Three Pioneering IndexIQ ETFs Mark Their Fifth Anniversary

IndexIQ, a leading developer of liquid alternative investment solutions, today announced that three of its pioneering liquid alternative exchange-traded funds (ETFs) have marked their five-year anniversaries.

The IQ Merger Arbitrage ETF (NYSE Arca: MNA), the first ETF designed to give investors exposure to the global corporate mergers and acquisitions (M&A) marketplace, turned five on November 17th. The IQ Global Resources ETF (NYSE Arca: GRES), the first global resources hedged ETF, and the IQ Real Return ETF (NYSE Arca: CPI), which uses a multi-asset class approach in seeking to deliver a “real return” above the U.S. inflation rate, both reached the five-year mark on October 27th.

MNA – efficient way to gain global M&A exposure

“We designed MNA and its underlying index to provide investors with broad-based exposure to the global M&A market,” said Adam Patti, chief executive officer at IndexIQ. “This year has been one of the strongest on record for M&A activity, a trend that appears likely to continue into 2015. This should drive even more opportunities for the fund to take advantage of the merger arbitrage strategy.”

MNA was designed to provide capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer, a strategy generally known as “merger arbitrage.” This strategy generally seeks to take advantage of the price differential, where it exists, between the current trading price of a stock and the price of that stock at the time the deal is completed. It seeks to track, before fees and expenses, the performance of the IQ Merger Arbitrage Index.

CPI – multi-asset class approach to seek a “real return” above the U.S. inflation rate

“Five years ago, when we looked at the landscape of inflation hedging products, we believed there was an opportunity to improve on what was then available to investors,” said Patti. “In our view, Treasury Inflation Protected Securities (TIPS), gold, and real estate all had weaknesses individually as inflation hedges. Our approach is built upon exposure to multiple asset classes, which we believe is a better way to achieve investor objectives.”

CPI seeks investment results that correspond, before fees and expenses, to the price and yield performance of the IQ Real Return Index. The Index provides exposures to asset classes whose returns are believed to incorporate inflation expectations, and may include gold, U.S. treasuries, emerging markets equities, and real estate, among others.

GRES – expansive exposure to global resources and commodities in liquid, transparent vehicle

“GRES was designed as a vehicle for providing the broadest possible exposure to global commodities with relatively low volatility,” said Patti. “Over the past five years, we have seen substantial ups and downs in commodities, and throughout this timeframe, GRES has performed as we had hoped. We believe the long-term trends favoring growth in demand for this asset class remain intact.”

GRES seeks investment results that correspond, before fees and expenses, to the price and yield performance of the IQ Global Resources Index. GRES provides broad-based exposure across eight sectors of the Commodity and Global Natural Resources space, including the major commodity sectors (Precious Metals, Industrial Metals, Livestock, Energy, and Grains, Food & Fiber), plus Timber, Water and Coal. The fund is diversified geographically and by sector, with its components collectively representing one of the broadest commodity and natural resource exposures in the ETF industry. The fund has no K-1 and does not suffer from contango and backwardation.

IndexIQ indexes underlie a variety of investment products, including ETFs, mutual funds, and institutional accounts. IndexIQ products are designed to be liquid, transparent, low cost,* and accessible to a broad range of investors. In addition to MNA, CPI and GRES, other first of their kind funds introduced to the market by IndexIQ include the following:

• IQ Alpha Hedge Strategy Fund (IQHIX – Institutional Share Class; IQHOX – Investor Share Class), the first open-end, no-load hedge fund replication mutual fund;
• IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first US-listed hedge fund replication Exchange-Traded Fund;
• IQ Hedge Market Neutral Tracker ETF (NYSE Arca: QMN) providing exposure to the market neutral hedge fund universe;
• IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro/Emerging Markets hedge fund replication ETF;
• IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF), the first US Real Estate Small Cap ETF;
• IQ Global Agribusiness Small Cap ETF (NYSE Arca: CROP), the first agribusiness small cap ETF;
• IQ Global Oil Small Cap ETF (NYSE Arca: IOIL), the first global oil small cap ETF;
• IQ Canada Small Cap ETF (NYSE Arca: CNDA), the first Canada small cap ETF;
• IQ Australia Small Cap ETF (NYSE Arca: KROO), the first Australia small cap ETF.

About IndexIQ

IndexIQ is a leading issuer of liquid alternative solutions focused on absolute return, real asset and international strategies. IndexIQ solutions are offered as ETFs, Mutual Funds, Separate Accounts and Model Portfolios. IndexIQ’s philosophy is to democratize investment management by making innovative alternative investment strategies available to investors in low cost, liquid and transparent products.* Additional information about the company and its products can be found at www.IndexIQ.com.

*IndexIQ’s ETF holdings are available daily on IndexIQ’s website. Brokerage commissions apply to ETFs. ETFs are liquid in that they are exchange-traded.

Investors in GRES do not receive K-1s for tax reporting purposes, as do investors in other commodities and natural resources investments. GRES distributes a single Form 1099 to its shareholders. Contango (backwardation) occurs when the futures price is above (below) the expected future spot price, resulting in the price declining (rising) to the spot price before the delivery date.

MNA: 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 may invest its assets in a relatively small number of issuers, thus making an investment in the Fund potentially more risky than an investment in a diversified fund which is otherwise similar to the Fund. 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 non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund.

CPI: The Fund seeks investment results that correspond, before fees and expenses, to the price and yield performance of the IQ Real Return Index (the “CPI Index”). The CPI Index seeks to provide 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, which is published by the Bureau of Labor Statistics and is a measure of the average change in prices over time of goods and services purchased by households. The Fund’s investment performance, because it is a fund of funds, depends on the investment performance of the underlying ETFs in which it invests. There is no guarantee that the Fund itself, or each of the ETFs in the Fund’s portfolio, will perform exactly as its underlying index. The Fund’s 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. Loss may result from the imposition of exchange controls, confiscations and other government restrictions. Foreign risks will normally be greater when the Fund invests in emerging markets. 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.

GRES: The Fund seeks investment results that correspond, before fees and expenses, to the price and yield performance of the IQ Global Resources Index (the “GRES Index”). The GRES Index uses 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. 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 may fluctuate more widely than that of a fund which invests in a broad range of industries. The Fund also may be 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 insecurities 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.

Investors are reminded that all investing involves risk, including possible loss of principal. Consider the Funds’ investment objectives, risks, charges and expenses carefully before investing. A prospectus with this and other information about the Funds may be obtained by visiting www.indexiq.com or by calling (888) 934-0777. Read the prospectus carefully before investing.

IndexIQ ETFs and mutual funds are distributed by ALPS Distributors, Inc., which is not affiliated with IndexIQ. Adam Patti is a registered representative of ALPS.

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