Indexiq ETF Trust Semiannual Report
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IndexIQ ETF Trust Semi-Annual Report October 31, 2020 IQ Hedge Multi-Strategy Tracker ETF (QAI) IQ Global Resources ETF (GRES) IQ Hedge Macro Tracker ETF (MCRO) IQ U.S. Real Estate Small Cap ETF (ROOF) IQ Hedge Market Neutral Tracker ETF (QMN) IQ 500 International ETF (IQIN) IQ Hedge Long/Short Tracker ETF (QLS) IQ 50 Percent Hedged FTSE International ETF (HFXI) IQ Hedge Event-Driven Tracker ETF (QED) IQ Candriam ESG International Equity ETF (IQSI) IQ Real Return ETF (CPI) IQ Candriam ESG U.S. Equity ETF (IQSU) IQ Enhanced Core Plus Bond U.S. ETF (AGGP) IQ Chaikin U.S. Small Cap ETF (CSML) IQ S&P High Yield Low Volatility Bond ETF (HYLV) IQ Chaikin U.S. Large Cap ETF (CLRG) IQ Merger Arbitrage ETF (MNA) Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you hold accounts through a financial intermediary, you may contact your financial intermediary to enroll in electronic delivery. Please note that not all financial intermediaries may offer this service. You may elect to receive all future reports in paper free of charge. If you hold accounts through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with your financial intermediary. 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 newyorklifeinvestments.com or by calling 1-888-474-7725. Read the prospectus carefully before investing. Each of the Funds’ performance that is current to the most recent month-end is available by visiting newyorklifeinvestments.com or by calling 1-888-474-7725. You may obtain a description of the IndexIQ ETF Trust proxy voting policies, procedures and information regarding how each Fund voted proxies relating to portfolio securities during the 12-month period ending June 30 (available by August 31) without charge, upon request, by calling 1-888-474-7725 or by accessing the SEC’s website at sec.gov. 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-PORT. The Funds’ Forms N-PORT are available on the Commission’s website at sec.gov. Each Funds’ premium/discount information is available, free of charge, on the Funds’ website newyorklifeinvestments.com or by calling 1-888-474-7725. IndexIQ® and IQ® are registered service marks of New York Life Insurance Company. “New York Life Investments” is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company. New York Life Investments is a service mark and name under which New York Life Investment Management LLC does business. New York Life Investments, an indirect subsidiary of New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010, provides investment advisory products and services. IndexIQ® is an indirect wholly owned subsidiary of New York Life Investment Management Holdings LLC. ALPS Distributors, Inc. (“ALPS”) is the principal underwriter of the ETFs, and NYLIFE Distributors LLC is a distributor of the ETFs. NYLIFE Distributors LLC is located at 30 Hudson Street, Jersey City, NJ 07302. ALPS Distributors, Inc. is not affiliated with NYLIFE Distributors LLC. NYLIFE Distributors LLC is a Member FINRA/SIPC. Help Preserve the Environment — Go Green! With e-Delivery, you can: • Receive email notifications when your most recent shareholder communications are available for review. • Access prospectuses, annual reports and semi-annual reports online. It’s easy to enroll: 1. Visit https://www.icsdelivery.com/live/ 2. Follow the simple enrollment instructions If you have questions about IndexIQ e-Delivery services, contact a representative at 1-888-474-7725. Table of Contents Shareholder Letter .................................................................... 5 Fund Expenses ....................................................................... 7 Portfolio Summaries ................................................................... 9 Schedules of Investments IQ Hedge Multi-Strategy Tracker ETF .................................................... 14 IQ Hedge Macro Tracker ETF .......................................................... 22 IQ Hedge Market Neutral Tracker ETF ................................................... 26 IQ Hedge Long/Short Tracker ETF ....................................................... 30 IQ Hedge Event-Driven Tracker ETF ..................................................... 33 IQ Real Return ETF .................................................................. 35 IQ Enhanced Core Plus Bond U.S. ETF ................................................... 37 IQ S&P High Yield Low Volatility Bond ETF ................................................. 39 IQ Merger Arbitrage ETF .............................................................. 47 IQ Global Resources ETF .............................................................. 50 IQ U.S. Real Estate Small Cap ETF ....................................................... 54 IQ 500 International ETF .............................................................. 56 IQ 50 Percent Hedged FTSE International ETF .............................................. 62 IQ Candriam ESG International Equity ETF ................................................ 73 IQ Candriam ESG U.S. Equity ETF ....................................................... 80 IQ Chaikin U.S. Small Cap ETF .......................................................... 84 IQ Chaikin U.S. Large Cap ETF ......................................................... 90 Statements of Assets and Liabilities ....................................................... 92 Statements of Operations .............................................................. 97 Statements of Changes in Net Assets ..................................................... 102 Financial Highlights ................................................................... 111 Notes to Financial Statements ........................................................... 128 4 Shareholder Letter (unaudited) Shareholder: We are pleased to present you with this semiannual report for IndexIQ ETF Trust for the six months ended October 31, 2020. Although the global coronavirus pandemic continued to afflict populations and economies around the world, most broad U.S. and international stock and bond markets gained ground during the reporting period, rebounding from steep, earlier, pandemic-related declines. The backdrop for the reporting period was set in February and March 2020 as COVID-19 spread worldwide. Governments struggled to support overburdened health care systems by issuing “stay-at-home” orders and placing restrictions on nonessential activity. These responses slowed global economic activity, driving stock and bond indices sharply lower worldwide. Emergency monetary and fiscal measures promised economic relief, and by early April, market sentiment began to improve. Some sectors of the global economy remained depressed and many questions surrounding the pandemic had yet to be answered. Nevertheless, investors looked forward to a gradual lessening of restrictions on nonessential businesses, the possibility of additional stimulus and apparent progress in the development of a vaccine. As the reporting period began on May 1, 2020, the S&P 500® Index, a widely regarded benchmark of U.S. equity market performance, had already recovered much of the ground it lost in February and March. By late-August, the S&P 500® Index had reached new record levels. However, a resurgence of coronavirus cases in many parts of the country and uncertainties related to the upcoming U.S. presidential election caused the rally to falter as the reporting period drew to a close. Nevertheless, for the reporting period as a whole, U.S. equity indices generally produced strong gains. Returns proved most robust among small- to mid-cap stocks and growth-oriented stocks, while large-cap and value-oriented issues posted slightly milder gains. Within the S&P 500® Index, the consumer discretionary sector generated the strongest returns buoyed by better-than-expected levels of consumer spending. The materials, information technology, industrials and communication services sectors all outperformed the S&P 500® Index. The utilities, financials, consumer staples, health care and real estate sectors generated positive returns but lagged the Index. Only the energy sector ended the reporting period in negative territory, experiencing sharp