT PCL | 526,662 | 172,985 | ||||
Khon Kaen Sugar Industry PCL | 531,436 | 238,498 | ||||
Thai Vegetable Oil PCL | 326,264 | 247,218 | ||||
Total Thailand | 658,701 | |||||
United Kingdom — 1.7% | ||||||
Devro PLC | 141,451 | 708,151 | ||||
United States — 18.4% | ||||||
Andersons, Inc. | 15,749 | 793,750 | ||||
Chiquita Brands International, Inc.* | 39,266 | 333,761 | ||||
CVR Partners LP(a) | 16,142 | 464,083 | ||||
Dole Food Co., Inc.* | 31,140 | 264,067 | ||||
Lindsay Corp. | 10,886 | 727,076 | ||||
Smithfield Foods, Inc.* | 137,977 | 2,891,998 | ||||
Toro Co. | 25,774 | 1,841,810 | ||||
Total United States | 7,316,545 | |||||
Total Common Stocks — 99.4% | ||||||
(Cost $43,035,437) | 39,480,700 |
See notes to financial statements.
50 |
Schedules of Investments — IQ Global Agribusiness Small Cap ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Short-Term Investment — 0.2% | ||||||
Money Market Fund — 0.2% | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(b) | ||||||
(Cost $95,007) | 95,007 | $ | 95,007 | |||
Investment of Cash Collateral For | ||||||
Securities Loaned — 2.5% | ||||||
Money Market Fund — 2.5% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $976,954) | 976,954 | 976,954 | ||||
Shares | Value | |||||
Total Investments — 102.1% | ||||||
(Cost $44,107,398) | $ | 40,552,661 | ||||
Liabilities in Excess of Other | ||||||
Assets — (2.1)% | (843,995 | ) | ||||
Net Assets — 100.0% | $ | 39,708,666 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $938,701; cash collateral of $976,954 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
(c) | Security fair valued as determined in good faith in accordance with procedures established by the Board of Trustees. |
ADR — American Depository Receipt
LP — Limited Partnership
PCL — Public Company Limited
See notes to financial statements.
51 |
Schedules of Investments — IQ Global Oil Small Cap ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 98.4% | ||||||
Australia — 3.2% | ||||||
Caltex Australia Ltd. | 5,070 | $ | 72,680 | |||
Horizon Oil Ltd.* | 37,403 | 12,850 | ||||
Total Australia | 85,530 | |||||
Bermuda — 0.5% | ||||||
Archer Ltd.* | 6,903 | 14,400 | ||||
Canada — 9.3% | ||||||
Bankers Petroleum Ltd.* | 9,296 | 32,180 | ||||
Canyon Services Group, Inc. | 1,719 | 19,331 | ||||
Cequence Energy Ltd.* | 4,742 | 7,488 | ||||
Ensign Energy Services, Inc. | 4,765 | 68,874 | ||||
Ithaca Energy, Inc.* | 9,733 | 29,161 | ||||
Ivanhoe Energy, Inc. ADR* | 10,857 | 9,880 | ||||
Southern Pacific Resource Corp.* | 12,766 | 20,287 | ||||
TransGlobe Energy Corp. ADR* | 2,742 | 37,703 | ||||
Twin Butte Energy Ltd. | 7,194 | 19,952 | ||||
Total Canada | 244,856 | |||||
China — 1.3% | ||||||
China Automation Group Ltd. | 20,986 | 5,789 | ||||
Sinopec Shanghai Petrochemical Co., | ||||||
Ltd. Class H | 85,073 | 29,609 | ||||
Total China | 35,398 | |||||
Colombia — 2.1% | ||||||
Petrominerales Ltd. | 3,734 | 54,614 | ||||
Finland — 2.2% | ||||||
Neste Oil OYJ | 4,805 | 56,792 | ||||
France — 2.0% | ||||||
Etablissements Maurel et Prom | 3,162 | 52,606 | ||||
Hong Kong — 0.4% | ||||||
Sino Oil And Gas Holdings Ltd.* | 395,930 | 9,901 | ||||
Italy — 1.2% | ||||||
ERG SpA | 2,097 | 15,792 | ||||
Saras SpA* | 13,408 | 16,948 | ||||
Total Italy | 32,740 | |||||
Japan — 3.7% | ||||||
Cosmo Oil Co., Ltd. | 19,296 | 53,651 | ||||
Showa Shell Sekiyu K.K. | 6,778 | 42,869 | ||||
Total Japan | 96,520 | |||||
Netherlands — 9.3% | ||||||
Core Laboratories NV ADR(a) | 1,796 | 246,016 | ||||
Norway — 2.9% | ||||||
Det Norske Oljeselskap ASA* | 2,198 | 31,560 | ||||
DNO International ASA* | 21,966 | 34,837 | ||||
Norwegian Energy Co. ASA* | 7,569 | 9,474 | ||||
Total Norway | 75,871 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Philippines — 0.3% | ||||||
Petron Corp. | 25,900 | $ | 6,552 | |||
Russia — 1.5% | ||||||
Alliance Oil Co., Ltd.(a)* | 4,135 | 38,777 | ||||
Thailand — 5.6% | ||||||
Bangchak Petroleum PCL | 12,962 | 10,749 | ||||
Esso Thailand PCL | 44,852 | 17,066 | ||||
IRPC PCL | 374,565 | 53,109 | ||||
Thai Oil PCL | 30,687 | 67,362 | ||||
Total Thailand | 148,286 | |||||
United Arab Emirates — 3.7% | ||||||
Dragon Oil PLC | 9,307 | 88,639 | ||||
Exillon Energy PLC* | 4,236 | 9,541 | ||||
Total United Arab Emirates | 98,180 | |||||
United Kingdom — 4.4% | ||||||
Max Petroleum PLC* | 37,997 | 6,787 | ||||
Nautical Petroleum PLC* | 3,296 | 18,090 | ||||
Rockhopper Exploration PLC* | 10,671 | 58,959 | ||||
Salamander Energy PLC* | 5,052 | 20,394 | ||||
Xcite Energy Ltd.* | 6,960 | 11,754 | ||||
Total United Kingdom | 115,984 | |||||
United States — 44.8% | ||||||
Alon USA Energy, Inc. | 378 | 3,417 | ||||
Bonanza Creek Energy, Inc.* | 372 | 8,173 | ||||
BPZ Resources, Inc.(a)* | 3,743 | 15,159 | ||||
CVR Energy, Inc.* | 3,252 | 98,731 | ||||
Gulfport Energy Corp.* | 1,692 | 44,347 | ||||
Harvest Natural Resources, Inc.* | 1,289 | 8,868 | ||||
Key Energy Services, Inc.* | 5,683 | 71,947 | ||||
Kodiak Oil & Gas Corp.* | 9,879 | 87,429 | ||||
Lufkin Industries, Inc. | 1,246 | 95,743 | ||||
Magnum Hunter Resources Corp.(a)* | 4,840 | 30,056 | ||||
Oceaneering International, Inc. | 4,058 | 209,514 | ||||
PetroQuest Energy, Inc.* | 2,142 | �� | 12,938 | |||
Pioneer Drilling Co.* | 2,309 | 18,195 | ||||
SemGroup Corp. Class A* | 1,560 | 49,608 | ||||
Stone Energy Corp.* | 1,835 | 51,472 | ||||
Sunoco, Inc. | 4,011 | 197,702 | ||||
Tesoro Corp.* | 5,221 | 121,388 | ||||
VAALCO Energy, Inc.* | 2,145 | 19,455 | ||||
Western Refining, Inc. | 2,013 | 38,348 | ||||
Total United States | 1,182,490 | |||||
Total Common Stocks — 98.4% | ||||||
(Cost $2,997,613) | 2,595,513 |
See notes to financial statements.
52 |
Schedules of Investments — IQ Global Oil Small Cap ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Warrant — 0.0% | ||||||
United States — 0.0% | ||||||
Magnum Hunter Resources Corp, | ||||||
expiring 10/14/13* | ||||||
(Cost $0) | 265 | $ | — | |||
Short-Term Investment — 0.9% | ||||||
Money Market Fund — 0.9% | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(b) | ||||||
(Cost $22,890) | 22,890 | 22,890 | ||||
Investment of Cash Collateral For | ||||||
Securities Loaned — 12.2% | ||||||
Money Market Fund — 12.2% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $321,232) | 321,232 | 321,232 | ||||
Shares | Value | |||||
Total Investments — 111.5% | ||||||
(Cost $3,341,735) | $ | 2,939,635 | ||||
Liabilities in Excess of Other | ||||||
Assets — (11.5)% | (302,999 | ) | ||||
Net Assets — 100.0% | $ | 2,636,636 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $313,239; cash collateral of $321,232 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.ks of April 30, 2012. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
ADR — American Depository Receipt
K.K. — Kabushiki Kaisha
PCL — Public Company Limited
See notes to financial statements.
53 |
Schedules of Investments — IQ US Real Estate Small Cap ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 99.8% | ||||||
Diversified REITs — 8.8% | ||||||
CapLease, Inc. | 62,203 | $ | 258,142 | |||
Cousins Properties, Inc. | 97,742 | 768,252 | ||||
Investors Real Estate Trust | 78,893 | 569,608 | ||||
Redwood Trust, Inc. | 73,718 | 861,026 | ||||
Resource Capital Corp. | 77,859 | 420,439 | ||||
Total Diversified REITs | 2,877,467 | |||||
Hotel REITs — 12.7% | ||||||
Ashford Hospitality Trust, Inc. | 63,851 | 545,287 | ||||
FelCor Lodging Trust, Inc.* | 116,923 | 493,415 | ||||
Hersha Hospitality Trust | 144,090 | 828,517 | ||||
Pebblebrook Hotel Trust | 47,820 | 1,151,506 | ||||
Sunstone Hotel Investors, Inc.* | 111,333 | 1,135,597 | ||||
Total Hotel REITs | 4,154,322 | |||||
Mortgage REITs — 27.0% | ||||||
Anworth Mortgage Asset Corp. | 126,845 | 854,935 | ||||
ARMOUR Residential REIT, Inc.(a) | 166,283 | 1,160,655 | ||||
CreXus Investment Corp. | 71,911 | 754,346 | ||||
Dynex Capital, Inc. | 50,792 | 478,969 | ||||
Gramercy Capital Corp.* | 33,670 | 86,532 | ||||
Invesco Mortgage Capital | 108,304 | 1,910,483 | ||||
iStar Financial, Inc.(a)* | 67,659 | 468,200 | ||||
Newcastle Investment Corp. | 114,358 | 808,511 | ||||
NorthStar Realty Finance Corp. | 104,256 | 594,259 | ||||
PennyMac Mortgage Investment Trust | 28,141 | 570,981 | ||||
RAIT Financial Trust(a) | 46,688 | 225,970 | ||||
Starwood Property Trust, Inc. | 43,646 | 910,892 | ||||
Total Mortgage REITs | 8,824,733 | |||||
Office REITs — 17.9% | ||||||
Brandywine Realty Trust | 133,956 | 1,588,718 | ||||
First Industrial Realty Trust, Inc.* | 81,299 | 1,003,230 | ||||
First Potomac Realty Trust | 47,201 | 587,181 | ||||
Franklin Street Properties Corp. | 67,720 | 681,940 | ||||
Government Properties Income Trust | 33,120 | 769,047 | ||||
Lexington Realty Trust | 126,887 | 1,129,294 | ||||
MPG Office Trust, Inc.* | 40,203 | 84,828 | ||||
Total Office REITs | 5,844,238 | |||||
Residential REITs — 5.1% | ||||||
Associated Estates Realty Corp. | 39,837 | 674,440 | ||||
Education Realty Trust, Inc. | 86,159 | 971,012 | ||||
Total Residential REITs | 1,645,452 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Retail REITs — 14.3% | ||||||
Acadia Realty Trust | 40,135 | $ | 930,329 | |||
Cedar Realty Trust, Inc. | 53,346 | 278,466 | ||||
Getty Realty Corp.(a) | 25,387 | 401,622 | ||||
Glimcher Realty Trust | 127,232 | 1,258,324 | ||||
Inland Real Estate Corp. | 72,696 | 625,186 | ||||
Pennsylvania Real Estate | ||||||
Investment Trust | 52,076 | 733,751 | ||||
Ramco-Gershenson Properties Trust | 36,354 | 437,702 | ||||
Total Retail REITs | 4,665,380 | |||||
Specialized REITs — 14.0% | ||||||
CubeSmart | 114,557 | 1,438,836 | ||||
DCT Industrial Trust, Inc. | 230,827 | 1,368,804 | ||||
Medical Properties Trust, Inc. | 126,961 | 1,190,894 | ||||
Sabra Health Care REIT, Inc. | 34,602 | 579,239 | ||||
Total Specialized REITs | 4,577,773 | |||||
Total Common Stocks — 99.8% | ||||||
(Cost $30,792,432) | 32,589,365 | |||||
Short-Term Investment — 0.1% | ||||||
Money Market Fund — 0.1% | ||||||
Invesco Treasury Portfolio Cash | ||||||
Management, 0.02%(b) | ||||||
(Cost $53,747) | 53,747 | 53,747 | ||||
Investment of Cash Collateral For | ||||||
Securities Loaned — 4.1% | ||||||
Money Market Fund — 4.1% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $1,341,525) | 1,341,525 | 1,341,525 | ||||
Total Investments — 104.0% | ||||||
(Cost $32,187,704) | $ | 33,984,637 | ||||
Liabilities in Excess of Other | ||||||
Assets — (4.0)% | (1,315,786 | ) | ||||
Net Assets — 100.0% | $ | 32,668,851 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of securities on loan is $1,285,176; cash collateral of $1,341,525 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Rate shown represents annualized 7-day yield as of April 30, 2012. |
REITs — Real Estate Investment Trusts
See notes to financial statements.
54 |
Schedules of Investments — IQ Emerging Markets Mid Cap ETF |
April 30, 2012 |
Shares | Value | |||||
Common Stocks — 97.1% | ||||||
Bermuda — 0.5% | ||||||
Sihuan Pharmaceutical Holdings | ||||||
Group Ltd.(a) | 22,000 | $ | 8,366 | |||
Brazil — 6.4% | ||||||
Anhanguera Educacional | ||||||
Participacoes SA | 723 | 9,626 | ||||
BR Properties SA | 1,163 | 14,612 | ||||
Brookfield Incorporacoes SA | 2,348 | 6,235 | ||||
Companhia de Saneamento de | ||||||
Minas Gerais-Copasa MG | 452 | 10,654 | ||||
Diagnosticos da America SA | 1,454 | 10,477 | ||||
Ez Tec Empreendimentos E | ||||||
Participacoes SA | 750 | 8,334 | ||||
Gafisa SA | 3,322 | 6,155 | ||||
Iochpe-Maxion SA | 524 | 9,129 | ||||
Marfrig Alimentos SA | 875 | 4,873 | ||||
Mills Estruturas e Servicos de | ||||||
Engenharia SA | 504 | 6,596 | ||||
Raia Drogasil SA | 1,267 | 13,631 | ||||
Rossi Residencial SA | 1,488 | 6,268 | ||||
Total Brazil | 106,590 | |||||
Cayman Islands — 2.3% | ||||||
Bosideng International Holdings Ltd. | 22,000 | 6,352 | ||||
China Metal Recycling Holdings Ltd. | 6,000 | 6,884 | ||||
China Rongsheng Heavy Industries | ||||||
Group Holdings Ltd. | 32,500 | 8,127 | ||||
NVC Lighting Holdings Ltd. | 19,000 | 6,907 | ||||
Zhen Ding Technology Holding Ltd.* | 3,000 | 10,014 | ||||
Total Cayman Islands | 38,284 | |||||
Chile — 4.0% | ||||||
Administradora de Fondos de | ||||||
Pensiones Provida SA | 1,443 | 7,713 | ||||
Inversiones Aguas Metropolitanas SA | 9,061 | 15,988 | ||||
Parque Arauco SA* | 4,472 | 8,699 | ||||
Ripley Corp. SA | 7,185 | 8,022 | ||||
Salfacorp SA | 3,418 | 8,747 | ||||
Sociedad Matriz Saam SA* | 1 | — | ||||
Sonda SA | 3,130 | 9,334 | ||||
Vina Concha y Toro SA | 3,841 | 8,165 | ||||
Total Chile | 66,668 | |||||
China — 6.5% | ||||||
Ajisen (China) Holdings Ltd. | 4,000 | 4,486 | ||||
Beijing Capital International Airport | ||||||
Co., Ltd., Class H | 16,000 | 10,457 | ||||
China Molybdenum Co. Ltd., Class H* | 21,000 | 8,175 | ||||
China Shanshui Cement Group | 14,000 | 11,351 | ||||
China Shipping Development Co. Ltd., | ||||||
Class H* | 12,000 | 7,812 | ||||
Dongyue Group* | 10,000 | 7,489 | ||||
Guangshen Railway Co., Ltd., Class H* | 30,000 | 11,137 | ||||
Li Ning Co. Ltd. | 5,000 | 4,602 | ||||
Renhe Commercial Holdings Co., Ltd. | 64,000 | 3,712 | ||||
Semiconductor Manufacturing | ||||||
International Corp.* | 180,000 | 8,933 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
China (continued) | ||||||
Shui On Land Ltd. | 35,486 | $ | 14,866 | |||
Sinopec Shanghai Petrochemical | ||||||
Co., Ltd., Class H | 22,000 | 7,657 | ||||
Springland International Holdings Ltd. | 10,824 | 8,009 | ||||
Total China | 108,686 | |||||
Egypt — 1.4% | ||||||
Commercial International Bank | ||||||
Egypt SAE | 3,731 | 15,794 | ||||
Talaat Moustafa Group* | 10,455 | 7,316 | ||||
Total Egypt | 23,110 | |||||
Hong Kong — 2.6% | ||||||
Far East Horizon Ltd.* | 12,000 | 9,235 | ||||
Franshion Properties China Ltd. | 27,608 | 7,616 | ||||
KWG Property Holding Ltd. | 12,106 | 8,005 | ||||
Trinity Ltd. | 9,089 | 7,604 | ||||
Yingde Gases Group Co. Ltd. | 10,000 | 11,627 | ||||
Total Hong Kong | 44,087 | |||||
Hungary — 0.4% | ||||||
Magyar Telekom | ||||||
Telecommunications PLC | 2,643 | 6,675 | ||||
Indonesia — 4.7% | ||||||
Bank Pembangunan Daerah Jawa | ||||||
Barat Dan Banten Tbk PT | 91,000 | 10,198 | ||||
Bumi Serpong Damai PT | 59,000 | 9,180 | ||||
Global MediaCom Tbk PT | 58,000 | 10,476 | ||||
Harum Energy Tbk PT | 9,500 | 7,391 | ||||
PT Aneka Tambang Tbk | 72,000 | 13,475 | ||||
PT Lippo Karawaci Tbk | 140,500 | 12,689 | ||||
PT Perusahaan Perkebunan London | ||||||
Sumatra Indonesia Tbk | 27,220 | 8,663 | ||||
Salim Ivomas Pratama Tbk PT* | 44,000 | 6,559 | ||||
Total Indonesia | 78,631 | |||||
Malaysia — 4.9% | ||||||
Berjaya Corp. Berhad | 17,769 | 4,698 | ||||
Berjaya Sports Toto Berhad | 4,700 | 6,710 | ||||
Boustead Holdings Berhad | 3,400 | 5,876 | ||||
Bursa Malaysia Berhad | 3,900 | 8,699 | ||||
Dialog Group Berhad | 10,960 | 8,186 | ||||
Gamuda Berhad | 12,600 | 14,823 | ||||
Genting Plantations Berhad | 2,600 | 8,077 | ||||
IGB Corp. Berhad | 7,700 | 6,972 | ||||
Kencana Petroleum Berhad* | 10,000 | 10,905 | ||||
SP Setia Berhad | 5,422 | 6,486 | ||||
Total Malaysia | 81,432 | |||||
Mexico — 3.5% | ||||||
Bolsa Mexicana de Valores SAB de CV | 5,301 | 10,609 | ||||
Genomma Lab Internacional | ||||||
SAB de CV, Class B* | 4,603 | 8,104 | ||||
Grupo Aeroportuario del Pacifico | ||||||
SAB de CV, Class B | 4,545 | 17,710 |
See notes to financial statements.
55 |
Schedules of Investments — IQ Emerging Markets Mid Cap ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Mexico (continued) | ||||||
Grupo Aeroportuario del Sureste | ||||||
SAB de CV, Class B | 1,723 | $ | 14,166 | |||
Industrias CH SAB de CV, Class B* | 1,707 | 7,756 | ||||
Total Mexico | 58,345 | |||||
Peru — 0.6% | ||||||
Grana y Montero SA | 2,866 | 9,732 | ||||
Philippines — 3.4% | ||||||
Energy Development Corp. | 60,847 | 8,503 | ||||
International Container Terminal | ||||||
Services, Inc. | 8,440 | 13,593 | ||||
Jollibee Foods Corp. | 3,460 | 9,186 | ||||
Lepanto Consolidated Mining* | 106,000 | 3,841 | ||||
Philex Mining Corp. | 17,700 | 10,460 | ||||
Robinsons Land Corp. | 25,400 | 10,420 | ||||
Total Philippines | 56,003 | |||||
Poland — 1.3% | ||||||
Cyfrowy Polsat SA* | 1,569 | 6,921 | ||||
Enea SA | 1,236 | 6,526 | ||||
Synthos SA | 3,855 | 7,457 | ||||
Total Poland | 20,904 | |||||
Russia — 0.4% | ||||||
Aeroflot — Russian Airlines OJSC | 4,355 | 7,009 | ||||
South Africa — 9.9% | ||||||
Adcock Ingram Holdings Ltd. | 892 | 7,017 | ||||
Aveng Ltd. | 2,611 | 13,395 | ||||
AVI Ltd. | 1,523 | 9,472 | ||||
Barloworld Ltd. | 1,274 | 16,110 | ||||
Clicks Group Ltd. | 1,407 | 8,492 | ||||
JD Group Ltd. | 1,113 | 6,980 | ||||
Nampak Ltd. | 4,911 | 14,226 | ||||
Netcare Ltd. | 7,834 | 14,202 | ||||
Northam Platinum Ltd. | 1,717 | 7,391 | ||||
Pick n Pay Stores Ltd. | 1,839 | 10,685 | ||||
Pretoria Portland Cement Co., Ltd. | 3,218 | 12,864 | ||||
Reunert Ltd. | 1,228 | 11,408 | ||||
Sappi Ltd.* | 3,176 | 11,544 | ||||
Spar Group Ltd. | 1,023 | 16,044 | ||||
Telkom South Africa Ltd. | 2,054 | 6,303 | ||||
Total South Africa | 166,133 | |||||
South Korea — 13.8% | ||||||
BS Financial Group, Inc. | 1,163 | 11,989 | ||||
Cheil Worldwide, Inc. | 670 | 11,679 | ||||
DGB Financial Group, Inc. | 910 | 10,669 | ||||
Dongbu Insurance Co., Ltd. | 340 | 13,599 | ||||
Dongkuk Steel Mill Co., Ltd. | 510 | 7,965 | ||||
Hanjin Shipping Co., Ltd.* | 580 | 7,980 | ||||
Hanwha Corp. | 430 | 11,034 | ||||
Hotel Shilla Co., Ltd. | 250 | 11,702 | ||||
Hyosung Corp. | 233 | 11,937 | ||||
Hyundai Development Co. | 373 | 7,872 | ||||
Hyundai Hysco Co., Ltd. | 220 | 7,777 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
South Korea (continued) | ||||||
Hyundai Marine & Fire | ||||||
Insurance Co., Ltd. | 570 | $ | 14,627 | |||
Hyundai Securities Co., Ltd.* | 1,540 | 12,728 | ||||
Kolon Industries, Inc. | 116 | 6,426 | ||||
Korean Reinsurance Co. | 561 | 6,801 | ||||
Kumho Tire Co., Inc.* | 740 | 9,233 | ||||
LG Innotek* | 77 | 5,546 | ||||
LG International Corp. | 213 | 8,726 | ||||
LG Uplus Corp. | 1,576 | 7,823 | ||||
Samsung Fine Chemicals Co., Ltd. | 192 | 9,225 | ||||
SK Networks Co., Ltd. | 920 | 7,603 | ||||
SKC Co., Ltd. | 144 | 4,988 | ||||
Woongjin Coway Co., Ltd. | 390 | 12,493 | ||||
Woori Investment & Securities Co., Ltd.* | 1,000 | 9,910 | ||||
Total South Korea | 230,332 | |||||
Taiwan — 24.0% | ||||||
Advantech Co., Ltd. | 3,000 | 10,189 | ||||
Chicony Electronics Co., Ltd. | 5,000 | 9,758 | ||||
China Airlines Ltd. | 19,000 | 7,383 | ||||
China Life Insurance Co., Ltd. | 14,280 | 12,760 | ||||
China Petrochemical | ||||||
Development Corp. | 11,000 | 11,110 | ||||
E Ink Holdings, Inc. | 6,000 | 6,574 | ||||
Epistar Corp. | 6,000 | 14,585 | ||||
EVA Airways Corp. | 12,000 | 7,210 | ||||
Evergreen Marine Corp. | 11,999 | 7,066 | ||||
Far Eastern Department Stores, Ltd. | 6,720 | 7,247 | ||||
Formosa Taffeta Co., Ltd. | 8,000 | 7,559 | ||||
Giant Manufacturing Co., Ltd. | 2,000 | 10,066 | ||||
Highwealth Construction Corp. | 7,000 | 11,743 | ||||
Hiwin Technologies Corp. | 2,000 | 18,967 | ||||
Inventec Corp. | 21,000 | 8,088 | ||||
KGI Securities Co., Ltd. | 30,950 | 14,305 | ||||
Kinsus Interconnect Technology Corp. | 1,953 | 6,138 | ||||
LCY Chemical Corp. | 4,000 | 6,176 | ||||
Macronix International Co., Ltd. | 26,000 | 8,581 | ||||
Nan Kang Rubber Tire Co., Ltd. | 5,000 | 7,344 | ||||
Novatek Microelectronics Corp. | 3,890 | 11,787 | ||||
Pou Chen Corp. | 20,000 | 17,153 | ||||
Powertech Technology, Inc. | 4,400 | 7,479 | ||||
Radiant Opto-Electronics Corp. | 3,000 | 12,633 | ||||
Ruentex Industries Ltd. | 5,000 | 8,713 | ||||
Shin Kong Financial Holding Co., Ltd.* | 54,000 | 16,010 | ||||
Simplo Technology Co., Ltd. | 1,867 | 14,382 | ||||
Taishin Financial Holding Co., Ltd. | 51,760 | 20,024 | ||||
Taiwan Business Bank Co., Ltd. | 30,000 | 9,121 | ||||
Taiwan Fertilizer Co. Ltd. | 6,000 | 14,380 | ||||
Taiwan Glass Industry Corp. | 9,000 | 8,967 | ||||
TECO Electric And Machinery Co., Ltd. . | 13,000 | 9,525 | ||||
Tripod Technology Corp. | 3,440 | 10,129 | ||||
TSRC Corp. | 4,400 | 10,650 | ||||
Unimicron Technology Corp. | 9,000 | 10,245 | ||||
Walsin Lihwa Corp. | 29,000 | 8,449 | ||||
Wintek Corp. | 9,598 | 6,260 | ||||
WPG Holdings Ltd. | 9,440 | 12,895 | ||||
Total Taiwan | 401,651 |
See notes to financial statements.
56 |
Schedules of Investments — IQ Emerging Markets Mid Cap ETF (continued) |
April 30, 2012 |
Shares | Value | |||||
Common Stocks (continued) | ||||||
Thailand — 5.0% | ||||||
Electricity Generating PCL | 2,863 | $ | 9,217 | |||
Glow Energy PCL | 3,714 | 8,123 | ||||
Home Product Center PCL | 16,500 | 7,512 | ||||
Land And Houses PCL | 28,700 | 7,420 | ||||
Minor International PCL | 27,830 | 12,761 | ||||
Robinson Department Store PCL | 4,000 | 6,927 | ||||
Thai Union Frozen Products PCL | 4,500 | 10,646 | ||||
TMB Bank PCL | 221,700 | 12,257 | ||||
True Corp. PCL* | 66,700 | 7,982 | ||||
Total Thailand | 82,845 | |||||
Turkey — 1.5% | ||||||
TAV Havalimanlari Holding AS* | 1,694 | 8,899 | ||||
Turk Hava Yollari Anonim Ortakligi* | 7,108 | 10,871 | ||||
Turkiye Sise ve Cam Fabrikalari AS | 3,385 | 5,773 | ||||
Total Turkey | 25,543 | |||||
Total Common Stocks — 97.1% | ||||||
(Cost $1,838,547) | 1,621,026 | |||||
Right — 0.0%(b) | ||||||
Thailand — 0.0%(b) | ||||||
Thai Union Frozen Products Public | ||||||
Company Ltd.* | ||||||
(Cost $0) | 900 | 666 |
Shares | Value | |||||
Investment of Cash Collateral For | ||||||
Securities Loaned — 0.5% | ||||||
Money Market Fund — 0.5% | ||||||
BNY Mellon Overnight Government Fund | ||||||
(Cost $8,360) | 8,360 | $ | 8,360 | |||
Total Investments — 97.6% | ||||||
(Cost $1,846,907) | $ | 1,630,052 | ||||
Other Assets in Excess | ||||||
of Liabilities — 2.4%(c) | 39,674 | |||||
Net Assets — 100.0% | $ | 1,669,726 |
* | Non-income producing securities. |
(a) | All or a portion of security is on loan. The aggregate market value of the security on loan is $7,948; cash collateral of $8,360 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Less than 0.05% |
(c) | Other Assets in Excess of Liabilities includes net unrealized depreciation on swaps. |
PCL — Public Company Limited
Total return swap contracts outstanding at April 30, 2012:
Total Return Benchmark | Annual Financing Rate Received | Expiration Date | Notional Amount | Unrealized Appreciation (Depreciation) | ||||||||
Housing Development & Infrastructure Ltd. | 2.09 | % | 07/17/13 | $ | 9,421 | $ | 15 | |||||
Reliance Capital Ltd. | 2.09 | % | 07/17/13 | 5,691 | 3 | |||||||
Satyam Computer Services Ltd. | 2.09 | % | 07/17/13 | 8,112 | 11 | |||||||
Unitech Ltd. | 2.09 | % | 07/17/13 | 6,088 | (23 | ) | ||||||
Yes Bank Ltd. | 2.09 | % | 07/17/13 | 11,386 | (21 | ) | ||||||
$ | (15 | ) |
Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either receives fees from or pays fees to, the counterparty, depending upon the total return of the security, and the agreed-upon financing rate.
See notes to financial statements.
57 |
Statements of Assets and Liabilities |
April 30, 2012 |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | IQ Real Return ETF | IQ Global Resources ETF | IQ Merger Arbitrage ETF | ||||||||||||||||
Assets | ||||||||||||||||||||
Investments, at cost: | $ | 212,301,218 | $ | 56,030,582 | $ | 30,652,759 | $ | 70,484,685 | $ | 25,557,343 | ||||||||||
Investments, at value (including | ||||||||||||||||||||
securities on loan)1 | $ | 214,832,845 | $ | 56,909,520 | $ | 30,796,358 | $ | 69,462,114 | $ | 26,469,484 | ||||||||||
Cash | 27,754 | — | — | — | — | |||||||||||||||
Foreign currency2 | — | — | — | 5,441 | 13,489 | |||||||||||||||
Cash deposited at broker for | ||||||||||||||||||||
futures collateral | 1,146,600 | 107,750 | — | 842,500 | 219,500 | |||||||||||||||
Cash deposited at broker for | ||||||||||||||||||||
swap collateral | 5,700,515 | — | — | — | — | |||||||||||||||
Receivable for investments sold | 2,307,396 | — | — | 2,093 | 655,389 | |||||||||||||||
Variation margin receivable | 21,525 | 12,870 | — | 61,100 | 15,915 | |||||||||||||||
Dividend and interest receivable | 10,045 | 2,043 | 1,173 | 175,814 | 3,074 | |||||||||||||||
Total Assets | 224,046,680 | 57,032,183 | 30,797,531 | 70,549,062 | 27,376,851 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Collateral for securities on loan | ||||||||||||||||||||
(Note 2) | 23,898,639 | 6,488,800 | 3,244,220 | 2,441,356 | 1,333,634 | |||||||||||||||
Payable for capital shares | ||||||||||||||||||||
redeemed | 2,771,456 | — | — | — | — | |||||||||||||||
Advisory fees payable | 122,112 | 30,740 | 10,530 | 41,410 | 15,864 | |||||||||||||||
Compliance fees payable | 116 | 26 | 15 | 57 | 17 | |||||||||||||||
Due to broker | 836,392 | 23,794 | — | — | — | |||||||||||||||
Due to custodian | — | 12,900 | — | 27,682 | 8,395 | |||||||||||||||
Accrued expenses and other liabilities | 2,557 | 358 | 54 | 54 | 54 | |||||||||||||||
Total Liabilities | 27,631,272 | 6,556,618 | 3,254,819 | 2,510,559 | 1,357,964 | |||||||||||||||
Net Assets | $ | 196,415,408 | $ | 50,475,565 | $ | 27,542,712 | $ | 68,038,503 | $ | 26,018,887 | ||||||||||
Composition of Net Assets | ||||||||||||||||||||
Paid-in capital | $ | 208,708,217 | $ | 51,699,555 | $ | 27,551,354 | $ | 80,692,292 | $ | 26,861,595 | ||||||||||
Undistributed (accumulated) net | ||||||||||||||||||||
investment income (loss) | 659,666 | 152,347 | (1,837 | ) | 507,525 | (126,487 | ) | |||||||||||||
Undistributed (accumulated) net | ||||||||||||||||||||
realized gain (loss) on investments, | ||||||||||||||||||||
swap transactions, futures contracts | ||||||||||||||||||||
and foreign currency translations | (15,540,698 | ) | (2,245,669 | ) | (150,404 | ) | (12,234,659 | ) | (1,648,237 | ) | ||||||||||
Net unrealized appreciation | ||||||||||||||||||||
(depreciation) on investments, swap | ||||||||||||||||||||
transactions, futures contracts and | ||||||||||||||||||||
foreign currency translations | 2,588,223 | 869,332 | 143,599 | (926,655 | ) | 932,016 | ||||||||||||||
Net Assets | $ | 196,415,408 | $ | 50,475,565 | $ | 27,542,712 | $ | 68,038,503 | $ | 26,018,887 | ||||||||||
NET ASSET VALUE PER SHARE | ||||||||||||||||||||
Shares Outstanding (no par value, | ||||||||||||||||||||
unlimited shares authorized) | 7,100,000 | 1,850,000 | 1,050,000 | 2,350,000 | 1,000,000 | |||||||||||||||
Net Asset Value | $ | 27.66 | $ | 27.28 | $ | 26.23 | $ | 28.95 | $ | 26.02 | ||||||||||
1 Market value of securities on loan: | $ | 23,293,149 | $ | 6,321,194 | $ | 3,162,781 | $ | 2,320,861 | $ | 1,266,639 | ||||||||||
2 Cost of foreign currency: | $ | — | $ | — | $ | $ | 5,435 | $ | 13,210 |
See notes to financial statements.
58 |
Statements of Assets and Liabilities (continued) |
April 30, 2012 |
IQ Australia Small Cap ETF | IQ Canada Small Cap ETF | IQ South Korea Small Cap ETF | IQ Global Agribusiness Small Cap ETF | |||||||||||||
Assets | ||||||||||||||||
Investments, at cost: | $ | 19,873,223 | $ | 45,185,189 | $ | 7,552,243 | $ | 44,107,398 | ||||||||
Investments, at value (including securities on loan)1 | $ | 17,780,041 | $ | 36,834,880 | $ | 7,263,713 | $ | 40,552,661 | ||||||||
Foreign currency2 | 8,346 | 242,225 | 65,400 | 5,317 | ||||||||||||
Dividend and interest receivable | 23,417 | 14,395 | 14,071 | 152,307 | ||||||||||||
Total Assets | 17,811,804 | 37,091,500 | 7,343,184 | 40,710,285 | ||||||||||||
Liabilities | ||||||||||||||||
Collateral for securities on loan (Note 2) | 1,498,535 | 5,656,632 | — | 976,954 | ||||||||||||
Due to custodian | 27,040 | 8,026 | — | — | ||||||||||||
Advisory fees payable | 9,086 | 17,525 | 4,849 | 24,517 | ||||||||||||
Compliance fees payable | 41 | 142 | 13 | 94 | ||||||||||||
Accrued expenses and other liabilities | 54 | 54 | 54 | 54 | ||||||||||||
Total Liabilities | 1,534,756 | 5,682,379 | 4,916 | 1,001,619 | ||||||||||||
Net Assets | $ | 16,277,048 | $ | 31,409,121 | $ | 7,338,268 | $ | 39,708,666 | ||||||||
Composition of Net Assets | ||||||||||||||||
Paid-in capital | $ | 21,324,297 | $ | 47,261,493 | $ | 9,959,401 | $ | 45,727,854 | ||||||||
Undistributed (accumulated) net investment | ||||||||||||||||
income (loss) | 44,532 | 59,348 | (156 | ) | 83,218 | |||||||||||
Undistributed (accumulated) net realized gain (loss) | ||||||||||||||||
on investments, swap transactions, futures contracts and foreign currency translations | (2,998,631 | ) | (7,570,015 | ) | (2,332,855 | ) | (2,551,772 | ) | ||||||||
Net unrealized appreciation (depreciation) on | ||||||||||||||||
investments, swap transactions, futures contracts | ||||||||||||||||
and foreign currency translations | (2,093,150 | ) | (8,341,705 | ) | (288,122 | ) | (3,550,634 | ) | ||||||||
Net Assets | $ | 16,277,048 | $ | 31,409,121 | $ | 7,338,268 | $ | 39,708,666 | ||||||||
NET ASSET VALUE PER SHARE | ||||||||||||||||
Shares Outstanding (no par value, unlimited | ||||||||||||||||
shares authorized) | 700,000 | 1,200,000 | 300,000 | 1,600,000 | ||||||||||||
Net Asset Value | $ | 23.25 | $ | 26.17 | $ | 24.46 | $ | 24.82 | ||||||||
1 Market value of securities on loan: | $ | 1,414,891 | $ | 5,342,112 | $ | — | $ | 938,701 | ||||||||
2 Cost of foreign currency: | $ | 8,358 | $ | 233,630 | $ | 65,032 | $ | 5,321 |
See notes to financial statements.
59 |
Statements of Assets and Liabilities (continued) |
April 30, 2012 |
IQ Global Oil Small Cap ETF | IQ US Real Estate Small Cap ETF | IQ Emerging Markets Mid Cap ETF | ||||||||||
Assets | ||||||||||||
Investments, at cost: | $ | 3,341,735 | $ | 32,187,704 | $ | 1,846,907 | ||||||
Investments, at value (including securities on loan)1 | $ | 2,939,635 | $ | 33,984,637 | $ | 1,630,052 | ||||||
Cash | 1,372 | — | — | |||||||||
Foreign currency2 | 14,507 | — | 65,902 | |||||||||
Unrealized appreciation on swap transactions | — | — | 29 | |||||||||
Dividend and interest receivable | 4,156 | 43,803 | 3,330 | |||||||||
Total Assets | 2,959,670 | 34,028,440 | 1,699,313 | |||||||||
Liabilities | ||||||||||||
Unrealized depreciation on swap transactions | — | — | 44 | |||||||||
Due to custodian | — | — | 16,068 | |||||||||
Collateral for securities on loan (Note 2) | 321,232 | 1,341,525 | 8,360 | |||||||||
Advisory fees payable | 1,757 | 18,064 | 1,035 | |||||||||
Compliance fees payable | — | — | 5 | |||||||||
Due to broker | — | — | 4,030 | |||||||||
Accrued expenses and other liabilities | 45 | — | 45 | |||||||||
Total Liabilities | 323,034 | 1,359,589 | 29,587 | |||||||||
Net Assets | $ | 2,636,636 | $ | 32,668,851 | $ | 1,669,726 | ||||||
Composition of Net Assets | ||||||||||||
Paid-in capital | $ | 3,109,053 | $ | 30,929,256 | $ | 2,278,322 | ||||||
Undistributed (accumulated) net investment income (loss) | 10,305 | 154,244 | 71,233 | |||||||||
Undistributed (accumulated) net realized gain (loss) on | ||||||||||||
investments, swap transactions, futures contracts and | ||||||||||||
foreign currency translations | (80,835 | ) | (211,582 | ) | (462,102 | ) | ||||||
Net unrealized appreciation (depreciation) on investments, | ||||||||||||
swap transactions, futures contracts and foreign currency translations | (401,887 | ) | 1,796,933 | (217,727 | ) | |||||||
Net Assets | $ | 2,636,636 | $ | 32,668,851 | $ | 1,669,726 | ||||||
NET ASSET VALUE PER SHARE | ||||||||||||
Shares Outstanding (no par value, unlimited shares authorized) | 150,000 | 1,600,000 | 100,000 | |||||||||
Net Asset Value | $ | 17.58 | $ | 20.42 | $ | 16.70 | ||||||
1 Market value of securities on loan: | $ | 313,239 | $ | 1,285,176 | $ | 7,948 | ||||||
2 Cost of foreign currency: | $ | 14,406 | $ | — | $ | 66,747 |
See notes to financial statements.
60 |
Statements of Operations |
For the period ended April 30, 2012 |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | IQ Real Return ETF | IQ Global Resources ETF | IQ Merger Arbitrage ETF | ||||||||||||||||
Investment Income | ||||||||||||||||||||
Dividend income* | $ | 3,730,507 | $ | 706,055 | $ | 84,826 | $ | 1,421,437 | $ | 149,341 | ||||||||||
Interest income | 6 | — | — | — | 22 | |||||||||||||||
Securities lending income, net | ||||||||||||||||||||
(Note 2) | 13,150 | 2,395 | 1,759 | 9,930 | 499 | |||||||||||||||
Total investment income | 3,743,663 | 708,450 | 86,585 | 1,431,367 | 149,862 | |||||||||||||||
Expenses | ||||||||||||||||||||
Advisory fees | 1,209,116 | 241,971 | 96,162 | 520,268 | 173,536 | |||||||||||||||
Trustee fees | 3,830 | 737 | 503 | 1,762 | 576 | |||||||||||||||
Compliance fees | 1,561 | 308 | 193 | 700 | 228 | |||||||||||||||
Miscellaneous | 58 | 59 | 59 | 374 | 58 | |||||||||||||||
Total expenses | 1,214,565 | 243,075 | 96,917 | 523,104 | 174,398 | |||||||||||||||
Net investment income (loss) | 2,529,098 | 465,375 | (10,332 | ) | 908,263 | (24,536 | ) | |||||||||||||
Realized and Unrealized Gain (Loss) | ||||||||||||||||||||
on Investments, Swap transactions, | ||||||||||||||||||||
Futures Contracts and Foreign | ||||||||||||||||||||
Currency Translations | ||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||
Investment securities | (3,632,599 | ) | (1,350,336 | ) | (198,487 | ) | (12,487,957 | ) | (238,134 | ) | ||||||||||
In-Kind redemptions | 6,743,055 | 977,809 | 693,630 | 6,765,184 | 247,467 | |||||||||||||||
Swap transactions | (1,366,601 | ) | (23,794 | ) | — | — | — | |||||||||||||
Distributions by other investment | ||||||||||||||||||||
companies | 78,616 | 5,418 | — | — | — | |||||||||||||||
Futures contracts | (1,882,294 | ) | (15,530 | ) | — | (175,358 | ) | (105,112 | ) | |||||||||||
Foreign currency translations | — | — | — | (141,242 | ) | (14,637 | ) | |||||||||||||
Net realized gain (loss) | (59,823 | ) | (406,433 | ) | 495,143 | (6,039,373 | ) | (110,416 | ) | |||||||||||
Net change in net unrealized | ||||||||||||||||||||
appreciation (depreciation) on: | ||||||||||||||||||||
Investment securities | (713,139 | ) | (651,985 | ) | 16,786 | (5,196,743 | ) | 392,628 | ||||||||||||
Futures contracts | 230,639 | 58,791 | — | 925,613 | 328,605 | |||||||||||||||
Foreign currency translations | — | — | — | 1,259 | (726 | ) | ||||||||||||||
Net change in net unrealized | ||||||||||||||||||||
appreciation (depreciation) | (482,500 | ) | (593,194 | ) | 16,786 | (4,269,871 | ) | 720,507 | ||||||||||||
Net realized and unrealized | ||||||||||||||||||||
gain (loss) | (542,323 | ) | (999,627 | ) | 511,929 | (10,309,244 | ) | 610,091 | ||||||||||||
Net Increase (Decrease) in Net Assets | ||||||||||||||||||||
Resulting from Operations | $ | 1,986,775 | $ | (534,252 | ) | $ | 501,597 | $ | (9,400,981 | ) | $ | 585,555 | ||||||||
*Net of foreign taxes withheld of: | $ | — | $ | — | $ | — | $ | 93,642 | $ | 6,882 |
See notes to financial statements.
61 |
Statements of Operations (continued) |
For the period ended April 30, 2012 |
IQ Australia Small Cap ETF | IQ Canada Small Cap ETF | IQ South Korea Small Cap ETF | IQ Global Agribusiness Small Cap ETF | |||||||||||||
Investment Income | ||||||||||||||||
Dividend income* | $ | 739,115 | $ | 620,975 | $ | 89,847 | $ | 713,826 | ||||||||
Interest income | — | — | — | — | ||||||||||||
Securities lending income, net (Note 2) | 2,468 | 4,457 | — | 4,400 | ||||||||||||
Total investment income | 741,583 | 625,432 | 89,847 | 718,226 | ||||||||||||
Expenses | ||||||||||||||||
Advisory fees | 160,923 | 346,292 | 95,242 | 327,842 | ||||||||||||
Trustee fees | 657 | 1,433 | 335 | 1,122 | ||||||||||||
Compliance fees | 262 | 612 | 130 | 476 | ||||||||||||
Miscellaneous | 63 | 61 | 60 | 35 | ||||||||||||
Total expenses | 161,905 | 348,398 | 95,767 | 329,475 | ||||||||||||
Net investment income (loss) | 579,678 | 277,034 | (5,920 | ) | 388,751 | |||||||||||
Realized and Unrealized Gain (Loss) on | ||||||||||||||||
Investments, Swap transactions, Futures | ||||||||||||||||
Contracts and Foreign Currency Translations | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investment securities | (2,864,464 | ) | (4,606,141 | ) | (2,196,207 | ) | (2,551,762 | ) | ||||||||
In-Kind redemptions | 118,333 | (2,962,019 | ) | — | 1,425,617 | |||||||||||
Foreign currency translations | (25,475 | ) | (49,464 | ) | (30,448 | ) | (45,074 | ) | ||||||||
Net realized gain (loss) | (2,771,606 | ) | (7,617,624 | ) | (2,226,655 | ) | (1,171,219 | ) | ||||||||
Net change in net unrealized appreciation | ||||||||||||||||
(depreciation) on: | ||||||||||||||||
Investment securities | (4,773,070 | ) | (14,993,791 | ) | (2,033,135 | ) | (4,996,398 | ) | ||||||||
Foreign currency translations | (9,363 | ) | 8,070 | (1,749 | ) | 3,665 | ||||||||||
Net change in net unrealized appreciation | ||||||||||||||||
(depreciation) | (4,782,433 | ) | (14,985,721 | ) | (2,034,884 | ) | (4,992,733 | ) | ||||||||
Net realized and unrealized gain (loss) | (7,554,039 | ) | (22,603,345 | ) | (4,261,539 | ) | (6,163,952 | ) | ||||||||
Net Increase (Decrease) in Net Assets Resulting | ||||||||||||||||
from Operations | $ | (6,974,361 | ) | $ | (22,326,311 | ) | $ | (4,267,459 | ) | $ | (5,775,201 | ) | ||||
*Net of foreign taxes withheld of: | $ | 9,272 | $ | 109,580 | $ | 17,813 | $ | 62,097 |
See notes to financial statements.
62 |
Statements of Operations (continued) |
For the period ended April 30, 2012 |
IQ Global Oil Small Cap ETF** | IQ US Real Estate Small Cap ETF** | IQ Emerging Markets Mid Cap ETF** | ||||||||||
Investment Income | ||||||||||||
Dividend income* | $ | 38,018 | $ | 557,764 | $ | 40,998 | ||||||
Interest income | — | 4 | — | |||||||||
Securities lending income, net (Note 2) | 137 | 537 | 12 | |||||||||
Total investment income | 38,155 | 558,305 | 41,010 | |||||||||
Expenses | ||||||||||||
Advisory fees | 14,447 | 75,269 | 13,351 | |||||||||
Trustee fees | 44 | 137 | 50 | |||||||||
Compliance fees | 16 | 39 | 23 | |||||||||
Miscellaneous | 61 | 45 | 141 | |||||||||
Total expenses | 14,568 | 75,490 | 13,565 | |||||||||
Net investment income (loss) | 23,587 | 482,815 | 27,445 | |||||||||
Realized and Unrealized Gain (Loss) on Investments, Swap transactions, Futures Contracts and Foreign Currency Translations | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investment securities | (80,822 | ) | (212,653 | ) | (342,489 | ) | ||||||
In-Kind redemptions | 151,812 | 792,669 | (126,569 | ) | ||||||||
Swap transactions | — | — | (47,076 | ) | ||||||||
Foreign currency translations | (917 | ) | — | (5,359 | ) | |||||||
Net realized gain (loss) | 70,073 | 580,016 | (521,493 | ) | ||||||||
Net change in net unrealized appreciation (depreciation) on: | ||||||||||||
Investment securities | (402,100 | ) | 1,796,933 | (216,855 | ) | |||||||
Swap transactions | — | — | (15 | ) | ||||||||
Foreign currency translations | 213 | — | (857 | ) | ||||||||
Net change in net unrealized appreciation (depreciation) | (401,887 | ) | 1,796,933 | (217,727 | ) | |||||||
Net realized and unrealized gain (loss) | (331,814 | ) | 2,376,949 | (739,220 | ) | |||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (308,227 | ) | $ | 2,859,764 | $ | (711,775 | ) | ||||
*Net of foreign taxes withheld of: | $ | 4,068 | $ | — | $ | 8,477 |
** | Commencement of operations for the IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid Cap ETF was May 4, 2011, June 13, 2011 and July 12, 2011, respectively. |
See notes to financial statements.
63 |
Statements of Changes in Net Assets |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | IQ Real Return ETF | ||||||||||||||||||||||
For the Year Ended April 30, | For the Year Ended April 30, | For the Year Ended April 30, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Increase (Decrease) in Net | ||||||||||||||||||||||||
Assets from Operations | ||||||||||||||||||||||||
Net investment income (loss) | $ | 2,529,098 | $ | 2,505,702 | $ | 465,375 | $ | 289,455 | $ | (10,332 | ) | $ | (36,642 | ) | ||||||||||
Net realized gain (loss) | (59,823 | ) | 3,268,113 | (406,433 | ) | 383,464 | 495,143 | 202,114 | ||||||||||||||||
Net change in net unrealized | ||||||||||||||||||||||||
appreciation (depreciation) | (482,500 | ) | (1,235,296 | ) | (593,194 | ) | 942,888 | 16,786 | 135,743 | |||||||||||||||
Net increase (decrease) in net | ||||||||||||||||||||||||
assets resulting from | ||||||||||||||||||||||||
operations | 1,986,775 | 4,538,519 | (534,252 | ) | 1,615,807 | 501,597 | 301,215 | |||||||||||||||||
Dividends and Distributions to | ||||||||||||||||||||||||
Shareholders from: | ||||||||||||||||||||||||
Net investment income | (2,465,773 | ) | (1,865,556 | ) | (349,947 | ) | (133,209 | ) | — | (1,985 | ) | |||||||||||||
Net realized gains | — | — | — | — | (70,733 | ) | — | |||||||||||||||||
Total dividends and distributions | ||||||||||||||||||||||||
to shareholders | (2,465,773 | ) | (1,865,556 | ) | (349,947 | ) | (133,209 | ) | (70,733 | ) | (1,985 | ) | ||||||||||||
Capital Share Transactions | ||||||||||||||||||||||||
Proceeds from shares created | 180,656,444 | 166,884,050 | 43,686,434 | 38,032,383 | 38,986,694 | 12,661,434 | ||||||||||||||||||
Cost of shares redeemed | (114,838,725 | ) | (131,119,714 | ) | (20,628,831 | ) | (21,827,239 | ) | (24,689,903 | ) | (13,889,238 | ) | ||||||||||||
Net increase (decrease) from | ||||||||||||||||||||||||
capital share transactions | 65,817,719 | 35,764,336 | 23,057,603 | 16,205,144 | 14,296,791 | (1,227,804 | ) | |||||||||||||||||
Total increase (decrease) in | ||||||||||||||||||||||||
net assets | 65,338,721 | 38,437,299 | 22,173,404 | 17,687,742 | 14,727,655 | (928,574 | ) | |||||||||||||||||
Net Assets | ||||||||||||||||||||||||
Beginning of period | 131,076,687 | 92,639,388 | 28,302,161 | 10,614,419 | 12,815,057 | 13,743,631 | ||||||||||||||||||
End of period | $ | 196,415,408 | $ | 131,076,687 | $ | 50,475,565 | $ | 28,302,161 | $ | 27,542,712 | $ | 12,815,057 | ||||||||||||
Including undistributed | ||||||||||||||||||||||||
(accumulated) net investment | ||||||||||||||||||||||||
income (loss) as follows: | $ | 659,666 | $ | 729,719 | $ | 152,347 | $ | 48,478 | $ | (1,837 | ) | $ | 3,712 | |||||||||||
Changes in Shares Outstanding | ||||||||||||||||||||||||
Shares outstanding, beginning | ||||||||||||||||||||||||
of period | 4,704,000 | 3,404,000 | 1,000,000 | 400,000 | 500,000 | 550,000 | ||||||||||||||||||
Shares created | 6,550,000 | 6,100,000 | 1,600,000 | 1,400,000 | 1,500,000 | 500,000 | ||||||||||||||||||
Shares redeemed | (4,154,000 | ) | (4,800,000 | ) | (750,000 | ) | (800,000 | ) | (950,000 | ) | (550,000 | ) | ||||||||||||
Shares outstanding, end | ||||||||||||||||||||||||
of period | 7,100,000 | 4,704,000 | 1,850,000 | 1,000,000 | 1,050,000 | 500,000 |
See notes to financial statements.
64 |
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, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Increase (Decrease) in Net | ||||||||||||||||||||||||
Assets from Operations | ||||||||||||||||||||||||
Net investment income (loss) | $ | 908,263 | $ | 335,090 | $ | (24,536 | ) | $ | 10,611 | $ | 579,678 | $ | 719,662 | |||||||||||
Net realized gain (loss) | (6,039,373 | ) | 5,593,935 | (110,416 | ) | (686,091 | ) | (2,771,606 | ) | 1,180,666 | ||||||||||||||
Net change in net unrealized | ||||||||||||||||||||||||
appreciation (depreciation) | (4,269,871 | ) | 2,864,190 | 720,507 | (117,699 | ) | (4,782,433 | ) | 2,671,270 | |||||||||||||||
Net increase (decrease) in net | ||||||||||||||||||||||||
assets resulting from | ||||||||||||||||||||||||
operations | (9,400,981 | ) | 8,793,215 | 585,555 | (793,179 | ) | (6,974,361 | ) | 4,571,598 | |||||||||||||||
Dividends and Distributions to | ||||||||||||||||||||||||
Shareholders from: | ||||||||||||||||||||||||
Net investment income | (448,866 | ) | (167,873 | ) | — | (10,811 | ) | (1,324,792 | ) | (401,850 | ) | |||||||||||||
Net realized gains | (735,042 | ) | (246,632 | ) | — | (301,245 | ) | (637,635 | ) | (36,342 | ) | |||||||||||||
Total dividends and distributions | ||||||||||||||||||||||||
to shareholders | (1,183,908 | ) | (414,505 | ) | — | (312,056 | ) | (1,962,427 | ) | (438,192 | ) | |||||||||||||
Capital Share Transactions | ||||||||||||||||||||||||
Proceeds from shares created | 78,029,100 | 127,436,513 | 13,762,318 | 17,793,474 | 5,004,467 | 34,516,704 | ||||||||||||||||||
Cost of shares redeemed | (79,259,307 | ) | (64,210,652 | ) | (11,249,742 | ) | (25,369,787 | ) | (23,113,382 | ) | (4,300,185 | ) | ||||||||||||
Net increase (decrease) from | ||||||||||||||||||||||||
capital share transactions | (1,230,207 | ) | 63,225,861 | 2,512,576 | (7,576,313 | ) | (18,108,915 | ) | 30,216,519 | |||||||||||||||
Total increase (decrease) in | ||||||||||||||||||||||||
net assets | (11,815,096 | ) | 71,604,571 | 3,098,131 | (8,681,548 | ) | (27,045,703 | ) | 34,349,925 | |||||||||||||||
Net Assets | ||||||||||||||||||||||||
Beginning of period | 79,853,599 | 8,249,028 | 22,920,756 | 31,602,304 | 43,322,751 | 8,972,826 | ||||||||||||||||||
End of period | $ | 68,038,503 | $ | 79,853,599 | $ | 26,018,887 | $ | 22,920,756 | $ | 16,277,048 | $ | 43,322,751 | ||||||||||||
Including undistributed | ||||||||||||||||||||||||
(accumulated) net investment | ||||||||||||||||||||||||
income (loss) as follows: | $ | 507,525 | $ | 189,362 | $ | (126,487 | ) | $ | (50,878 | ) | $ | 44,532 | $ | 470,327 | ||||||||||
Changes in Shares Outstanding | ||||||||||||||||||||||||
Shares outstanding, beginning | ||||||||||||||||||||||||
of period | 2,400,000 | 300,000 | 900,000 | 1,200,000 | 1,400,000 | 350,000 | ||||||||||||||||||
Shares created | 2,650,000 | 4,250,000 | 550,000 | 700,000 | 200,000 | 1,200,000 | ||||||||||||||||||
Shares redeemed | (2,700,000 | ) | (2,150,000 | ) | (450,000 | ) | (1,000,000 | ) | (900,000 | ) | (150,000 | ) | ||||||||||||
Shares outstanding, end | ||||||||||||||||||||||||
of period | 2,350,000 | 2,400,000 | 1,000,000 | 900,000 | 700,000 | 1,400,000 |
See notes to financial statements.
65 |
Statements of Changes in Net Assets (continued) |
IQ Canada Small Cap ETF | IQ South Korea Small Cap ETF | |||||||||||||||
For the Year Ended April 30, | For the Year Ended April 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Increase (Decrease) in Net Assets from Operations | ||||||||||||||||
Net investment income (loss) | $ | 277,034 | $ | 182,010 | $ | (5,920 | ) | $ | 19,896 | |||||||
Net realized gain (loss) | (7,617,624 | ) | 1,496,712 | (2,226,655 | ) | 39,988 | ||||||||||
Net change in net unrealized appreciation | ||||||||||||||||
(depreciation) | (14,985,721 | ) | 6,520,343 | (2,034,884 | ) | 1,661,728 | ||||||||||
Net increase (decrease) in net assets resulting | ||||||||||||||||
from operations | (22,326,311 | ) | 8,199,065 | (4,267,459 | ) | 1,721,612 | ||||||||||
Dividends and Distributions to Shareholders from: | ||||||||||||||||
Net investment income | (400,361 | ) | (468,240 | ) | (36,683 | ) | (4,475 | ) | ||||||||
Net realized gains | — | — | (143,892 | ) | (4,965 | ) | ||||||||||
Total dividends and distributions to shareholders | (400,361 | ) | (468,240 | ) | (180,575 | ) | (9,440 | ) | ||||||||
Capital Share Transactions | ||||||||||||||||
Proceeds from shares created | 6,200,746 | 126,075,670 | 5,253,526 | 11,914,215 | ||||||||||||
Cost of shares redeemed | (72,557,289 | ) | (22,420,896 | ) | (9,643,684 | ) | — | |||||||||
Net increase (decrease) from capital share | ||||||||||||||||
transactions | (66,356,543 | ) | 103,654,774 | (4,390,158 | ) | 11,914,215 | ||||||||||
Total increase (decrease) in net assets | (89,083,215 | ) | 111,385,599 | (8,838,192 | ) | 13,626,387 | ||||||||||
Net Assets | ||||||||||||||||
Beginning of period | 120,492,336 | 9,106,737 | 16,176,460 | 2,550,073 | ||||||||||||
End of period | $ | 31,409,121 | $ | 120,492,336 | $ | 7,338,268 | $ | 16,176,460 | ||||||||
Including undistributed (accumulated) net investment | ||||||||||||||||
income (loss) as follows: | $ | 59,348 | $ | (94,035 | ) | $ | (156 | ) | $ | 3,214 | ||||||
Changes in Shares Outstanding | ||||||||||||||||
Shares outstanding, beginning of period | 3,400,000 | 350,000 | 500,000 | 100,000 | ||||||||||||
Shares created | 200,000 | 3,750,000 | 150,000 | 400,000 | ||||||||||||
Shares redeemed | (2,400,000 | ) | (700,000 | ) | (350,000 | ) | — | |||||||||
Shares outstanding, end of period | 1,200,000 | 3,400,000 | 300,000 | 500,000 |
See notes to financial statements.
66 |
Statements of Changes in Net Assets (continued) |
IQ Global Agribusiness Small Cap ETF | IQ Global Oil Small Cap ETF | IQ US Real Estate Small Cap ETF | IQ Emerging Markets Mid Cap ETF | |||||||||||||||||
For the Year Ended April 30, 2012 | For the Period March 21, 2011* to April 30, 2011 | For the Period May 4, 2011* to April 30, 2012 | For the Period June 13, 2011* to April 30, 2012 | For the Period July 12, 2011* to April 30, 2012 | ||||||||||||||||
Increase (Decrease) in Net Assets | ||||||||||||||||||||
from Operations | ||||||||||||||||||||
Net investment income (loss) | $ | 388,751 | $ | 72,410 | $ | 23,587 | $ | 482,815 | $ | 27,445 | ||||||||||
Net realized gain (loss) | (1,171,219 | ) | (1,715 | ) | 70,073 | 580,016 | (521,493 | ) | ||||||||||||
Net change in net unrealized | ||||||||||||||||||||
appreciation (depreciation) | (4,992,733 | ) | 1,442,099 | (401,887 | ) | 1,796,933 | (217,727 | ) | ||||||||||||
Net increase (decrease) in net assets | ||||||||||||||||||||
resulting from operations | (5,775,201 | ) | 1,512,794 | (308,227 | ) | 2,859,764 | (711,775 | ) | ||||||||||||
Dividends and Distributions to | ||||||||||||||||||||
Shareholders from: | ||||||||||||||||||||
Net investment income | (331,760 | ) | — | (12,378 | ) | (328,571 | ) | (23,390 | ) | |||||||||||
Net realized gains | — | — | — | — | — | |||||||||||||||
Total dividends and distributions | ||||||||||||||||||||
to shareholders | (331,760 | ) | — | (12,378 | ) | (328,571 | ) | (23,390 | ) | |||||||||||
Capital Share Transactions | ||||||||||||||||||||
Proceeds from shares created | 18,729,999 | 53,326,443 | 5,640,912 | 42,206,389 | 4,015,365 | |||||||||||||||
Cost of shares redeemed | (27,753,609 | ) | — | (2,683,671 | ) | (12,068,731 | ) | (1,610,474 | ) | |||||||||||
Net increase (decrease) from capital | ||||||||||||||||||||
share transactions | (9,023,610 | ) | 53,326,443 | 2,957,241 | 30,137,658 | 2,404,891 | ||||||||||||||
Total increase (decrease) in net assets | (15,130,571 | ) | 54,839,237 | 2,636,636 | 32,668,851 | 1,669,726 | ||||||||||||||
Net Assets | ||||||||||||||||||||
Beginning of period | 54,839,237 | — | — | — | — | |||||||||||||||
End of period | $ | 39,708,666 | $ | 54,839,237 | $ | 2,636,636 | $ | 32,668,851 | $ | 1,669,726 | ||||||||||
Including undistributed (accumulated) | ||||||||||||||||||||
net investment income as follows: | $ | 83,218 | $ | 70,695 | $ | 10,305 | $ | 154,244 | $ | 71,233 | ||||||||||
Changes in Shares Outstanding | ||||||||||||||||||||
Shares outstanding, beginning | ||||||||||||||||||||
of period | 2,000,000 | — | — | — | — | |||||||||||||||
Shares created | 750,000 | 2,000,000 | 300,000 | 2,250,000 | 200,000 | |||||||||||||||
Shares redeemed | (1,150,000 | ) | — | (150,000 | ) | (650,000 | ) | (100,000 | ) | |||||||||||
Shares outstanding, end of period | 1,600,000 | 2,000,000 | 150,000 | 1,600,000 | 100,000 |
* Commencement of operations.
See notes to financial statements.
67 |
Financial Highlights |
Selected Data for a Share of Capital Stock Outstanding |
IQ Hedge Multi-Strategy Tracker ETF | IQ Hedge Macro Tracker ETF | IQ Real Return ETF | ||||||||||||||||||||||||||||||||||||||
For the Year Ended April 30, | For the Period March 24, 20091 to April 30, | For the Year Ended April 30, | For the Period June 8 20091 to April 30, | For the Year Ended April 30, | For the Period October 26, 20091 to April 30, | |||||||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | |||||||||||||||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||||||||||||||||||
beginning of period | $ | 27.86 | $ | 27.21 | $ | 25.41 | $ | 25.00 | $ | 28.30 | $ | 26.54 | $ | 25.00 | $ | 25.63 | $ | 24.99 | $ | 25.00 | ||||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||||||
Net investment | ||||||||||||||||||||||||||||||||||||||||
income (loss)2 | 0.43 | 0.61 | 0.52 | 0.02 | 0.39 | 0.38 | 0.26 | (0.01 | ) | (0.08 | ) | (0.02 | ) | |||||||||||||||||||||||||||
Net realized and | ||||||||||||||||||||||||||||||||||||||||
unrealized gain (loss) | ||||||||||||||||||||||||||||||||||||||||
on investments | (0.27 | ) | 0.45 | 1.51 | 0.39 | (1.14 | ) | 1.53 | 1.53 | 0.66 | 0.72 | 0.01 | ||||||||||||||||||||||||||||
Distributions of net | ||||||||||||||||||||||||||||||||||||||||
realized gains by | ||||||||||||||||||||||||||||||||||||||||
other investment | ||||||||||||||||||||||||||||||||||||||||
companies | 0.01 | 0.00 | 3 | — | — | 0.00 | 3 | 0.00 | 3 | — | — | — | — | |||||||||||||||||||||||||||
Net increase (decrease) | ||||||||||||||||||||||||||||||||||||||||
in net assets resulting | ||||||||||||||||||||||||||||||||||||||||
from investment | ||||||||||||||||||||||||||||||||||||||||
operations | 0.17 | 1.06 | 2.03 | 0.41 | (0.75 | ) | 1.91 | 1.79 | 0.65 | 0.64 | (0.01 | ) | ||||||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||||||
Net investment | ||||||||||||||||||||||||||||||||||||||||
income | (0.37 | ) | (0.41 | ) | (0.23 | ) | — | (0.27 | ) | (0.15 | ) | (0.25 | ) | — | (0.00 | )4 | — | |||||||||||||||||||||||
Net realized gains | — | — | — | — | — | — | — | (0.05 | ) | — | — | |||||||||||||||||||||||||||||
Total distributions from | ||||||||||||||||||||||||||||||||||||||||
net investment income | ||||||||||||||||||||||||||||||||||||||||
and realized gains | (0.37 | ) | (0.41 | ) | (0.23 | ) | — | (0.27 | ) | (0.15 | ) | (0.25 | ) | (0.05 | ) | (0.00 | )4 | — | ||||||||||||||||||||||
Net asset value, end | ||||||||||||||||||||||||||||||||||||||||
of period | $ | 27.66 | $ | 27.86 | $ | 27.21 | $ | 25.41 | $ | 27.28 | $ | 28.30 | $ | 26.54 | $ | 26.23 | $ | 25.63 | $ | 24.99 | ||||||||||||||||||||
Total Return | ||||||||||||||||||||||||||||||||||||||||
Total investment return | ||||||||||||||||||||||||||||||||||||||||
based on net | ||||||||||||||||||||||||||||||||||||||||
asset value5 | 0.65 | % | 3.95 | % | 8.00 | % | 1.64 | % | (2.61 | )% | 7.21 | % | 7.16 | % | 2.56 | % | 2.58 | % | (0.04 | )% | ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of | ||||||||||||||||||||||||||||||||||||||||
period (000’s | ||||||||||||||||||||||||||||||||||||||||
omitted) | $ | 196,415 | $ | 131,077 | $ | 92,639 | $ | 11,536 | $ | 50,476 | $ | 28,302 | $ | 10,614 | $ | 27,543 | $ | 12,815 | $ | 13,744 | ||||||||||||||||||||
Ratio to average net | ||||||||||||||||||||||||||||||||||||||||
assets of: | ||||||||||||||||||||||||||||||||||||||||
Expenses | 0.75 | % | 0.77 | % | 0.77 | % | 0.13 | %6 | 0.75 | % | 0.77 | % | 0.76 | %7 | 0.48 | % | 0.49 | % | 0.50 | %7 | ||||||||||||||||||||
Net investment | ||||||||||||||||||||||||||||||||||||||||
income (loss) | 1.57 | % | 2.23 | % | 1.93 | % | 0.08 | %6 | 1.44 | % | 1.41 | % | 1.10 | %7 | (0.05 | )% | (0.32 | )% | (0.14 | )%7 | ||||||||||||||||||||
Portfolio turnover rate8 | 90 | % | 145 | % | 169 | % | 0 | %9 | 108 | % | 54 | % | 77 | % | 62 | % | 52 | % | 44 | % |
See footnotes on page 71.
See notes to financial statements.
68 |
Financial Highlights (continued) |
Selected Data for a Share of Capital Stock Outstanding |
IQ Global Resources ETF | IQ Merger Arbitrage ETF | IQ Australia Small Cap ETF | ||||||||||||||||||||||||||||||||||
For the Year Ended April 30, | For the Period October 26, 20091 to April 30, | For the Year Ended April 30, | For the Period November 16, 20091 to April 30, | For the Year Ended April 30, | For the Period March 22, 20101 to April 30, | |||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||||||||||||||||
Net asset value, beginning | ||||||||||||||||||||||||||||||||||||
of period | $ | 33.27 | $ | 27.50 | $ | 25.00 | $ | 25.47 | $ | 26.34 | $ | 25.00 | $ | 30.94 | $ | 25.64 | $ | 25.00 | ||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||
Net investment income (loss)2 | 0.39 | 0.29 | 0.12 | (0.03 | ) | 0.01 | 0.03 | 0.64 | 1.03 | 0.03 | ||||||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||||||||||||||
(loss) on investments | (4.17 | ) | 5.78 | 2.42 | 0.58 | (0.55 | ) | 1.31 | (5.71 | ) | 4.76 | 0.61 | ||||||||||||||||||||||||
Net increase (decrease) in | ||||||||||||||||||||||||||||||||||||
net assets resulting from | ||||||||||||||||||||||||||||||||||||
investment operations | (3.78 | ) | 6.07 | 2.54 | 0.55 | (0.54 | ) | 1.34 | (5.07 | ) | 5.79 | 0.64 | ||||||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.12 | ) | (0.04 | ) | — | (0.01 | ) | (0.00 | )4 | (1.77 | ) | (0.45 | ) | — | ||||||||||||||||||||
Net realized gains | (0.34 | ) | (0.18 | ) | — | — | (0.32 | ) | — | (0.85 | ) | (0.04 | ) | — | ||||||||||||||||||||||
Total distributions from net | ||||||||||||||||||||||||||||||||||||
investment income and | ||||||||||||||||||||||||||||||||||||
realized gains | (0.54 | ) | (0.30 | ) | (0.04 | ) | — | (0.33 | ) | (0.00 | )4 | (2.62 | ) | (0.49 | ) | — | ||||||||||||||||||||
Net asset value, end of period | $ | 28.95 | $ | 33.27 | $ | 27.50 | $ | 26.02 | $ | 25.47 | $ | 26.34 | $ | 23.25 | $ | 30.94 | $ | 25.64 | ||||||||||||||||||
Total Return | ||||||||||||||||||||||||||||||||||||
Total investment return based on | ||||||||||||||||||||||||||||||||||||
net asset value5 | (11.30 | )% | 22.17 | % | 10.18 | % | 2.16 | % | (2.03 | )% | 5.37 | % | (15.08 | )% | 22.71 | % | 2.56 | % | ||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||
Net assets, end of period | ||||||||||||||||||||||||||||||||||||
(000’s omitted) | $ | 68,039 | $ | 79,854 | $ | 8,249 | $ | 26,019 | $ | 22,921 | $ | 31,602 | $ | 16,277 | $ | 43,323 | $ | 8,973 | ||||||||||||||||||
Ratio to average net assets of: | ||||||||||||||||||||||||||||||||||||
Expenses | 0.75 | % | 0.76 | % | 0.79 | %7 | 0.75 | % | 0.76 | % | 0.77 | %7 | 0.69 | % | 0.69 | % | 0.71 | %7 | ||||||||||||||||||
Net investment income (loss) | 1.31 | % | 0.94 | % | 0.93 | %7 | (0.11 | )% | 0.04 | % | 0.22 | %7 | 2.49 | % | 3.72 | % | 1.09 | %7 | ||||||||||||||||||
Portfolio turnover rate8 | 178 | % | 117 | % | 158 | % | 365 | % | 365 | % | 141 | % | 42 | % | 49 | % | 0 | %9 |
See footnotes on page 71.
See notes to financial statements.
69 |
Financial Highlights (continued) |
Selected Data for a Share of Capital Stock Outstanding |
IQ Canada Small Cap ETF | IQ South Korea Small Cap ETF | |||||||||||||||||||||||
For the Year Ended April 30, | For the Period March 22, 20101 to April 30, | For the Year Ended April 30, | For the Period April 13, 20101 to April 30, | |||||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of period | $ | 35.44 | $ | 26.02 | $ | 25.00 | $ | 32.35 | $ | 25.50 | $ | 25.00 | ||||||||||||
Income from Investment Operations | ||||||||||||||||||||||||
Net investment income (loss)2 | 0.16 | 0.14 | (0.01 | ) | (0.01 | ) | 0.09 | (0.01 | ) | |||||||||||||||
Net realized and unrealized gain (loss) on | ||||||||||||||||||||||||
investments | (9.12 | ) | 9.75 | 1.03 | (7.36 | ) | 6.80 | 0.51 | ||||||||||||||||
Net increase (decrease) in net assets resulting | ||||||||||||||||||||||||
from investment operations | (8.96 | ) | 9.89 | 1.02 | (7.37 | ) | 6.89 | 0.50 | ||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | (0.31 | ) | (0.47 | ) | — | (0.11 | ) | (0.02 | ) | — | ||||||||||||||
Net realized gains | — | — | — | (0.41 | ) | (0.02 | ) | — | ||||||||||||||||
Total distributions from net investment income | ||||||||||||||||||||||||
and realized gains | (0.31 | ) | (0.47 | ) | — | (0.52 | ) | (0.04 | ) | — | ||||||||||||||
Net asset value, end of period | $ | 26.17 | $ | 35.44 | $ | 26.02 | $ | 24.46 | $ | 32.35 | $ | 25.50 | ||||||||||||
Total Return | ||||||||||||||||||||||||
Total investment return based on net asset value5 | (25.24 | )% | 38.15 | % | 4.08 | % | (22.87 | )% | 27.04 | % | 2.00 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 31,409 | $ | 120,492 | $ | 9,107 | $ | 7,338 | $ | 16,176 | $ | 2,550 | ||||||||||||
Ratio to average net assets of: | ||||||||||||||||||||||||
Expenses | 0.69 | % | 0.69 | % | 0.71 | %7 | 0.79 | % | 0.80 | % | 0.79 | %7 | ||||||||||||
Net investment income (loss) | 0.55 | % | 0.44 | % | (0.20 | )%7 | (0.05 | )% | 0.31 | % | (0.79 | )%7 | ||||||||||||
Portfolio turnover rate8 | 37 | % | 52 | % | 0 | % | 99 | % | 73 | % | 1 | % |
See footnotes on page 71.
See notes to financial statements.
70 |
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 US Real Estate Small Cap ETF | IQ Emerging Markets Mid Cap ETF | |||||||||||||||||
For the Year Ended April 30, 2012 | For the Period March 21, 20111 to April 30, 2011 | For the Period May 4, 20111 to April 30, 2012 | For the Period June 13, 20111 to April 30, 2012 | For the Period July 12, 20111 to April 30, 2012 | ||||||||||||||||
Net asset value, beginning of period | $ | 27.42 | $ | 25.40 | $ | 19.56 | $ | 19.91 | $ | 19.67 | ||||||||||
Income from Investment Operations | ||||||||||||||||||||
Net investment income2 | 0.22 | 0.06 | 0.21 | 0.73 | 0.21 | |||||||||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||||
on investments | (2.61 | ) | 1.96 | (2.07 | ) | 0.37 | (2.95 | ) | ||||||||||||
Net increase (decrease) in net assets resulting | ||||||||||||||||||||
from investment operations | (2.39 | ) | 2.02 | (1.86 | ) | 1.10 | (2.74 | ) | ||||||||||||
Distributions from: | ||||||||||||||||||||
Net investment income | (0.21 | ) | — | (0.12 | ) | (0.59 | ) | (0.23 | ) | |||||||||||
Net realized gains | — | — | — | — | — | |||||||||||||||
Total distributions from net investment income | ||||||||||||||||||||
and realized gains | (0.21 | ) | — | (0.12 | ) | (0.59 | ) | (0.23 | ) | |||||||||||
Net asset value, end of period | $ | 24.82 | $ | 27.42 | $ | 17.58 | $ | 20.42 | $ | 16.70 | ||||||||||
Total Return | ||||||||||||||||||||
Total investment return based on net | ||||||||||||||||||||
asset value5 | (8.64 | )% | 7.95 | % | (9.40 | )% | 6.05 | % | (13.74 | )% | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (000's omitted) | $ | 39,709 | $ | 54,839 | $ | 2,637 | $ | 32,669 | $ | 1,670 | ||||||||||
Ratio to average net assets of: | ||||||||||||||||||||
Expenses | 0.75 | % | 0.75 | %7 | 0.75 | %7 | 0.69 | %7 | 0.76 | %7 | ||||||||||
Net investment income (loss) | 0.89 | % | 1.96 | %7 | 1.22 | %7 | 4.43 | %7 | 1.54 | %7 | ||||||||||
Portfolio turnover rate8 | 26 | % | 0 | % | 10 | % | 11 | % | 72 | % |
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. Total returns may reflect adjustments to conform to generally accepted accounting principles. |
6 | Not annualized. |
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. |
9 | Portfolio turnover rate for the period was greater than 0% yet less than 0.5% |
See notes to financial statements.
71 |
Notes to Financial Statements |
April 30, 2012 |
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 twelve active funds (collectively, the “Funds” and each individually, a “Fund”): IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro 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 South Korea Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid 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 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 South Korea Small Cap ETF commenced operations on April 13, 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; IQ US Real Estate Small Cap ETF commenced operations on June 13, 2011 and IQ Emerging Markets Mid Cap ETF commenced operations on July 12, 2011.
IQ Hong Kong Small Cap ETF, IQ Japan Mid Cap ETF and IQ Taiwan Small Cap ETF were liquidated on December 29, 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 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 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.
72 |
Notes to Financial Statements (continued) |
April 30, 2012 |
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 South Korea Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ South Korea Small Cap Index, developed by IndexIQ. The objective of the IQ South Korea 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 South Korea.
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 US 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 US Real Estate Small Cap Index, developed by IndexIQ. The objective of the IQ US Real Estate Small Cap Index is to track the overall performance of the small capitalization U.S. real estate companies.
The investment objective of the IQ Emerging Markets Mid Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Emerging Markets Mid Cap Index, developed by IndexIQ. The objective of the IQ Emerging Markets Mid Cap Index is to track the overall performance of the mid capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in the emerging markets.
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
The Net Asset Value (“NAV”) of each Fund is determined as of the close of trading (generally, 4:00 PM Eastern Time) on each day the New York Stock Exchange Arca (“NYSE”) is open for trading. NAV per share is calculated by dividing a fund’s net assets by the number of fund shares outstanding. Securities, investment funds and futures traded on any recognized national or foreign stock exchange are valued at the last quoted sale price, or if no sale price is available, at the bid price. Securities not listed on a national or foreign stock exchange may be valued on the basis of prices furnished by approved pricing services or at the closing bid price on the over-the-counter market.
73 |
Notes to Financial Statements (continued) |
April 30, 2012 |
If market quotations are not readily available, or if it is determined that a quotation of a security does not represent fair value, then the security is valued at a fair value as determined in good faith using procedures adopted by the Trust’s Board of Trustees (the “Board”). Market prices may not represent fair value, for example, if a security is thinly traded or if an event occurs between the market quotation and the time the security is to be valued which is expected to affect the value of the security. The circumstances in which the Board may fair value a security include, among others: the occurrence of events that are significant to a particular issuer, such as mergers, restructurings or defaults; the occurrence of events that are significant to an entire market, such as natural disasters in a particular region or government actions; trading restrictions on securities; thinly traded securities; and market events such as trading halts and early market closings. Short-term securities with 60 days or less remaining to maturity are valued using the amortized cost method, which approximates current market value. Investments in open end regulated investment companies are valued at net asset value. Price information on ETFs is taken from the exchange where the security is primarily traded.
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 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.
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 Trustees, 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. There were no transfers between Level 1 and Level 2 during the year ended April 30, 2012. Level 3 transfers and the reasons for these transfers are detailed in the Level 3 reconciliation.
74 |
Notes to Financial Statements (continued) |
April 30, 2012 |
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, 2012 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* | $ | 164,110,652 | $ | — | $ | — | $ | 164,110,652 | ||||||||
Other Financial Instruments** | 193,227 | — | — | 193,227 | ||||||||||||
Short-Term Investments | 50,722,193 | — | — | 50,722,193 | ||||||||||||
Total | $ | 215,026,072 | $ | — | $ | — | $ | 215,026,072 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instruments** | (136,631 | ) | — | — | (136,631 | ) | ||||||||||
Total | $ | (136,631 | ) | $ | — | $ | — | $ | (136,631 | ) | ||||||
IQ Hedge Macro Tracker ETF | ||||||||||||||||
Assets | ||||||||||||||||
Investment Companies* | $ | 47,950,575 | $ | — | $ | — | $ | 47,950,575 | ||||||||
Other Financial Instruments** | 3,760 | — | — | 3,760 | ||||||||||||
Short-Term Investments | 8,958,945 | — | — | 8,958,945 | ||||||||||||
Total | $ | 56,913,280 | $ | — | $ | — | $ | 56,913,280 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instruments** | (13,366 | ) | — | — | (13,366 | ) | ||||||||||
Total | $ | (13,366 | ) | $ | — | $ | — | $ | (13,366 | ) | ||||||
IQ Real Return ETF | ||||||||||||||||
Assets | ||||||||||||||||
Investment Companies* | $ | 27,546,015 | $ | — | $ | — | $ | 27,546,015 | ||||||||
Short-Term Investments | 3,250,343 | — | — | 3,250,343 | ||||||||||||
Total | $ | 30,796,358 | $ | — | $ | — | $ | 30,796,358 | ||||||||
IQ Global Resources ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks† | $ | 60,701,625 | $ | — | $ | — | $ | 60,701,625 | ||||||||
Other Financial Instruments** | 108,495 | — | — | 108,495 | ||||||||||||
Short-Term Investments | 8,760,489 | — | — | 8,760,489 | ||||||||||||
Total | $ | 69,570,609 | $ | — | $ | — | $ | 69,570,609 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instruments** | (14,930 | ) | — | — | (14,930 | ) | ||||||||||
Total | $ | (14,930 | ) | $ | — | $ | — | $ | (14,930 | ) | ||||||
IQ Merger Arbitrage ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 20,660,022 | $ | — | $ | — | $ | 20,660,022 | ||||||||
Other Financial Instruments** | 22,889 | — | — | 22,889 | ||||||||||||
Short-Term Investments | 5,809,462 | — | — | 5,809,462 | ||||||||||||
Total | $ | 26,492,373 | $ | — | $ | — | $ | 26,492,373 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instruments** | (3,289 | ) | — | — | (3,289 | ) | ||||||||||
Total | $ | (3,289 | ) | $ | — | $ | — | $ | (3,289 | ) | ||||||
IQ Australia Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 16,281,506 | $ | — | $ | — | *** | $ | 16,281,506 | |||||||
Short-Term Investment | 1,498,535 | — | — | 1,498,535 | ||||||||||||
Total | $ | 17,780,041 | $ | — | $ | — | $ | 17,780,041 |
75 |
Notes to Financial Statements (continued) |
April 30, 2012 |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
IQ Canada Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 31,178,248 | $ | — | $ | — | $ | 31,178,248 | ||||||||
Short-Term Investment | 5,656,632 | — | — | 5,656,632 | ||||||||||||
Total | $ | 36,834,880 | $ | — | $ | — | $ | 36,834,880 | ||||||||
IQ South Korea Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 7,259,058 | $ | — | $ | — | $ | 7,259,058 | ||||||||
Rights* | — | 4,128 | — | 4,128 | ||||||||||||
Short-Term Investment | 527 | — | — | 527 | ||||||||||||
Total | $ | 7,259,585 | $ | 4,128 | $ | — | $ | 7,263,713 | ||||||||
IQ Global Agribusiness Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks† | $ | 39,480,700 | $ | — | $ | — | *** | $ | 39,480,700 | |||||||
Short-Term Investment | 1,071,961 | — | — | 1,071,961 | ||||||||||||
Total | $ | 40,552,661 | $ | — | $ | — | $ | 40,552,661 | ||||||||
IQ Global Oil Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks† | $ | 2,595,513 | $ | — | $ | — | $ | 2,595,513 | ||||||||
Warrant† | — | — | ‡ | — | — | |||||||||||
Short-Term Investment | 344,122 | — | — | 344,122 | ||||||||||||
Total | $ | 2,939,635 | $ | — | $ | — | $ | 2,939,635 | ||||||||
IQ US Real Estate Small Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks* | $ | 32,589,365 | $ | — | $ | — | $ | 32,589,365 | ||||||||
Short-Term Investments | 1,395,272 | — | — | 1,395,272 | ||||||||||||
Total | $ | 33,984,637 | $ | — | $ | — | $ | 33,984,637 | ||||||||
IQ Emerging Markets Mid Cap ETF | ||||||||||||||||
Assets | ||||||||||||||||
Common Stocks† | $ | 1,621,026 | $ | — | $ | — | $ | 1,621,026 | ||||||||
Right† | — | 666 | — | 666 | ||||||||||||
Other Financial Instruments** | — | 29 | — | 29 | ||||||||||||
Short-Term Investment | 8,360 | — | — | 8,360 | ||||||||||||
Total | $ | 1,629,386 | $ | 695 | $ | — | $ | 1,630,081 | ||||||||
Liabilities | ||||||||||||||||
Other Financial Instruments** | — | (44 | ) | — | (44 | ) | ||||||||||
Total | $ | — | $ | (44 | ) | $ | — | $ | (44 | ) |
* | Please refer to the Schedule of Investments to view securities segregated by industry type. |
** | Derivative instruments, including swap transactions and futures contracts, are recorded at the net unrealized appreciation (depreciation) on the instrument. |
*** | Includes Level 3 security valued at $0. |
† | Please refer to the Schedule of Investments to view securities segregated by country. |
‡ | Includes Level 2 security valued at $0. |
76 |
Notes to Financial Statements (continued) |
April 30, 2012 |
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value. All transfers in or out of Level 3 are done using the beginning of period method.
IQ Global Agribusiness Small Cap ETF | Common Stock | |||
Balance as of April 30, 2011 | $ | — | ||
Transfer into Level 3(a) | 1,790,699 | |||
Purchases | 90,965 | |||
Sales | (453,559 | ) | ||
Realized gain (loss) | (872,098 | ) | ||
Change in unrealized depreciation | (556,007 | ) | ||
Balance as of April 30, 2012 | $ | — | ||
Net change in unrealized appreciation/depreciation from investments | ||||
still held as of April 30, 2012 was: | $ | (549,087 | ) |
(a) | Transfers into Level 3 are the results of the unavailability of a quoted price in a active market or the unavailability of other significant observable inputs. |
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. Net investment income and net capital gains, if any, are typically distributed to shareholders 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. 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 commencement of operations through April 30, 2012 are open for examination.
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments, with maturities of three months or less when acquired.
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 the 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.
77 |
Notes to Financial Statements (continued) |
April 30, 2012 |
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. The 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, 2012 are shown in the Schedules of Investments and Statements of Assets and Liabilities.
Investment Income and Expenses
Dividend income is recognized on the ex-dividend date. Interest income is accrued daily. The Funds’ investment income, expenses and unrealized and realized gains and losses are allocated daily. The Funds distribute substantially all of their net investment income to shareholders in the form of dividends. Distributions of realized capital gains by underlying funds are recorded as realized capital gains on the ex-date.
Recent Accounting Pronouncements
In May 2011, the International Accounting Standards Board (“FASB”) and the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. Management is currently evaluating the implications of ASU 2011-04 and its impact on the Funds’ financial statements.
78 |
Notes to Financial Statements (continued) |
April 30, 2012 |
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 of 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 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 South Korea Small Cap ETF | 0.79% | |
IQ Global Agribusiness Small Cap ETF | 0.75% | |
IQ Global Oil Small Cap ETF | 0.75% | |
IQ US Real Estate Small Cap ETF | 0.69% | |
IQ Emerging Markets Mid Cap ETF | 0.75% |
Such fee is accrued daily and paid monthly. On May 19, 2011, the sub-advisory agreement between the Advisor and Esposito Partners, LLC (“Esposito”), pursuant to which Esposito acted as sub-advisor to the IQ Merger Arbitrage ETF, was terminated, and the Advisor assumed day-to-day portfolio management responsibility for the Fund.
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 of Trustees of the Trust, 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, 2012, 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
79 |
Notes to Financial Statements (continued) |
April 30, 2012 |
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 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, 2012, the cost of investments on a tax basis was as follows:
Fund | Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 212,327,992 | $ | 2,595,006 | $ | 90,153 | $ | 2,504,853 | ||||||||
IQ Hedge Macro Tracker ETF | 56,177,873 | 757,873 | 26,226 | 731,647 | ||||||||||||
IQ Real Return ETF | 30,694,739 | 161,110 | 59,491 | 101,619 | ||||||||||||
IQ Global Resources ETF | 71,202,745 | 1,237,053 | 2,977,684 | (1,740,631 | ) | |||||||||||
IQ Merger Arbitrage ETF | 25,708,243 | 875,368 | 114,127 | 761,241 | ||||||||||||
IQ Australia Small Cap ETF | 20,107,702 | 968,319 | 3,295,979 | (2,327,660 | ) | |||||||||||
IQ Canada Small Cap ETF | 45,563,816 | 1,021,447 | 9,750,383 | (8,728,936 | ) | |||||||||||
IQ South Korea Small Cap ETF | 7,830,684 | 697,816 | 1,264,787 | (566,971 | ) | |||||||||||
IQ Global Agribusiness Small Cap ETF | 44,193,683 | 1,625,487 | 5,266,508 | (3,641,021 | ) | |||||||||||
IQ Global Oil Small Cap ETF | 3,342,190 | 77,377 | 479,932 | (402,555 | ) | |||||||||||
IQ US Real Estate Small Cap ETF | 32,191,119 | 2,265,911 | 472,393 | 1,793,518 | ||||||||||||
IQ Emerging Markets Mid Cap ETF | 1,851,236 | 47,392 | 268,576 | (221,184 | ) |
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, 2012.
At April 30, 2012, the components of earnings/loss on a tax-basis were as follows:
Fund | Undistributed Net Investment Income | Undistributed Capital and Other Losses | Net Unrealized Appreciation/ (Depreciation) | Total Earnings/ (Losses) | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 509,353 | $ | (15,307,015 | ) | $ | 2,504,853 | $ | (12,292,809 | ) | ||||||
IQ Hedge Macro Tracker ETF | 126,609 | (2,082,246 | ) | 731,647 | (1,223,990 | ) | ||||||||||
IQ Real Return ETF | (11,260 | ) | (99,001 | ) | 101,619 | (8,642 | ) | |||||||||
IQ Global Resources ETF | 507,665 | (11,423,174 | ) | (1,738,280 | ) | (12,653,789 | ) | |||||||||
IQ Merger Arbitrage ETF | 24,413 | (1,628,637 | ) | 761,516 | (842,708 | ) | ||||||||||
IQ Australia Small Cap ETF | 254,721 | (2,974,341 | ) | (2,327,629 | ) | (5,047,249 | ) | |||||||||
IQ Canada Small Cap ETF | 237,082 | (7,369,122 | ) | (8,720,332 | ) | (15,852,372 | ) | |||||||||
IQ South Korea Small Cap ETF | — | (2,054,570 | ) | (566,563 | ) | (2,621,133 | ) | |||||||||
IQ Global Agribusiness Small Cap ETF | 134,721 | (2,516,990 | ) | (3,636,919 | ) | (6,019,188 | ) | |||||||||
IQ Global Oil Small Cap ETF | 10,760 | (80,835 | ) | (402,342 | ) | (472,417 | ) | |||||||||
IQ US Real Estate Small Cap ETF | 154,244 | (208,167 | ) | 1,793,518 | 1,739,595 | |||||||||||
IQ Emerging Markets Mid Cap ETF | 75,558 | (462,101 | ) | (222,053 | ) | (608,596 | ) |
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.
80 |
Notes to Financial Statements (continued)
April 30, 2012
At April 30, 2012, the effect of permanent book/tax reclassifications resulted in increases(decreases) to the components of net assets 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 | $ | (133,378 | ) | $ | (6,453,193 | ) | $ | 6,586,571 | ||||
IQ Hedge Macro Tracker ETF | (11,559 | ) | (848,397 | ) | 859,956 | |||||||
IQ Real Return ETF | 4,783 | (604,937 | ) | 600,154 | ||||||||
IQ Global Resources ETF | (141,234 | ) | (6,158,240 | ) | 6,299,474 | |||||||
IQ Merger Arbitrage ETF | (51,073 | ) | (196,265 | ) | 247,338 | |||||||
IQ Australia Small Cap ETF | 319,319 | (186,274 | ) | (133,045 | ) | |||||||
IQ Canada Small Cap ETF | 276,710 | 3,009,351 | (3,286,061 | ) | ||||||||
IQ South Korea Small Cap ETF | 39,233 | 25,423 | (64,656 | ) | ||||||||
IQ Global Agribusiness Small Cap ETF | (44,468 | ) | (1,380,553 | ) | 1,425,021 | |||||||
IQ Global Oil Small Cap ETF | (904 | ) | (150,908 | ) | 151,812 | |||||||
IQ US Real Estate Small Cap ETF | 0 | (791,598 | ) | 791,598 | ||||||||
IQ Emerging Markets Mid Cap ETF | 67,178 | 59,391 | (126,569 | ) |
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 net operating losses, distribution reclassifications and foreign currency reclassifications.
The tax character of distributions paid during the years ended April 30, 2012 and 2011 were as follows:
2012 | 2011 | |||||||||||||||
Fund | Ordinary Income | Long-Term Capital Gains | Ordinary Income | Long-Term Capital Gains | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 2,465,773 | $ | — | $ | 1,865,556 | $ | — | ||||||||
IQ Hedge Macro Tracker ETF | 349,947 | — | 133,209 | — | ||||||||||||
IQ Real Return ETF | — | 70,733 | 1,985 | — | ||||||||||||
IQ Global Resources ETF | 1,183,908 | — | 414,505 | — | ||||||||||||
IQ Merger Arbitrage ETF | — | — | 312,056 | — | ||||||||||||
IQ Australia Small Cap ETF | 1,908,146 | 54,281 | 438,192 | — | ||||||||||||
IQ Canada Small Cap ETF | 400,361 | — | 468,240 | — | ||||||||||||
IQ South Korea Small Cap ETF | 180,575 | — | 9,440 | — | ||||||||||||
IQ Global Agribusiness Small Cap ETF | 331,760 | — | — | — | ||||||||||||
IQ Global Oil Small Cap ETF | 12,378 | — | — | — | ||||||||||||
IQ US Real Estate Small Cap ETF | 328,571 | — | — | — | ||||||||||||
IQ Emerging Markets Mid Cap ETF | 23,390 | — | — | — |
81 |
Notes to Financial Statements (continued) |
April 30, 2012 |
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, 2012, the Funds incurred and elected to defer to May 1, 2012 post-October losses and late year ordinary losses of:
Fund | Late Year Ordinary Losses | Post-October Capital Losses | ||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | — | $ | 4,376,700 | ||||
IQ Hedge Macro Tracker ETF | — | 1,070,921 | ||||||
IQ Real Return ETF | 11,260 | 20,641 | ||||||
IQ Global Resources ETF | — | 3,368,295 | ||||||
IQ Merger Arbitrage ETF | — | 157,684 | ||||||
IQ Australia Small Cap ETF | — | 1,510,262 | ||||||
IQ Canada Small Cap ETF | — | 1,441,889 | ||||||
IQ South Korea Small Cap ETF | — | 419,230 | ||||||
IQ Global Agribusiness Small Cap ETF | — | 744,384 | ||||||
IQ Global Oil Small Cap ETF | — | 40,965 | ||||||
IQ US Real Estate Small Cap ETF | — | 190,225 | ||||||
IQ Emerging Markets Mid Cap ETF | — | 275,249 |
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, 2012, 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, 2012, there were no capital loss carryforwards utilized or expired. These loss carryforwards expire in amounts and fiscal years as follows:
Fund | April 30, 2018 | April 30, 2019 | Short-Term Post-Effective No Expiration | Long-Term Post-Effective No Expiration | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 841,667 | $ | 5,603,304 | $ | 4,169,832 | $ | 315,512 | ||||||||
IQ Hedge Macro Tracker ETF | 80,017 | 531,209 | 400,099 | — | ||||||||||||
IQ Real Return ETF | — | — | 78,360 | — | ||||||||||||
IQ Global Resources ETF | — | — | 8,054,879 | — | ||||||||||||
IQ Merger Arbitrage ETF | — | 971,183 | 355,189 | 144,581 | ||||||||||||
IQ Australia Small Cap ETF | — | — | 1,089,836 | 374,243 | ||||||||||||
IQ Canada Small Cap ETF | — | 161,421 | 5,765,812 | — | ||||||||||||
IQ South Korea Small Cap ETF | — | — | 1,635,340 | — | ||||||||||||
IQ Global Agribusiness Small Cap ETF | — | — | 1,772,606 | — | ||||||||||||
IQ Global Oil Small Cap ETF | — | — | 39,870 | — | ||||||||||||
IQ US Real Estate Small Cap ETF | — | — | 17,942 | — | ||||||||||||
IQ Emerging Markets Mid Cap ETF | — | — | 186,852 | — |
82 |
Notes to Financial Statements (continued) |
April 30, 2012 |
7. INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding short-term investments) for the period ended April 30, 2012 are as follows:
Fund | Purchases | Sales | Purchases In-Kind | Sales In-Kind | ||||||||||||
IQ Hedge Multi-Strategy Tracker ETF | $ | 122,300,647 | $ | 139,867,718 | $ | 172,704,308 | $ | 105,531,663 | ||||||||
IQ Hedge Macro Tracker ETF | 39,087,133 | 34,822,284 | 33,378,780 | 15,770,340 | ||||||||||||
IQ Real Return ETF | 12,455,692 | 12,572,493 | 36,356,603 | 22,017,426 | ||||||||||||
IQ Global Resources ETF | 113,971,878 | 111,480,668 | 71,199,486 | 74,674,566 | ||||||||||||
IQ Merger Arbitrage ETF | 71,254,826 | 67,376,423 | 6,707,528 | 8,746,063 | ||||||||||||
IQ Australia Small Cap ETF | 10,327,746 | 10,041,712 | 2,437,052 | 21,609,897 | ||||||||||||
IQ Canada Small Cap ETF | 23,019,030 | 19,651,292 | 1,623,973 | 70,873,396 | ||||||||||||
IQ South Korea Small Cap ETF | 11,733,072 | 16,019,323 | — | — | ||||||||||||
IQ Global Agribusiness Small Cap ETF | 23,358,402 | 11,532,996 | 3,936,652 | 24,627,147 | ||||||||||||
IQ Global Oil Small Cap ETF | 593,678 | 194,641 | 4,714,203 | 2,186,491 | ||||||||||||
IQ US Real Estate Small Cap ETF | 3,534,780 | 1,630,328 | 39,177,738 | 10,666,045 | ||||||||||||
IQ Emerging Markets Mid Cap ETF | 2,965,311 | 1,594,316 | 1,596,249 | 658,437 |
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 period, the IQ Merger Arbitrage ETF and IQ Global Resources ETF utilized futures contracts to effect short exposure to U.S. and international equity returns, while the IQ Hedge Multi-Strategy ETF and IQ Hedge Macro Tracker ETF utilized futures to effect short exposure to U.S. small cap equity returns, international developed and emerging markets equity returns, international currency returns and commodity returns.
The open futures contracts at April 30, 2012 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 swaps. 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 approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate.
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Notes to Financial Statements (continued) |
April 30, 2012 |
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 declines 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. During the period, the IQ Hedge Multi-Strategy Tracker ETF and IQ Emerging Markets Mid Cap ETF utilized swaps to effect short exposure to the real estate asset class, and the IQ Hedge Multi-Strategy Tracker ETF utilized swaps to effect long exposure to the convertible bond asset class and mid-term volatility asset class and the IQ Hedge Macro Tracker ETF utilized swaps to effect long exposure to the mid-term volatility asset class, which was consistent with the exposure of both Funds’ underlying indexes. At April 30, 2012, the IQ Hedge Multi-Strategy Tracker ETF posted $5,700,515 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, 2012, 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, 2012, the fair values of derivative instruments reflected on the Statements of Assets and Liabilities were as follows:
Asset Derivatives | ||||||||
Equity Risk | Total | |||||||
IQ Hedge Multi-Strategy Tracker ETF | ||||||||
Unrealized appreciation on futures contracts1 | $ | 193,227 | $ | 193,227 | ||||
IQ Hedge Macro Tracker ETF | ||||||||
Unrealized appreciation on futures contracts1 | 3,760 | 3,760 | ||||||
IQ Global Resources ETF | ||||||||
Unrealized appreciation on futures contracts1 | 108,495 | 108,495 | ||||||
IQ Merger Arbitrage ETF | ||||||||
Unrealized appreciation on futures contracts1 | 22,889 | 22,889 | ||||||
IQ Emerging Markets Mid Cap ETF | ||||||||
Unrealized appreciation on swap transactions | 29 | 29 | ||||||
Liability Derivatives | ||||||||
Equity Risk | Total | |||||||
IQ Hedge Multi-Strategy Tracker ETF | ||||||||
Unrealized depreciation on futures contracts1 | $ | 136,631 | $ | 136,631 | ||||
IQ Hedge Macro Tracker ETF | ||||||||
Unrealized depreciation on futures contracts1 | 13,366 | 13,366 | ||||||
IQ Global Resources ETF | ||||||||
Unrealized depreciation on futures contracts1 | 14,930 | 14,930 | ||||||
IQ Merger Arbitrage ETF | ||||||||
Unrealized depreciation on futures contracts1 | 3,289 | 3,289 | ||||||
IQ Emerging Markets Mid Cap ETF | ||||||||
Unrealized depreciation on swap transactions | 44 | 44 |
1 | Includes cumulative appreciation (depreciation) of futures contracts as reported in the Schedules of Investments. Only unsettled variation margin is reported within the Statements of Assets and Liabilities. |
84 |
Notes to Financial Statements (continued) |
April 30, 2012 |
Transactions in derivative instruments reflected on the Statements of Operations during the year ended April 30, 2012, were as follows:
Equity Risk | Total | |||||||
IQ Hedge Multi-Strategy Tracker ETF | ||||||||
Realized loss | ||||||||
Futures contracts | $ | (1,882,294 | ) | $ | (1,882,294 | ) | ||
Swap transactions | (1,366,601 | ) | (1,366,601 | ) | ||||
Total realized loss | $ | (3,248,895 | ) | $ | (3,248,895 | ) | ||
Change in Unrealized appreciation (depreciation) | ||||||||
Futures contracts | $ | 230,639 | $ | 230,639 | ||||
IQ Hedge Macro Tracker ETF | ||||||||
Realized loss | ||||||||
Futures contracts | $ | (15,530 | ) | $ | (15,530 | ) | ||
Swap transactions | (23,794 | ) | (23,794 | ) | ||||
Total realized loss | $ | (39,324 | ) | $ | (39,324 | ) | ||
Change in Unrealized appreciation (depreciation) | ||||||||
Futures contracts | $ | 58,791 | $ | 58,791 | ||||
IQ Global Resources ETF | ||||||||
Realized loss | ||||||||
Futures contracts | $ | (175,358 | ) | $ | (175,358 | ) | ||
Change in Unrealized appreciation (depreciation) | ||||||||
Futures contracts | $ | 925,613 | $ | 925,613 | ||||
IQ Merger Arbitrage ETF | ||||||||
Realized loss | ||||||||
Futures contracts | $ | (105,112 | ) | $ | (105,112 | ) | ||
Change in Unrealized appreciation (depreciation) | ||||||||
Futures contracts | $ | 328,605 | $ | 328,605 | ||||
IQ Emerging Markets Mid Cap ETF | ||||||||
Realized loss | ||||||||
Swap transactions | $ | (47,076 | ) | $ | (47,076 | ) | ||
Change in Unrealized depreciation (depreciation) | ||||||||
Swap transactions | $ | (15 | ) | $ | (15 | ) |
For the year ended April 30, 2012, the monthly average volume of the derivatives held by the Funds were as follows:
Fund | Number of Futures Contracts | Market Value of Futures Contracts | ||||||
IQ Hedge Multi-Strategy Tracker ETF | (199 | ) | $ | (12,004,771 | ) | |||
IQ Hedge Macro Tracker ETF | (26 | ) | (2,045,867 | ) | ||||
IQ Global Resources ETF | (197 | ) | (13,928,185 | ) | ||||
IQ Merger Arbitrage ETF | (47 | ) | (3,341,646 | ) |
Fund | Notional Amount of Swap Contracts | |||
IQ Hedge Multi-Strategy Tracker ETF | $ | 2,017,291 | ||
IQ Hedge Macro Tracker ETF | 1,436,169 | 1 | ||
IQ Emerging Markets Mid Cap ETF | 71,764 |
1 | IQ Hedge Macro Tracker ETF utilized swaps during the last month of the fiscal year only. |
85 |
Notes to Financial Statements (continued) |
April 30, 2012 |
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 underlying Indexes have limited historical performance data that is not predictive of future results. In addition, the 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.
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.
New Fund Risk***
Certain of the Funds are new funds. As new funds, there can be no assurance that the Funds will grow to or maintain an economically viable size, in which case the Funds may experience greater tracking error to their Underlying Indexes than they otherwise would be at higher asset levels or they could ultimately liquidate.
* | Applies to IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF and IQ Real Return ETF. |
** | Applies to IQ Australia Small Cap ETF, IQ Canada Small Cap ETF, IQ South Korea Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF and IQ US Real Estate Small Cap ETF. |
*** | Applies to IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid Cap ETF. |
10. SUBSEQUENT EVENTS
The Funds have evaluated subsequent events through the date of issuance of this report and have determined that there are no other material events that would require disclosure.
86 |
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 (comprising, respectively, IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro 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 South Korea Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid Cap ETF) (collectively, the “Funds”) as of April 30, 2012, 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 Funds’ 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 audit 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 Funds’ 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 Funds’ 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, 2012, 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, 2012, 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 28, 2012
87 |
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, 2012 taxed at a maximum rate of 15% is as follows:
IQ Hedge Multi-Strategy Tracker ETF | 33.58% | |
IQ Hedge Macro Tracker ETF | 31.94% | |
IQ Real Return ETF | 0.00% | |
IQ Global Resources ETF | 45.45% | |
IQ Merger Arbitrage ETF | 0.00% | |
IQ Australia Small Cap ETF | 29.63% | |
IQ Canada Small Cap ETF | 47.95% | |
IQ South Korea Small Cap ETF | 28.27% | |
IQ Global Agribusiness Small Cap Equity ETF | 81.38% | |
IQ Global Oil Small Cap ETF | 100.00% | |
IQ US Real Estate Small Cap ETF | 0.00% | |
IQ Emerging Markets Mid Cap ETF | 16.68% |
Dividends Received Deduction — For corporate shareholders, the percentage of ordinary income distributions for the year ended April 30, 2012 that qualifies for the dividends received deduction is as follows:
IQ Hedge Multi-Strategy Tracker ETF | 25.93% | |
IQ Hedge Macro Tracker ETF | 0.00% | |
IQ Real Return ETF | 0.00% | |
IQ Global Resources ETF | 20.51% | |
IQ Merger Arbitrage ETF | 0.00% | |
IQ Australia Small Cap ETF | 0.00% | |
IQ Canada Small Cap ETF | 0.00% | |
IQ South Korea Small Cap ETF | 0.00% | |
IQ Global Agribusiness Small Cap Equity ETF | 16.99% | |
IQ Global Oil Small Cap ETF | 44.27% | |
IQ US Real Estate Small Cap ETF | 0.00% | |
IQ Emerging Markets Mid Cap ETF | 0.00% |
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, 2012, are as follows:
Foreign Taxes | Income | |||||||
Per Share | Per Share | |||||||
IQ Hedge Multi-Strategy Tracker ETF | — | — | ||||||
IQ Hedge Macro Tracker ETF | — | — | ||||||
IQ Real Return ETF | — | — | ||||||
IQ Global Resources ETF | 0.0372 | 0.4501 | ||||||
IQ Merger Arbitrage ETF | — | — | ||||||
IQ Australia Small Cap ETF | 0.0132 | 1.0691 | ||||||
IQ Canada Small Cap ETF | 0.0913 | 0.6088 | ||||||
IQ South Korea Small Cap ETF | 0.0594 | 0.3588 | ||||||
IQ Global Agribusiness Small Cap Equity ETF | 0.0388 | 0.4252 | ||||||
IQ Global Oil Small Cap ETF | 0.0271 | 0.1937 | ||||||
IQ US Real Estate Small Cap ETF | — | — | ||||||
IQ Emerging Markets Mid Cap ETF | 0.0848 | 0.4948 |
In January 2013, you will be advised on IRS Form 1099 DIV as to the Federal tax status of the distributions received by you in calendar year 2012.
88 |
Board Review of Investment Advisory Agreement (unaudited) |
At the March 13, 2012 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, 2012 until February 2, 2013. 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 Operating 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 ETFs 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 Fund grows 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. |
89 |
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 average of 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.
90 |
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 | Deputy Dean, McDonough School of Business, Georgetown University (2006 to 2008); Visiting Professor of Finance, Sloan School of Management, MIT (2005 to 2006); Interim Dean, McDonough School of Business, Georgetown University (2004 to 2005); Stallkamp Faculty Fellow and Professor of Finance, McDonough School of Business, Georgetown University (2003 to present). | 21 | FBR Funds (2006-2011) | |||||
Gene Chao 1970 | Trustee | Since August 2008 | Vice President, Global Industries Strategy & Solutions, Juniper Networks (2011 to present); Vice President and GM, Global Network, Hewlett-Packard (2010 to 2011); Vice President, Strategic Services, Dimension Data, Americas (2007 to 2010); Senior Vice President, Strategic Outsourcing, France Telecom Americas (2004 to 2007). | 21 | None | |||||
Interested Trustees5 | ||||||||||
Adam S. Patti 1970 | Chairman and Trustee | Since November 2008 | Chairman, Trustee, President and Principal Executive, IndexIQ Trust (2008 to present); Chief Executive Officer, the Advisor (2007 to present); | 21 | None | |||||
President and Principal Executive Officer | Since July 2008 | Chief Executive Officer, IndexIQ. (2006 to present); Associate Publisher, Time Inc. (2006). |
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); Chief Operating Officer, IndexIQ (2006 to present); Director, Time Inc. (2004 to 2006). | |||
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); | |||
Executive Vice President | Since June 2011 | Executive Vice President, IndexIQ (2006 to present); Vice President, Groton Partners LLC (2005 to 2006). |
1 | The address of each Trustee or Officer is c/o IndexIQ, 800 Westchester Avenue, Suite N-611, 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. |
91 |
ANNUAL REPORT | APRIL 30, 2012
IndexIQ ETF Trust
IQ Hedge Multi-Strategy Tracker ETF
IQ Hedge Macro 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 South Korea Small Cap ETF
IQ Global Agribusiness Small Cap ETF
IQ Global Oil Small Cap ETF
IQ US Real Estate Small Cap ETF
IQ Emerging Markets Mid 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 has adopted a code of ethics that applies to the Registrant’s Principal Executive Officer, Principal Financial Officer or persons performing similar functions.
b). There have not been any changes to the Code of Ethics.
c). Not Applicable
d). During the period, Registrant granted no waivers from the provisions of its code of ethics that applies to the Registrant's Principal Executive Officer, Principal Financial Officer or persons performing similar functions.
e). Not Applicable
f). Attached
Item 3. Audit Committee Financial Expert.
a). 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.
a). Audit Fees: the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the audit are as follows:
2012: $185,000
2011: $165,000
b). Audit-Related Fees: the aggregate fees billed in each of the previous last two fiscal years for assurance and related services by the principal accountant that are principally related to the
Registrant’s tax return reviews and are not reported under paragraph (a) of this item are as follows:
2012: $0
2011: $0
c). Tax Fees, the aggregate fees billed in each of the previous last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are as follows:
2012: $53,200
2011: $47,600
d). All Other Fees, 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) and (c) of this Item are as follows:
2012: $0
2011: $0
e) Audit Committee Pre-Approval Policies and Procedures.
(i) 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.
(ii) 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 Funds, the Advisor or any entity controlling, controlled by, or under common control with the Advisor that provides ongoing services to the Registrant (except for any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor) that directly impacted the Funds for the period ended April 30, 2012 were as follows:
2012: $53,200
2011: $47,600
(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. Schedule of Investments.
(a) Schedule 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 & Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) | The Principal Executive Officer and Principal Financial Officer have evaluated the Registrant's disclosure controls and procedures within 90 days of the filing date of this report and have concluded that these controls and procedures are effective. |
(b) | There were no significant changes in the Registrant's internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation. |
Item 12. Exhibits.
(a) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the Registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Attached
(b) Separate certifications for each Principal Executive Officer and Principal Financial Officer of the Registrant as required by Rule 30a-2(a) under the 1940 Act (17CFR 270.30a-(a)).
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: /s/ Adam S. Patti
Adam S. Patti, Principal Executive Officer
Date: July 6, 2012
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.
Registrant: IndexIQ ETF Trust
By: /s/ Adam S. Patti
Adam S. Patti, Principal Executive Officer
Date: July 6, 2012
By: /s/ David L. Fogel
David L. Fogel, Principal Financial Officer
Date: July 6, 2012