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 811-22739
IndexIQ Active ETF Trust
(Exact name of registrant as specified in charter)
800 Westchester Ave., Suite S-710
Rye Brook, NY 10573
(Address of principal executive offices) (Zip code)
Adam S. Patti
IndexIQ Advisors LLC
800 Westchester Ave., Suite S-710
Rye Brook, NY 10573
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-888-474-7725
Date of fiscal year end: April 30
Date of reporting period: October 31, 2017
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.
The Report to Shareholders is attached herewith.
IQ MacKay Shields Municipal Intermediate ETF (MMIT)
• | Receive email notifications when your most recent shareholder communications are available for review. |
• | Access prospectuses, annual reports and semi-annual reports online. |
1. | Visit https://www.icsdelivery.com/live/ |
2. | Follow the simple enrollment instructions |
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Schedules of Investments | ||||||
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• | IQ MacKay Shields Municipal Insured ETF (MMIN) seeks to provide current income exempt from federal income taxes by investing primarily in insured municipal bonds. MMIN provides targeted exposure to insured municipal bonds, an increasingly important segment of the market following financial difficulties for select issuers over the last several years. MMIN invests primarily in investment grade credits, seeking to outperform the Bloomberg Barclays Municipal Insured Bond Index over time. |
• | IQ MacKay Shields Municipal Intermediate ETF (MMIT) seeks to provide current income exempt from federal income taxes by investing primarily in investment grade municipal bonds. MMIT can help investors access key benefits of the ETF structure while still accounting for the unique characteristics of the municipal market that results from its fragmented and illiquid nature. MMIT focuses on opportunities in the intermediate segment of the municipal yield curve, seeking to outperform the Bloomberg Barclays Municipal Bond 1-15 Year Index over time. |
Chief Executive Officer
Registered Representative of NYLIFE Distributors LLC.
Beginning Account Value 10/18/2017 | Ending Account Value 10/31/17 | Annualized Expense Ratios for the Period 10/18/17 to 10/31/17 | Expenses Paid for Period 10/18/17 to 10/31/17 | |||||||||||||||
IQ MacKay Shields Municipal Insured ETF | ||||||||||||||||||
Actual1 | $ | 1,000.00 | $ | 999.60 | 0.30 | % | $0.12 | |||||||||||
Hypothetical (assuming a 5% return before expenses)2 | $ | 1,000.00 | $ | 1,023.69 | 0.30 | % | $1.53 | |||||||||||
IQ MacKay Shields Municipal Intermediate ETF | ||||||||||||||||||
Actual1 | $ | 1,000.00 | $ | 999.20 | 0.30 | % | $0.12 | |||||||||||
Hypothetical (assuming a 5% return before expenses)2 | $ | 1,000.00 | $ | 1,023.69 | 0.30 | % | $1.53 |
1 | Funds commenced operations on October 18, 2017. Expenses are calculated using the Fund’s annualized expense ratio multiplied by the ending value for the period, multiplied by 14/365 (to reflect commencement of operations). |
2 | Hypothetical expense reflect a beginning account value as of May 1, 2017. Expenses are calculated using the Funds annualized expense ratio, multiplied by the average account value multiplied by 184/365. |
IQ MacKay Shields Municipal Insured ETF
Net Assets ($mil): $14.9
% of Net Assets | ||||||
Money Market Fund* | 29.9 | % | ||||
Illinois | 10.7 | |||||
Colorado | 10.1 | |||||
Pennsylvania | 9.8 | |||||
Connecticut | 7.8 | |||||
California | 7.7 | |||||
New York | 6.6 | |||||
Texas | 6.6 | |||||
Kentucky | 6.1 | |||||
Missouri | 3.8 | |||||
New Jersey | 3.4 | |||||
Georgia | 3.3 | |||||
Ohio | 3.3 | |||||
Tennessee | 3.3 | |||||
Washington | 3.3 | |||||
Minnesota | 3.0 | |||||
Total Investments | 118.7 | |||||
Other Assets and Liabilities, Net | (18.7 | ) | ||||
Net Assets | 100.0 | % |
IQ MacKay Shields Municipal Intermediate ETF
Net Assets ($mil): $29.9
% of Net Assets | ||||||
Money Market Fund* | 42.1 | % | ||||
Illinois | 8.9 | |||||
New York | 7.2 | |||||
Florida | 7.1 | |||||
Texas | 6.8 | |||||
Pennsylvania | 4.1 | |||||
Connecticut | 3.8 | |||||
Kentucky | 3.7 | |||||
Iowa | 3.4 | |||||
Missouri | 3.4 | |||||
Ohio | 3.4 | |||||
Georgia | 3.3 | |||||
California | 2.6 | |||||
Delaware | 1.7 | |||||
Minnesota | 1.7 | |||||
Montana | 1.7 | |||||
Nebraska | 1.7 | |||||
Tennessee | 1.7 | |||||
Washington | 1.7 | |||||
Total Investments | 110.0 | |||||
Other Assets and Liabilities, Net | (10.0 | ) | ||||
Net Assets | 100.0 | % |
* | The Fund commenced operations on October 18, 2017. As of October 31, 2017, the Fund was still in its initial invest-up period and cash not yet invested in municipal bonds was held in the money market fund. |
Principal Amount | Value | |||||||
Municipal Bonds — 88.8% | ||||||||
California — 7.7% | ||||||||
California Statewide Communities Development Authority, Revenue Bonds Series W-2 0.900%, due 9/15/29(a) | $ | 500,000 | $ | 500,000 | ||||
West Sacramento Financing Authority, Revenue Bonds Insured: BAM 4.000%, due 10/1/40 | 620,000 | 657,460 | ||||||
1,157,460 | ||||||||
Colorado — 10.1% | ||||||||
BNC Metropolitan District No 1, General Obligation Bonds Series A Insured: BAM 5.000%, due 12/1/37 | 545,000 | 620,880 | ||||||
Rampart Range Metropolitan District No 1, Revenue Bonds Insured: AGM 5.000%, due 12/1/42 | 770,000 | 882,166 | ||||||
1,503,046 | ||||||||
Connecticut — 7.8% | ||||||||
City of Hartford CT, General Obligation Bonds Series A Insured: AGM 5.000%, due 7/1/28 | 560,000 | 615,222 | ||||||
City of New Haven CT, General Obligation Bonds Series B Insured: BAM-TCRS 5.000%, due 8/1/25 | 475,000 | 554,506 | ||||||
1,169,728 | ||||||||
Georgia — 3.3% | ||||||||
Burke County Development Authority, Revenue Bonds 0.950%, due 11/1/52(a) | 500,000 | 500,000 | ||||||
Illinois — 10.7% | ||||||||
Carol Stream Park District, General Obligation Bonds Insured: BAM 5.000%, due 1/1/37 | 195,000 | 221,233 | ||||||
City of Chicago IL Waterworks Revenue, Revenue Bonds Insured: AGM 5.250%, due 11/1/34 | 225,000 | 264,197 | ||||||
Madison County Community Unit School District No 7 Edwardsville, General Obligation Bonds Insured: BAM 5.000%, due 12/1/30 | 375,000 | 420,278 | ||||||
State of Illinois, Revenue Bonds Series 2 Insured: NATL 5.750%, due 6/15/19 | 100,000 | 106,823 | ||||||
Village of Rosemont IL, General Obligation Bonds Series A Insured: AGM 5.000%, due 12/1/27 | 500,000 | 576,815 | ||||||
1,589,346 | ||||||||
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Kentucky — 6.1% | ||||||||
Kentucky Asset Liability Commission, Revenue Bonds Series B Insured: NATL 1.472%, due 11/1/25(a) | $ | 130,000 | $ | 126,637 | ||||
Kentucky Economic Development Finance Authority, Revenue Bonds Series A Insured: AGM 4.000%, due 6/1/37 | 500,000 | 513,620 | ||||||
Louisville & Jefferson County Visitors and Convention Commission, Revenue Bonds Insured: BAM 4.000%, due 6/1/36 | 250,000 | 263,362 | ||||||
903,619 | ||||||||
Minnesota — 3.0% | ||||||||
City of Minneapolis MN/St Paul Housing & Redevelopment Authority, Revenue Bonds Class A Insured: AGM 0.810%, due 8/15/34(a) | 200,000 | 200,000 | ||||||
0.810%, due 8/15/37(a) | 250,000 | 250,000 | ||||||
450,000 | ||||||||
Missouri — 3.8% | ||||||||
St Louis Municipal Finance Corp., Revenue Bonds Insured: AGM 5.000%, due 10/1/38 | 500,000 | 572,725 | ||||||
New Jersey — 3.4% | ||||||||
City of Atlantic City NJ, General Obligation Bonds Series B Insured: AGM 4.000%, due 3/1/42 | 500,000 | 512,520 | ||||||
New York — 6.6% | ||||||||
City of New York NY, General Obligation Bonds Series H Insured: AGM 0.890%, due 8/1/22(a) | 500,000 | 500,000 | ||||||
New York State Energy Research & Development Authority, Revenue Bonds Class A Insured: XLCA 3.104%, due 7/1/29(a) | 500,000 | 494,470 | ||||||
994,470 | ||||||||
Ohio — 3.3% | ||||||||
County of Montgomery OH, Revenue Bonds Series C 0.850%, due 11/15/39(a) | 500,000 | 500,000 | ||||||
Pennsylvania — 9.8% | ||||||||
Luzerne County Industrial Development Authority, Revenue Bonds Insured: AGM 5.000%, due 12/15/26 | 525,000 | 600,148 | ||||||
5.000%, due 12/15/27 | 490,000 | 556,361 | ||||||
Township of Amity PA, General Obligation Bonds Insured: BAM 4.000%, due 5/1/18 | 300,000 | 304,332 | ||||||
1,460,841 |
October 31, 2017 (unaudited)
Principal Amount | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Tennessee — 3.3% | ||||||||||
Shelby County Health Educational & Housing Facilities Board, Revenue Bonds Series A Insured: AGM 0.820%, due 6/1/42(a) | $ | 500,000 | $ | 500,000 | ||||||
Texas — 6.6% | ||||||||||
Harris County Cultural Education Facilities Finance Corp., Revenue Bonds Series B-1 0.830%, due 9/1/31(a) | 500,000 | 500,000 | ||||||||
Series C-1 0.850%, due 12/1/24(a) | 500,000 | 500,000 | ||||||||
1,000,000 | ||||||||||
Washington — 3.3% | ||||||||||
Washington State Housing Finance Commission, Revenue Bonds 0.860%, due 6/1/32(a) | 500,000 | 500,000 | ||||||||
Total Municipal Bonds (Cost $13,339,059) | 13,313,755 |
Shares | Value | |||||||||
Short-Term Investment — 29.9% | ||||||||||
Money Market Fund — 29.9% | ||||||||||
Fidelity Investments Money Market Treasury Only Class I*, 0.91%(b) (Cost $4,484,459) | 4,484,459 | $ | 4,484,459 | |||||||
Total Investments — 118.7% (Cost $17,823,518) | 17,798,214 | |||||||||
Other Assets and Liabilities, Net — (18.7)% | (2,804,666 | ) | ||||||||
Net Assets — 100.0% | $ | 14,993,548 |
* | The Fund commenced operations on October 18, 2017. As of October 31, 2017, the Fund was still in its initial invest-up period and cash not yet invested in municipal bonds was held in the money market fund. |
(a) | Variable rate securities that may be tendered back to the issuer at any time prior to maturity at par. Rate shown is the rate in effect as of October 31, 2017. |
(b) | Reflects the 7-day yield at October 31, 2017. |
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Investments in Securities:(c) | ||||||||||||||||||
Municipal Bonds | $ | — | $ | 13,313,755 | $ | — | $ | 13,313,755 | ||||||||||
Short-Term Investment: | ||||||||||||||||||
Money Market Fund | 4,484,459 | — | — | 4,484,459 | ||||||||||||||
Total Investments in Securities | $ | 4,484,459 | $ | 13,313,755 | $ | — | $ | 17,798,214 |
(c) | For a complete listing of investments and their states, see the Schedules of Investments. |
Principal Amount | Value | |||||||
Municipal Bonds — 67.9% | ||||||||
California — 2.6% | ||||||||
California Statewide Communities Development Authority, Revenue Bonds Series W-2 0.900%, due 9/15/29(a) | $ | 500,000 | $ | 500,000 | ||||
West Sacramento Financing Authority, Revenue Bond Insured: BAM 4.000%, due 10/1/31 | 250,000 | 276,918 | ||||||
776,918 | ||||||||
Connecticut — 3.8% | ||||||||
City of Hartford CT, General Obligation Bonds Series A Insured: AGM 5.000%, due 7/1/28 | 560,000 | 615,222 | ||||||
City of New Haven CT, General Obligation Bonds Series B Insured: BAM 5.000%, due 8/1/25 | 475,000 | 554,505 | ||||||
1,169,727 | ||||||||
Delaware — 1.7% | ||||||||
Delaware River & Bay Authority, Revenue Bonds Series C 5.000%, due 1/1/18 | 500,000 | 503,175 | ||||||
Florida — 7.1% | ||||||||
City of Gainesville FL Utilities System Revenue, Revenue Bonds Series A 5.000%, due 10/1/33 | 500,000 | 599,305 | ||||||
County of Escambia FL, Revenue Bonds Series 2 0.940%, due 4/1/39(a) | 500,000 | 500,000 | ||||||
Pinellas County Health Facilities Authority, Revenue Bonds Class A1 0.920%, due 11/1/38(a) | 500,000 | 500,000 | ||||||
Putnam County Development Authority, Revenue Bonds 0.860%, due 9/1/24(a) | 500,000 | 500,000 | ||||||
2,099,305 | ||||||||
Georgia — 3.3% | ||||||||
Burke County Development Authority, Revenue Bonds 0.950%, due 11/1/52(a) | 1,000,000 | 1,000,000 | ||||||
Illinois — 8.9% | ||||||||
Carol Stream Park District, General Obligation Bonds Insured: BAM 5.000%, due 1/1/37 | 195,000 | 221,233 | ||||||
City of Chicago IL Waterworks Revenue, Revenue Bonds Insured: AGM 5.250%, due 11/1/34 | 230,000 | 270,068 | ||||||
Illinois Finance Authority, Revenue Bonds 5.000%, due 9/1/25 | 500,000 | 561,000 | ||||||
Madison County Community Unit School District No 7 Edwardsville, General Obligation Bonds Insured: BAM 5.000%, due 12/1/29 | 500,000 | 561,870 | ||||||
Town of Cicero IL, General Obligation Bonds Insured: BAM 5.000%, due 12/1/26 | 500,000 | 559,790 | ||||||
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Illinois (continued) | ||||||||
Village of Rosemont IL, General Obligation Bonds Series A Insured: AGM 5.000%, due 12/1/27 | $ | 500,000 | $ | 576,815 | ||||
2,750,776 | ||||||||
Iowa — 3.4% | ||||||||
City of Hills IA, Revenue Bonds 0.910%, due 8/1/35(a) | 500,000 | 500,000 | ||||||
Iowa Higher Education Loan Authority, Revenue Bonds 0.860%, due 10/1/33(a) | 500,000 | 500,000 | ||||||
1,000,000 | ||||||||
Kentucky — 3.7% | ||||||||
Kentucky Economic Development Finance Authority, Revenue Bonds Series A Insured: BAM 4.000%, due 6/1/37 | 325,000 | 333,853 | ||||||
Louisville & Jefferson County Visitors and Convention Revenue Bonds Insured: BAM 4.000%, due 6/1/36 | 250,000 | 263,362 | ||||||
Louisville/Jefferson County Metropolitan Government, Revenue Bonds Series B 0.830%, due 10/1/39(a) | 500,000 | 500,000 | ||||||
1,097,215 | ||||||||
Minnesota — 1.7% | ||||||||
City of Minneapolis MN/St Paul Housing & Redevelopment Authority, Revenue Bonds Series B 0.830%, due 11/15/35(a) | 500,000 | 500,000 | ||||||
Missouri — 3.4% | ||||||||
Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds 0.840%, due 11/1/27(a) | 500,000 | 500,000 | ||||||
0.870%, due 12/1/35(a) | 500,000 | 500,000 | ||||||
1,000,000 | ||||||||
Montana — 1.7% | ||||||||
City of Forsyth MT, Revenue Bonds 0.870%, due 1/1/18(a) | 500,000 | 500,000 | ||||||
Nebraska — 1.7% | ||||||||
Douglas County Hospital Authority No 2, Revenue Bonds Class A 0.840%, due 8/15/32(a) | 500,000 | 500,000 | ||||||
New York — 7.2% | ||||||||
City of New York NY, General Obligation Bonds Series H Insured: AGM 0.890%, due 8/1/22(a) | 500,000 | 500,000 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Revenue Bonds Series B 5.000%, due 8/1/34 | 1,000,000 | 1,192,140 | ||||||
New York State Energy Research & Development Authority, Revenue Bonds Class A Insured: XLCA 3.104%, due 7/1/29(a) | 500,000 | 494,470 | ||||||
2,186,610 |
October 31, 2017 (unaudited)
Principal Amount | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Ohio — 3.4% | ||||||||||
County of Montgomery OH, Revenue Bonds Series C 0.850%, due 11/15/39(a) | $ | 500,000 | $ | 500,000 | ||||||
Ohio Higher Educational Facility Commission, Revenue Bonds Class A 5.250%, due 1/1/19 | 510,000 | 513,529 | ||||||||
1,013,529 | ||||||||||
Pennsylvania — 4.1% | ||||||||||
Luzerne County Industrial Development Authority, Revenue Bonds Insured: AGM 5.000%, due 12/15/27 | 1,000,000 | 1,135,430 | ||||||||
Warwick School District, General Obligation Bonds 4.000%, due 2/15/18 | 100,000 | 100,848 | ||||||||
1,236,278 | ||||||||||
Tennessee — 1.7% | ||||||||||
Shelby County Health Educational & Housing Facilities Board, Revenue Bonds Series A Insured: AGM 0.820%, due 6/1/42(a) | 500,000 | 500,000 | ||||||||
Texas — 6.8% | ||||||||||
City of San Antonio TX, General Obligation Bonds 5.000%, due 2/1/18 | 460,000 | 464,536 | ||||||||
Harris County Cultural Education Facilities Finance Corp., Revenue Bonds Series C-1 0.850%, due 12/1/24(a) | 500,000 | 500,000 | ||||||||
Tarrant County Cultural Education Facilities Finance Corp., Revenue Bonds Series C 0.830%, due 11/15/50(a) | 500,000 | 500,000 | ||||||||
Uptown Development Authority, Revenue Bonds Series A 5.000%, due 9/1/35 | 500,000 | 564,225 | ||||||||
2,028,761 | ||||||||||
Principal Amount | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Washington — 1.7% | ||||||||||
Washington State Housing Finance Commission, Revenue Bonds 0.860%, due 6/1/32(a) | $ | 500,000 | $ | 500,000 | ||||||
Total Municipal Bonds (Cost $20,405,383) | 20,362,294 |
Shares | ||||||||||
Short-Term Investment — 42.1% | ||||||||||
Money Market Fund — 42.1% | ||||||||||
Fidelity Investments Money Market Treasury Only Class I, 0.91%(b)* (Cost $12,627,547) | 12,627,547 | 12,627,547 | ||||||||
Total Investments — 110.0% (Cost $33,032,930) | 32,989,841 | |||||||||
Other Assets and Liabilities, Net — (10.0)% | (3,013,967 | ) | ||||||||
Net Assets — 100.0% | $ | 29,975,874 |
* | The Fund commenced operations on October 18, 2017. As of October 31, 2017, the Fund was still in its initial invest-up period and cash not yet invested in municipal bonds was held in the money market fund. |
(a) | Variable rate securities that may be tendered back to the issuer at any time prior to maturity at par. Rate shown is the rate in effect as of October 31, 2017. |
(b) | Reflects the 7-day yield at October 31, 2017. |
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Investments in Securities:(c) | ||||||||||||||||||
Municipal Bonds | $ | — | $ | 20,362,294 | $ | — | $ | 20,362,294 | ||||||||||
Short-Term Investment: | ||||||||||||||||||
Money Market Fund | 12,627,547 | — | — | 12,627,547 | ||||||||||||||
Total Investments in Securities | $ | 12,627,547 | $ | 20,362,294 | $ | — | $ | 32,989,841 |
(c) | For a complete listing of investments and their states, see the Schedules of Investments. |
IQ MacKay Shields Municipal Insured ETF | IQ MacKay Shields Municipal Intermediate ETF | |||||||||
Assets | ||||||||||
Investments in securities, at value | $ | 17,798,214 | $ | 32,989,841 | ||||||
Interest receivable | 58,191 | 90,028 | ||||||||
Dividend receivable | 595 | 2,332 | ||||||||
Due from Advisor | 4,520 | 3,412 | ||||||||
Total assets | 17,861,520 | 33,085,613 | ||||||||
Liabilities | ||||||||||
Payable for investment securities purchases | 2,862,096 | 3,103,863 | ||||||||
Trustees fees payable | 119 | 119 | ||||||||
Compliance fees payable | 6 | 6 | ||||||||
Accrued expenses and other liabilities | 5,751 | 5,751 | ||||||||
Total liabilities | 2,867,972 | 3,109,739 | ||||||||
Net assets | $ | 14,993,548 | $ | 29,975,874 | ||||||
Composition of Net Assets | ||||||||||
Paid-in capital | $ | 15,009,521 | $ | 30,011,675 | ||||||
Undistributed net investment income | 6,770 | 7,288 | ||||||||
Accumulated net realized gain | 2,561 | — | ||||||||
Net unrealized depreciation | (25,304 | ) | (43,089 | ) | ||||||
Net assets | $ | 14,993,548 | $ | 29,975,874 | ||||||
NET ASSET VALUE PER SHARE | ||||||||||
Outstanding shares (no par value, unlimited shares authorized) | 600,001 | 1,200,001 | ||||||||
Net asset value per share | $ | 24.99 | $ | 24.98 | ||||||
Investments, at cost | $ | 17,823,518 | $ | 33,032,930 |
IQ MacKay Shields Municipal Insured ETF** | IQ MacKay Shields Municipal Intermediate ETF** | |||||||||
Investment Income | ||||||||||
Interest | $ | 7,531 | $ | 7,420 | ||||||
Dividend | 595 | 2,332 | ||||||||
Total investment income | 8,126 | 9,752 | ||||||||
Expenses | ||||||||||
Advisory fees | 1,808 | 3,286 | ||||||||
Professional fees | 1,643 | 1,643 | ||||||||
Administrative fees | 1,279 | 1,278 | ||||||||
Shareholder reporting fees | 722 | 722 | ||||||||
Distributor fees | 632 | 632 | ||||||||
Listing fees | 541 | 541 | ||||||||
Custodian fees | 505 | 505 | ||||||||
Registration fees | 418 | 418 | ||||||||
Trustee fees | 119 | 119 | ||||||||
Insurance fees | 7 | 7 | ||||||||
Compliance fees | 6 | 6 | ||||||||
Miscellaneous fees | 4 | 4 | ||||||||
Total expenses | 7,684 | 9,161 | ||||||||
Waivers | (6,328 | ) | (6,697 | ) | ||||||
Net expenses | 1,356 | 2,464 | ||||||||
Net investment income | 6,770 | 7,288 | ||||||||
Realized and Unrealized Gain (Loss) on Investments | ||||||||||
Net realized gain (loss) on: Investment transactions | 2,561 | — | ||||||||
Net realized gain | 2,561 | — | ||||||||
Net change in net unrealized depreciation on: Investments | (25,304 | ) | (43,089 | ) | ||||||
Net change in net unrealized depreciation on investments | (25,304 | ) | (43,089 | ) | ||||||
Net realized and unrealized loss on investments | (22,743 | ) | (43,089 | ) | ||||||
Net decrease in net assets resulting from operations | $ | (15,973 | ) | $ | (35,801 | ) |
** | Commencement of operations was October 18, 2017. |
IQ MacKay Shields Municipal Insured ETF | IQ MacKay Shields Municipal Intermediate ETF | |||||||||
Increase (Decrease) in Net Assets Operations: | ||||||||||
Net investment income | $ | 6,770 | $ | 7,288 | ||||||
Net realized gain on investments | 2,561 | — | ||||||||
Net change in net unrealized depreciation on investments | (25,304 | ) | (43,089 | ) | ||||||
Net decrease in net assets resulting from operations | (15,973 | ) | (35,801 | ) | ||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares created | 15,009,496 | 30,011,650 | ||||||||
Increase from capital share transactions | 15,009,496 | 30,011,650 | ||||||||
Total increase in net assets | 14,993,523 | 29,975,849 | ||||||||
Net Assets | ||||||||||
Beginning of period | 25 | 25 | ||||||||
End of period | $ | 14,993,548 | $ | 29,975,874 | ||||||
Undistributed net investment income included in net assets at the end of the period: | $ | 6,770 | $ | 7,288 | ||||||
Changes in Shares Outstanding | ||||||||||
Shares outstanding, beginning of period | 1 | 1 | ||||||||
Shares created | 600,000 | 1,200,000 | ||||||||
Shares outstanding, end of period | 600,001 | 1,200,001 |
* | Commencement of operations. |
IQ MacKay Shields Municipal Insured ETF | IQ MacKay Shields Municipal Intermediate ETF | |||||||||
Net asset value at beginning of period | $ | 25.00 | $ | 25.00 | ||||||
Income from Investment Operations | ||||||||||
Net investment income(b)* | 0.01 | 0.01 | ||||||||
Net realized and unrealized loss on investments | (0.02 | ) | (0.03 | ) | ||||||
Net decrease in net assets resulting from investment operations | (0.01 | ) | (0.02 | ) | ||||||
Net asset value, end of period | $ | 24.99 | $ | 24.98 | ||||||
Market Price, end of period | $ | 25.00 | $ | 25.00 | ||||||
Total Return | ||||||||||
Total investment return based on net asset value(c) | (0.04 | )% | (0.08 | )% | ||||||
Total investment return based on Market Value(d)(g) | 0.00 | % | 0.00 | % | ||||||
Ratios/Supplement Data | ||||||||||
Net assets, end of period in 000’s | $ | 14,994 | $ | 29,976 | ||||||
Ratio to average net assets of: | ||||||||||
Net investment income (loss)*(e) | 1.50 | % | 0.89 | % | ||||||
Net expenses(e) | 0.30 | % | 0.30 | % | ||||||
Expenses (before waiver)(e) | 1.70 | % | 1.12 | % | ||||||
Portfolio turnover rate(f) | 24 | % | 0 | % |
* | Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the investment companies in which the Fund invests. |
(a) | Commencement of operations. |
(b) | Based on average shares outstanding. |
(c) | 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. |
(d) | Since the shares of the Funds did not trade in the secondary market until the day after the Fund’s inception, for the period from inception to the first day of the secondary market trading, the NAV is used as a proxy for the secondary market trading price to calculate market returns. |
(e) | Annualized. |
(f) | 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. |
(g) | The market price returns are calculated using its mean between the last bid and ask prices. |
October 31, 2017 (unaudited)
October 31, 2017 (unaudited)
• | 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. |
October 31, 2017 (unaudited)
October 31, 2017 (unaudited)
Fund | Rate | |||
IQ MacKay Shields Municipal Insured ETF | 0.40% | |||
IQ MacKay Shields Municipal Intermediate ETF | 0.40% |
October 31, 2017 (unaudited)
Fund | Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) | ||||||||||||||
IQ MacKay Shields Municipal Insured ETF | $ | 17,823,518 | $ | 10,246 | $ | (35,550 | ) | $ | (25,304 | ) | ||||||||
IQ MacKay Shields Municipal Intermediate ETF | 33,032,930 | 5,631 | (48,720 | ) | (43,089 | ) |
October 31, 2017 (unaudited)
Fund | % Ownership | |||||
IQ MacKay Shields Municipal Insured ETF | 99.7% | |||||
IQ MacKay Shields Municipal Intermediate ETF | 99.9% |
Fund | Purchases | Sales | Purchases In-Kind | Sales In-Kind | ||||||||||||||
IQ MacKay Shields Municipal Insured ETF | $ | 14,570,810 | $ | 1,537,560 | — | — | ||||||||||||
IQ MacKay Shields Municipal Intermediate ETF | 18,837,594 | — | — | — |
October 31, 2017 (unaudited)
1. | The nature, extent and quality of the facilities and services provided by the Advisor and MacKay. The Independent Trustees reviewed the services that the Advisor and MacKay would provide to the Funds. In connection with the investment advisory services to be provided to the Funds, the Independent Trustees noted the responsibilities that the Advisor and MacKay would have as the Funds’ investment adviser and sub-adviser, respectively, including overall supervisory responsibility for the general management and investment of the Funds’ securities portfolio, ultimate responsibility, subject to oversight by the Board, for daily monitoring of the Funds and quarterly reporting to the Board, and the implementation of Board directives as they relate to the Funds. |
The Independent Trustees again reviewed the Advisor’s and MacKay’s experience, resources, and strengths in managing other mutual funds and ETFs. The Independent Trustees also considered the Advisor’s performance in managing the existing series of the IndexIQ Trust and IndexIQ ETF Trust. The Independent Trustees reviewed the experience of MacKay’s team in managing strategies and asset classes similar to those of the Funds. Based on their consideration and review of the foregoing information, the Independent Trustees determined that the Funds would likely to benefit from the nature, quality, and extent of these services, as well as each of the Advisor’s and MacKay’s ability to render such services based on its experience, operations, and resources. |
2. | Comparison of services to be provided and fees to be charged by the Advisor and MacKay and other investment advisers to similar clients, and the cost of the services to be provided and profits to be realized by the Advisor and MacKay from the relationship with the Funds. The Independent Trustees then compared both the services to be rendered and the proposed fees to be paid pursuant to the Investment Advisory Agreement with the Advisor and to contracts of other investment advisers with respect to similar mutual funds and ETFs, as well as the operational series of the IndexIQ ETF Trust. In particular, the Independent Trustees compared the Funds’ proposed advisory fees and projected expense ratios for its first year of operations to other ETFs in the Funds’ peer group. The Independent Trustees also considered that the Advisor had proposed an Expense Limitation Agreement to limit the total operating expenses of each Fund for a period of at least one year. |
The Independent Trustees also considered that the Advisor is responsible for payment of the sub-advisory fee to MacKay pursuant to the Sub-Advisory Agreement contract. They considered the level of such sub-advisory fee in the context of the services to be provided. |
After comparing the Funds’ proposed fees with those of other funds in the Funds’ respective peer groups, and in light of the nature, quality, and extent of services proposed to be provided by the Advisor and MacKay and the costs expected to be incurred by the Advisor and MacKay in rendering those services, the Independent Trustees concluded that the fees proposed to be paid to the Advisor and MacKay with respect to the Funds was fair and reasonable. |
3. | The Advisor’s and MacKay’s profitability and the extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of scale. The Independent Trustees next considered potential economies of scale and the anticipated costs and projected profitability of each of the Advisor and MacKay in connection with their serving as investment adviser and investment sub-adviser, respectively, to the Funds, including operational costs. |
4. | Investment performance of the Advisor and MacKay. Because Funds have not commenced operations, the Independent Trustees could not consider the investment performance of the Funds, but did take into account the investment performance of other strategies managed by MacKay, and peer performance. |
Based on the foregoing and such other matters as were deemed relevant, and while no single factor was determinative in the decision, the Independent Trustees concluded that the terms of the amended Investment Advisory Agreement with the Advisor and the Sub-Advisory Agreement with MacKay were reasonable and fair to the Funds and to recommend to the Board the approval of the amended Investment Advisory Agreement and Sub-Advisory Agreement. As a result, all of the Board members, including the Independent Trustees, determined that the Investment Advisory Agreement and the Sub-Advisory Agreement were each in the best interests of the Funds. The Board and the Independent Trustees, voting separately, approved the Investment Advisory Agreement and the Sub-Advisory Agreement for an initial two-year period. |
IQ MacKay Shields Municipal Intermediate ETF
Investment Advisor
IndexIQ Advisors LLC
800 Westchester Avenue
Suite S-710
Rye Brook, NY 10573
Distributor
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203
Custodian/Fund Administrator/Lending Agent/Transfer Agent
The Bank of New York Mellon
101 Barclay Street
New York, NY 10286
Legal Counsel
Chapman and Cutler LLP
1270 Avenue of the Americas
New York, New York 10020
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
1758022 | ME10a-12/17 |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable. |
Item 13. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) IndexIQ Active ETF Trust
By (Signature and Title)* /s/ Adam S. Patti
Adam S. Patti
(Principal Executive Officer)
Date 12/28/2017
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ Adam S. Patti
Adam S. Patti
(Principal Executive Officer)
Date 12/28/2017 ��
By (Signature and Title)* /s/ David L. Fogel
David L. Fogel
(Principal Financial Officer)
Date 12/28/2017
* Print the name and title of each signing officer under his or her signature.