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IQ Insight

www.IndexIQ.com Salvatore J. Bruno, Chief Investment Officer Performance Snapshot


As of April 30, 2013 As of March 31, 2013
Since Index Inception* 1 Year 2.69% 2.43% 4.61% Since Fund Inception* 2.88% 2.56% 5.35% Since Index Inception* Inception Date 6/30/2008 Since Fund Inception* 3.18% 2.84% 5.62%

May 2013

Mutual Fund:
IQ Alpha Hedge Strategy Fund

Ticker
IQHIX NAV IQHOX NAV Index - IQHGALPH

1 Month 1.64% 1.54% 1.70%

3 Month 2.53% 2.43% 2.90%

YTD 2.63% 2.53% 3.16%

1 Year 4.88% 4.42% 6.66%

4.09%

3.84%

10/31/2007

ETFs:
IQ Hedge Multi-Strategy Tracker ETF

Ticker
QAI Share Price NAV Index- IQHGMST MCRO Share Price NAV Index- IQHGMAT QMN Share Price NAV Index- IQHGMN MNA Share Price NAV Index - IQMNAT CPI Share Price NAV Index - IQHGCPIT GRES Share Price NAV Index - IQGREST CROP Share Price NAV Index - IQSMCROT IOIL Share Price NAV Index - IQSMOILT ROOF Share Price NAV Index - IQSMREST CNDA Share Price NAV Index - IQSMCANT KROO Share Price NAV Index - IQSMAUST

1 Month 0.96% 1.18% 1.22% 0.64% 0.49% 0.60% 1.30% 1.30% 1.34% -0.70% -0.35% -0.35% 0.19% 0.23% 0.27% -5.47% -4.49% -4.60% -0.57% -0.49% -0.42% 0.31% 0.73% 0.84% 2.89% 3.05% 3.12% -5.95% -5.71% -5.71% -5.07% -4.39% -4.41%

3 Month 1.68% 1.86% 2.09% -0.41% -0.37% -0.11% 1.74% 1.70% 1.81% 1.31% 1.95% 2.14% 0.53% 0.45% 0.59% -6.35% -5.38% -5.51% 0.92% 1.34% 1.60% 4.26% 4.71% 5.12% 12.10% 12.10% 12.39% -9.83% -9.67% -9.45% -5.07% -3.96% -3.86%

YTD 2.27% 1.97% 2.27% -1.75% -1.61% -1.28% 2.55% 1.98% 2.20% 1.11% 2.98% 3.37% 0.65% 0.61% 0.76% -6.90% -4.49% -4.53% 3.05% 3.73% 4.07% 14.09% 13.28% 13.91% 21.68% 21.56% 22.04% -8.51% -8.34% -8.05% -1.85% 0.33% 0.48%

1 Year 4.00% 3.85% 4.74% 0.50% 0.36% 1.31% 4.90% -1.62% -1.42% 0.09% 0.90% 1.09% 1.56% -0.87% -0.35% 0.69% 8.44% 7.91% 8.90% 11.06% 12.09% 13.41% 39.64% 39.85% 41.18% -15.56% -15.49% -14.51% -7.15% -6.51% -5.82%

Since Fund Inception* 4.41% 4.39% 5.06% 3.03% 3.02% 3.67% 3.22% 3.10% 3.50% 0.95% 1.13% 2.33% 1.74% 1.75% 2.31% 4.88% 5.07% 6.14% 2.90% 3.00% 3.34% 0.14% 0.78% 1.79% 22.08% 23.29% 24.38% -3.23% -3.04% -2.18% -0.25% -0.03% 0.75%

Since Index Inception*

1 Year 2.72% 2.46% 3.32% -0.24% -0.13% 0.78% 3.54% 0.00% 0.16% 2.13% 1.05% 1.13% 1.60% 4.22% 3.91% 5.14% 5.72% 5.88% 6.80% 6.98% 8.81% 10.00% 38.22% 38.29% 39.57% -11.78% -11.62% -10.64% -2.78% -2.64% -1.85%

Since Fund Inception* 4.25% 4.18% 4.85% 2.93% 2.95% 3.59% 1.90% 1.78% 2.13% 1.19% 1.26% 2.49% 1.73% 1.73% 2.29% 6.74% 6.62% 7.76% 3.31% 3.37% 3.69% -0.02% 0.43% 1.42% 21.26% 22.42% 23.50% -1.34% -1.22% -0.32% 1.47% 1.46% 2.28%

Since Index Inception*

Inception Date 3/25/2009

3.27%

3.06%

IQ Hedge Macro Tracker ETF

9/15/2008 6/9/2009

4.15%

4.09%

IQ Hedge Market Neutral Tracker ETF

9/15/2008 10/4/2012

4.64%

4.41%

IQ Merger Arbitrage ETF

9/15/2008 11/17/2009

0.76%

0.84%

IQ Real Return ETF

10/31/2007 10/27/2009

1.49%

1.46%

IQ Global Resources ETF

12/31/2008 10/27/2009

1.60%

2.51%

IQ Global Agribusiness Small Cap ETF

10/31/2007 3/22/2011

10.20%

10.63%

IQ Global Oil Small Cap ETF

2/8/2010 5/5/2011

-1.37%

-1.84%

IQ US Real Estate Small Cap ETF

4/11/2011 6/14/2011

21.41%

20.42%

IQ Canada Small Cap ETF

6/6/2011 3/23/2010

2.22%

4.21%

IQ Australia Small Cap ETF

2/8/2010 3/23/2010

5.23%

6.89%

2/8/2010

*Performance greater than 1 year is annualized. There are risks associated with investing including possible loss of principal. The performance data quoted above represents past performance, which is not a guarantee of future results. Investment return and value o f the Funds shares will fluctuate so that an investors shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Fund returns reflect dividends and capital gains distributions. Fund performance current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com.

Table of Contents
Section I. II. III. Executive Summary Key Economic Data and Market Developments Asset Class Performance o IV. Table 1: Asset Class Performance Page 3 3 3 4 4 4 4 5 5 6 6 7 8 9 9 10 10 11 11 11 12 12 13 13 13 14 14 15 15 15 16 16 17 17 17 18 18 19 20

IQ Absolute Return indices o o o o o o o o o o o o o o o o o Table 2: IndexIQ Absolute Return indices Performance Chart 1: IndexIQ Absolute Return indices Cumulative Performance Chart 2: IQ Alpha Hedge Index Monthly Strategy Allocations Table 3: IQ Alpha Hedge Index Asset Allocation Chart 3: IQ Alpha Hedge Index Performance Chart 4: IQ Hedge Multi-Strategy Index Monthly Strategy Allocations Table 4: IQ Hedge Multi Strategy Index Asset Allocation Chart 5: IQ Hedge Multi Strategy Index Performance Table 5: IQ Hedge Macro Index Asset Allocation Chart 6: IQ Hedge Macro Index Performance Table 6: IQ Hedge Market Neutral Index Asset Allocation Chart 7: IQ Hedge Market Neutral Index Performance Table 7a: Additions to the IQ Merger Arbitrage Index Table 7b: Deletions from the IQ Merger Arbitrage Index Chart 8: IQ Merger Arbitrage Index Performance Chart 9: IQ Real Return Index Asset Allocation Chart 10: IQ Real Return Index Performance

V.

IQ Real Asset indices o o o o o o o o o Table 8: IndexIQ Real Asset indices Performance Chart 11: IndexIQ Real Asset indices Cumulative Performances Chart 12: IQ Global Resources Index Monthly Allocation Chart 13: IQ Global Resources Index Performance Table 9: Sector Weights, Returns, and Contributions: IQ Agribusiness Small Cap Index Table 10: Sector Weights, Returns, and Contributions : IQ Global Oil Small Cap Index Table 11: Sector Weights, Returns, and Contributions : IQ U.S. Real Estate Small Cap Index Chart 14: Valuation Chart: Real Asset indices Chart 15: Performance: Real Asset indices

VI.

IQ International indices o o o o o Table 12: IndexIQ International indices Performance Chart 16: Index IQ International indices Cumulative Performance Table 13: IQ Australia Small Cap Index & IQ Canada Small Cap Index Chart 17: Valuation Chart: International indices Chart 18: Performance: International indices

About IndexIQ

Page 2

I.

Executive Summary:

Our thoughts and prayers go out to those affected by the Boston Marathon tragedy. Also, our gratitude goes out to the first responders and law enforcement personnel that performed so admirably. U.S. Equity markets continued to power ahead although it was far from a smooth ride. They got caught up in a mid-month global asset sell off that was triggered by reports of Cypress liquidating gold holdings as well as China first quarter GDP coming in below expectations. International markets moved higher as did emerging markets. Macro economic data was a bit disappointing as job creation slowed in March. First quarter GDP was positive at 2.5% but was below the consensus estimate of 3.0%. The big bright spot was housing as the housing starts topped 1MM and there was a continued resurgence in home prices. The Case-Schiller Index is up 9.3% for the 12 months ending February, 2013. Headline inflation moderated as energy prices receded and the consumer confidence index recovered from the prior months drop. The yield curve flattened as the yield on the 10 year U.S. Treasury Bond dropped back to 1.68% on economic growth concerns. Commodities, broadly, were negative as gold prices suffered their worst drop in over 30 years. Copper, aluminum, silver and oil were also off but natural gas was the lone bright spot continuing its strong price recovery. Hedge funds posted mostly positive returns as the broad index was up for the month. The absolute return strategies, broadly, were positive as were the directional strategies. All of the strategies had positive returns. Convertible Arbitrage led the way rising by over 2% for the month. Event Driven strategies including Merger Arbitrage and Distressed Securities were up nearly 1% each. The remaining strategies all returned near 0.50% for the month.

II.

Key Economic Data and Market Developments:


The U.S. Bureau of Economic Analysis (BEA) announced that the advanced estimate of real gross domestic product (GDP) grew by a 2.5% annual rate in the first quarter of 2013 from the fourth quarter of 2012. Real GDP grew by 0.4% in the fourth quarter of 2012, 3.1% in the third quarter, 1.3% in the second quarter and 2.0% in the first quarter. Headline inflation dropped as the U.S. Consumer Price Index for All Urban Consumers seasonally adjusted (CPI-U SA) fell by -0.2% in March. This decrease was largely driven by moderating gasoline prices. Core inflation (CPI-Ex Food and Energy) was up a modest 0.1% after rising by 0.2% in February. For the 12 months ending March 2013, the CPI-U NSA was up by 1.50% while the CPI-Ex Food and Energy rose by 1.9%. The U.S. Bureau of Labor Statistics (U.S. BLS) announced that non-farm jobs increased by 88,000 in February after adding a revised 268,000 jobs in February. Private sector payroll employment added 95,000 jobs following a revised increase of 254,000 jobs in February. The unemployment rate dropped to 7.6%. The U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau issued a joint release that sales of new single-family houses were at a seasonally adjusted annual rate (SAAR) of 417,000, up 1.5%. Existing home sales were down -0.6% to 4.92 million units. Separately, the U.S. Department of Commerce announced that housing starts were at a seasonally adjusted annual rate (SAAR) of 1.04MM, up 7.0%. Building permits were down -3.9% to a SAAR of 902,000. The Case-Schiller Home Price Index rose by 1.2% in February and was up 9.3% for the 12 months ending February, 2013. The Conference Board Consumer Confidence Index TM rose to 68.1 from a revised 61.9.

III.

Asset Class Performance: 1

U.S. large cap equities (SPY) were up by 1.92% with small caps (IWM) falling by -0.35%. Developed international markets were up (EFA: 5.02%) as were emerging markets (VWO: 2.02%). Commodities (DJP: -2.83%) broadly were down. Oil futures (Bloomberg: CL1 <Commodities>) fell by -3.88% but natural gas futures (Bloomberg: NG1 <Commodities>) were up by 7.27%. Within precious metals, gold (Bloomberg: GOLDS <Commodities>) fell by -7.93% and silver (Bloomberg: SILV <Commodities>) fell by -15.04%. Industrial metals futures were down as Copper futures (Bloomberg: LMCAHDY <Commodities>) lost -6.50% and Aluminum futures (Bloomberg: LMAHDY <Commodities>) fell by -2.29%. The Euro gained ground vs. the U.S. Dollar (FXE: 2.71%) but the Yen lost ground (FXY: -3.45%). Broad based bonds (BND: 1.02%) were up. Longer duration U.S. government bonds (IEF) gained 1.52%. Shorter duration bonds (SHV: 0.02%) were flat. High yield bonds (HYG: 2.12%) were up as were investment grade corporate bonds (CFT: 1.87%). Real Estate internationally was up (RWX: 7.21%) as were U.S. REITS (RWR: 6.78%). The performance of the major asset class ETFs1 is detailed in Table 1. 1 ETFs are used as proxies for the applicable asset classes. Page 3

Table 1: Asset Class Performance

Through 4/30/2013 1 Month 3 Months YTD Last 12 Months

SPDR S&P 500 ETF 1.92% 7.14% 12.63% 16.70%

iShares MSCI EAFE Index Fund 5.02% 5.02% 8.93% 19.27%

Vanguard iShares iBoxx iShares iShares Barclays iPath FTSE iShares Russell Vanguard Total iShares $ High Yield Barclays Short Barclays 7-10 DJ UBS Emerging 2000 Index Bond Market Barclays Credit Corporate Treasury Bond Year Treasury Commodity TR Markets ETF Fund ETF Bond Fund Bond Fund Fund Bond Fund ETN 2.02% -0.35% 1.02% 1.87% 2.12% 0.02% 1.52% -2.83% -1.66% 5.34% 1.64% 2.70% 3.97% 0.02% 2.97% -6.69% -1.59% 11.92% 0.94% 1.90% 4.32% -0.01% 1.64% -4.55% 5.33% 17.86% 3.54% 7.20% 12.25% 0.06% 4.70% -6.29%

SPDR Dow Jones REIT ETF 6.78% 10.42% 14.20% 17.05%

PowerShares DB US Dollar Bullish Fund -1.77% 2.68% 1.79% 1.79%

Past performance is not a guarantee of future results.

IV.

IQ Absolute Return indices

The performance of the IndexIQ Absolute Return indices is detailed in Table 2. Table 2: IndexIQ Absolute Return indices Performance
IQ Alpha Hedge Index 1.70% 2.90% 3.16% 6.66% IQ Hedge MultiStrategy Index 1.22% 2.09% 2.27% 4.74% IQ Hedge Macro IQ Hedge Index SMA Index 0.60% 1.31% -0.11% 2.20% -1.28% 2.60% 1.31% 4.72% IQ Hedge Market Neutral Index 1.34% 1.81% 2.20% 4.90% IQ Merger Arbitrage Index -0.35% 2.14% 3.37% 0.09% IQ Real Return Index 0.27% 0.59% 0.76% 1.56% Barclays US Aggregate 1.01% 1.60% 0.89% 3.68% HFRX Global Index 0.62% 1.78% 3.77% 4.02%

Through 4/30/2013 1 Month 3 Months YTD Last 12 Months

S&P 500 1.93% 7.19% 12.74% 16.89%

Past performance is not a guarantee of future results. The cumulative index performance for the prior month for the IndexIQ Absolute Return indices is displayed in Chart 1. Chart 1: IndexIQ Absolute Return indices Cumulative Performance
Cumulative Performance - April 2013 3.0% 2.0%
Cumlative Return

1.0% 0.0% -1.0% -2.0%


03 /28 /20 13 04 /1/ 20 13 04 /2/ 20 13 04 /3/ 20 13 04 /4/ 20 13 04 /5/ 20 13 04 /8/ 20 13 04 /9/ 20 13 04 /10 /20 13 04 /11 /20 13 04 /12 /20 13 04 /15 /20 13 04 /16 /20 13 04 /17 /20 13 04 /18 /20 13 04 /19 /20 13 04 /22 /20 13 04 /23 /20 13 04 /24 /20 13 04 /25 /20 13 04 /26 /20 13 04 /29 /20 13 04 /30 /20 13

IQ Alpha Hedge Index IQ Hedge Market Neutral Index S&P 500

IQ Hedge Multi-Strategy Index IQ Merger Arbitrage Index Barclays US Aggregate

IQ Hedge Macro Index IQ Real Return Index HFRX Global Index

Data as of April 30, 2013. Source: Factset, Bloomberg, IndexIQ research. Past performance is not a guarantee of future results.

IQ Alpha Hedge Index (IQHGALPH)


Allocation The IQ Hedge Emerging Markets Beta Index allocation remained at its maximum short position of -16.67%. The short allocation to the IQ Hedge Global Macro Beta Index was reduced by 2.78% to -13.89%. The IQ Hedge Market Neutral Beta Index allocation was reduced by 2.78% to 30.56%. The IQ Hedge Fixed Income Arbitrage Beta Index, the IQ Hedge Long/Short Equity Beta Index, and the IQ Hedge Event-Driven Beta Index each remained at their maximum long weights of 33.33%. Strategy allocations are contained in Chart 2.

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Chart 2: IQ Alpha Hedge Index Monthly Strategy Allocations

% Allocation to the IQ Beta Indices

40% 30% 20% 10% 0% -10% -20% IQ Hedge Emerging Markets Beta Index IQ Hedge IQ Hedge Market IQ Hedge Event- IQ Hedge Fixed IQ Hedge Global Long/Short Beta Neutral Beta Driven Beta Index Income Arbitrage Macro Beta Index Index Index Beta Index Allocations for the month of:
Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13

The asset allocation is in Table 3.

Table 3: IQ Alpha Hedge Index Asset Allocation Asset Class Group Bonds Investment Grade Corporate Bond High Yield Corporate Bond Convertible Bonds Floating Rate U.S. Short Term Treasury Bond Aggregate Bond International Bond Treasury Inflation Protected Securities Commodities Broad Gold Silver Currencies Canadian Dollar Euro Emerging Markets Japanese Yen Currency Strategy Equity U.S. Small Cap Equity U.S. Large Cap Equity International Equity International Small Cap Equity Emerging Equity Emerging Small Cap Equity Real Estate U.S. REITS International REITS Volatility Total

Apr-13 96.46% 17.05% 0.46% 11.12% 2.64% 17.72% 39.29% 2.47% 5.71% 0.78% 3.04% -2.38% 0.12% -4.38% 0.00% -3.85% 0.71% -1.24% -2.67% 42.38% 7.37% 16.02% 14.87% 0.00% 4.13% 0.00% -6.80% -6.88% 0.08% -0.77% 125.00%

May-13 94.02% 8.97% 1.89% 11.35% 5.04% 13.02% 39.50% 2.66% 11.60% 1.14% 2.76% -1.71% 0.09% -4.23% 0.00% -4.88% 1.98% -1.32% -3.36% 45.75% 7.10% 20.60% 14.92% 0.00% 3.12% 0.00% -7.48% -7.40% -0.08% -0.84% 125.00%

Change -2.44% -8.07% 1.43% 0.23% 2.39% -4.70% 0.21% 0.19% 5.89% 0.37% -0.28% 0.67% -0.03% 0.15% 0.00% -1.03% 1.27% -0.08% -0.70% 3.36% -0.26% 4.59% 0.05% 0.00% -1.01% 0.00% -0.68% -0.52% -0.16% -0.06% 0.00%

Performance The weights and contribution to the prior months performance by asset type is in Chart 3.

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Chart 3: IQ Alpha Hedge Index Performance


5.00% 4.00%
Contribution to Total Return

50% 40% 30% 20% 10% 0% -10%

3.00% 2.00% 1.00% 0.00% -1.00%

International REITS

Emerging Markets

U.S. Small Cap Equity

International Equity

U.S. Large Cap Equity

International Bond

Broad Commodity

Investment Grade Corporate Bond

Emerging Equity

Aggregate Bond

Medium Term Volatility

G10 Currency Harvest

Convertible Bonds

Floating Rate

U.S. Short Term Treasury Bond

High Yield Corporate Bond

Contribution to Total Return (LHS)

Treasury Inflation Protected Securities

Avg Weight (RHS)

IQ Hedge Multi-Strategy Index (IQHGMS)


Allocation The IQ Hedge Emerging Markets Beta Index allocation remained at its maximum short position of -16.67%. The short allocation to the IQ Hedge Global Macro Beta Index was reduced by 2.78% to -13.89%. The IQ Hedge Market Neutral Beta Index allocation was reduced by 2.78% to 30.56%. The IQ Hedge Fixed Income Arbitrage Beta Index, the IQ Hedge Long/Short Equity Beta Index, and the IQ Hedge Event-Driven Beta Index each remained at their maximum long weights of 33.33%. Strategy allocations are contained in Chart 4. Chart 4: IQ Hedge Multi-Strategy Index Monthly Strategy Allocations

40%
% Allocation to the IQ Beta Indices

30% 20% 10% 0% -10% -20% IQ Hedge IQ Hedge IQ Hedge IQ Hedge Emerging Long/Short Beta Market Neutral Event-Driven Markets Beta Index Beta Index Beta Index Index Allocations for the month of:
Dec-12 Jan-13 Feb-13 Mar-13
The asset allocation is in Table 4.

Canadian Dollar

IQ Hedge Fixed IQ Hedge Income Global Macro Arbitrage Beta Beta Index Index
Apr-13 May-13

Page 6

U.S. REITS

Silver

Gold

Total

Euro

Yen

Avg Weight

Table 4: IQ Hedge Multi Strategy Index Asset Allocation Asset Class Group Bonds Investment Grade Corporate Bond High Yield Corporate Bond Convertible Bonds Floating Rate U.S. Short Term Treasury Bond Aggregate Bond International Bond Treasury Inflation Protected Securities Commodities Broad Gold Silver Commodities (Short) Broad (Short) Gold (Short) Silver (Short) Currencies Canadian Dollar Euro Emerging Markets Japanese Yen Currencies (Short) Euro (Short) Japanese Yen (Short) Currency Strategy Equity U.S. Small Cap Equity U.S. Large Cap Equity International Equity International Small Cap Equity Emerging Equity Emerging Small Cap Equity Equity (Short) U.S. Small Cap Equity (Short) U.S. Large Cap Equity (Short) International Equity (Short) Emerging Equity (Short) Real Estate U.S. REITS International REITS Real Estate (Short) U.S. REITs (Short) Volatility Volatility (Short) Total

Apr-13 63.56% 11.28% 0.30% 7.36% 1.75% 11.43% 26.01% 1.64% 3.78% 2.00% 1.92% 0.00% 0.08% 0.75% 0.00% 0.75% 0.00% 0.47% 0.00% 0.00% 0.47% 0.00% 1.61% 1.22% 0.39% 0.84% 28.06% 4.88% 10.60% 9.85% 0.00% 2.73% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.05% 0.00% 0.05% 2.17% 2.17% 0.00% 0.49% 100.00%

May-13 60.89% 5.84% 1.23% 7.39% 3.28% 8.14% 25.72% 1.73% 7.55% 1.76% 1.70% 0.00% 0.06% 0.53% 0.00% 0.53% 0.00% 1.29% 0.00% 0.00% 1.29% 0.00% 1.92% 1.51% 0.41% 1.04% 29.79% 4.62% 13.42% 9.72% 0.00% 2.03% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.28% 2.28% 0.00% 0.52% 100.00%

Change -2.67% -5.44% 0.93% 0.03% 1.53% -3.29% -0.29% 0.10% 3.77% -0.24% -0.22% 0.00% -0.02% -0.23% 0.00% -0.23% 0.00% 0.82% 0.00% 0.00% 0.82% 0.00% 0.31% 0.29% 0.02% 0.20% 1.73% -0.25% 2.81% -0.13% 0.00% -0.70% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% -0.05% 0.00% -0.05% 0.11% 0.11% 0.00% 0.03% 0.00%

Page 7

Performance The weights and contribution to the prior months performance by asset type is in Chart 5. Chart 5: IQ Hedge Multi Strategy Index Performance
3.00% 2.50% 30% 25% 20%

Contribution to Total Return

2.00% 1.50% 1.00% 0.50% 0.00%


International Equity Emerging Equity Aggregate Bond International REITS International Bond Convertible Bonds Broad Commodity U.S. Large Cap Equity Investment Grade Corporate Bond Emerging Markets High Yield Corporate Bond G10 Currency Harvest Floating Rate Gold (Short) Yen (Short) Euro (Short) Real Estate (Short) U.S. Short Term Treasury Bond Silver Medium Term Vol (Short) U.S. Small Cap Equity Total

10% 5% 0% -5%

-0.50%

Contribution to Total Return (LHS)

Avg Weight (RHS)

IQ Hedge Macro Index (IQHGMA)


Allocation The allocation to the IQ Hedge Global Macro Beta Index remained at 25%, the minimum allocation allowed by index rules. Conversely, the IQ Hedge Emerging Markets Beta Index allocation remained at 75%, the maximum allocation allowed by index rules. The asset allocation is in Table 5.

Page 8

Treasury Inflation Protected Securities

Avg Weight

15%

Table 5: IQ Hedge Macro Index Asset Allocation


Asset Class Bonds Group Investment Grade Corporate Bond High Yield Corporate Bond Convertible Bonds Floating Rate U.S. Short Term Treasury Bond Aggregate Bond International Bond Treasury Inflation Protected Securities Commodities Broad Gold Silver Commodities (Short) Broad (Short) Gold (Short) Silver (Short) Currencies Canadian Dollar Euro Emerging Markets Japanese Yen Currencies (Short) Euro (Short) Japanese Yen (Short) Currency Strategy Equity U.S. Small Cap Equity U.S. Large Cap Equity International Equity International Small Cap Equity Emerging Equity Emerging Small Cap Equity Equity (Short) U.S. Small Cap Equity (Short) U.S. Large Cap Equity (Short) International Equity (Short) Emerging Equity (Short) Real Estate U.S. REITS International REITS Real Estate (Short) U.S. REITs (Short) Volatility Volatility (Short) Total Apr-13 66.86% 16.13% 0.00% 0.00% 0.00% 36.54% 0.00% 14.19% 0.00% 5.69% 2.91% 2.78% 0.00% 0.06% 0.00% 0.00% 0.06% 6.46% 0.00% 5.27% 0.00% 1.20% 0.00% 0.00% 0.00% 3.07% 16.96% 6.72% 0.00% 0.00% 0.00% 2.95% 7.28% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.90% 0.00% 100.00% May-13 66.73% 14.61% 0.00% 0.00% 0.00% 35.19% 0.00% 16.93% 0.00% 4.34% 2.08% 2.26% 0.00% 0.05% 0.00% 0.00% 0.05% 7.57% 0.00% 6.17% 0.00% 1.40% 0.00% 0.00% 0.00% 2.81% 17.11% 6.52% 0.00% 0.00% 0.00% 3.69% 6.90% 0.00% 0.00% 0.00% 0.00% 0.00% 0.28% 0.00% 0.28% 0.00% 0.00% 1.11% 0.00% 100.00% Change -0.13% -1.52% 0.00% 0.00% 0.00% -1.35% 0.00% 2.75% 0.00% -1.35% -0.83% -0.52% 0.00% -0.01% 0.00% 0.00% -0.01% 1.10% 0.00% 0.90% 0.00% 0.20% 0.00% 0.00% 0.00% -0.27% 0.16% -0.20% 0.00% 0.00% 0.00% 0.74% -0.38% 0.00% 0.00% 0.00% 0.00% 0.00% 0.28% 0.00% 0.28% 0.00% 0.00% 0.21% 0.00% 0.00%

Performance The weights and contribution to the prior months p erformance by asset type is in Chart 6. Chart 6: IQ Hedge Macro Index Performance
4.00% 40%

3.00%

30%

Contribution to Total Return

1.00%

10%

0.00%

0%

-1.00%
International Bond Emerging Small Cap Equity Broad Commodity Investment Grade Corporate Bond Emerging Equity G10 Currency Harvest Silver (Short) U.S. Short Term Treasury Bond Canadian Dollar Medium Term Volatility Euro Yen U.S. Small Cap Equity Total Gold

-10%

Contribution to Total Return (LHS)

Avg Weight (RHS)

Page 9

Avg Weight

2.00%

20%

IQ Hedge Market Neutral Index (IQHGMN)


Allocation The allocation to the IQ Hedge Market Neutral Beta Index remained at 75%. Conversely, the IQ Hedge Fixed Income Arbitrage Beta Index allocation remained at 25%. The asset allocation is in Table 6. Table 6: IQ Hedge Market Neutral Index Asset Allocation
Asset Class Bonds Group Investment Grade Corporate Bond High Yield Corporate Bond Convertible Bonds Floating Rate U.S. Short Term Treasury Bond Aggregate Bond International Bond Treasury Inflation Protected Securities Commodities Broad Gold Silver Commodities (Short) Broad (Short) Gold (Short) Silver (Short) Currencies Canadian Dollar Euro Emerging Markets Japanese Yen Currencies (Short) Euro (Short) Japanese Yen (Short) Currency Strategy Equity U.S. Small Cap Equity U.S. Large Cap Equity International Equity International Small Cap Equity Emerging Equity Emerging Small Cap Equity Equity (Short) U.S. Small Cap Equity (Short) U.S. Large Cap Equity (Short) International Equity (Short) Emerging Equity (Short) Real Estate U.S. REITS International REITS Real Estate (Short) U.S. REITs (Short) Volatility Volatility (Short) Total Apr-13 May-13 76.70% 78.28% 0.00% 0.00% 0.25% 1.00% 6.13% 5.99% 0.00% 0.00% 45.15% 37.25% 15.71% 14.90% 0.00% 0.00% 9.46% 19.14% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.21% 0.34% 0.21% 0.34% 0.00% 0.00% 0.27% 0.18% 20.71% 19.22% 0.89% 0.38% 0.00% 0.00% 19.81% 18.85% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.11% 1.98% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.11% 1.98% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% Change 1.58% 0.00% 0.74% -0.14% 0.00% -7.89% -0.81% 0.00% 9.67% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.12% 0.12% 0.00% -0.09% -1.48% -0.52% 0.00% -0.97% 0.00% 0.00% 0.00% -0.13% 0.00% 0.00% 0.00% -0.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Performance The weights and contribution to the prior months performance by asset type is in Chart 7. Chart 7: IQ Hedge Market Neutral Index Performance
5.00% 4.00% 50% 40% 30% 20% 10% 0% -10%
International Equity Convertible Bonds Treasury Inflation Protected Securities Emerging Equity (Short) Aggregate Bond High Yield Corporate Bond G10 Currency Harvest U.S. Short Term Treasury Bond U.S. Small Cap Equity (Short) U.S. Small Cap Equity Euro (Short) Total

Contribution to Total Return

3.00% 2.00% 1.00% 0.00% -1.00%

Contribution to Total Return (LHS)

Avg Weight (RHS)

Page 10

Avg Weight

IQ Merger Arbitrage Index (IQMNA)


Allocation The hedge ratio based on the mix of stock and cash in the deals and the weight of the stocks in the index is 20.93%, down from 25.75% last month. The weighted average premium embedded in the index is 0.86%. Last month the premium was 1.50%. The 11 companies added to the index in the latest rebalance are listed in Table 7a. The 12 companies deleted from the index since the prior months rebalance date are listed in Table 7b. Table 7a: Additions to the IQ Merger Arbitrage Index
Target Name Buckeye Technologies Inc. Conceptus Inc. D.E MASTER BLENDERS 1753 N.V. Elan Corporation PLC Life Technologies Corp. Lufkin Industries Inc. Megane Top Co. Ltd. MPG Office Trust Inc. National Financial Partners Corp. Power-One Inc. Softchoice Corp. Acquirer Target Name Sector Koch Industries, Inc. Basic Materials Bayer AG Health Care Joh. A. Benckiser GmbH Consumer Staples Royalty Pharma, Inc. Health Care Thermo Fisher Scientific, Inc. Health Care General Electric Co. Energy Tomizawa KK (Shizuoka) Consumer Cyclicals Brookfield Office Properties, Inc. Financials Madison Dearborn Partners LLC Financials ABB Ltd. Capital Goods Birch Hill Equity Partners Management, Technology Inc. Target Country United States United States Netherlands Ireland United States United States Japan United States United States United States Canada Announce Date 04/24/2013 04/29/2013 03/28/2013 02/25/2013 04/15/2013 04/08/2013 04/15/2013 04/25/2013 04/15/2013 04/22/2013 04/22/2013 Added Date 05/03/2013 05/03/2013 05/03/2013 05/03/2013 05/03/2013 05/03/2013 05/03/2013 05/03/2013 05/03/2013 05/03/2013 05/03/2013

Table 7b: Deletions from the IQ Merger Arbitrage Index


Target Name Primaris Retail Real Estate Investment Trust Duff & Phelps Corp. Cl A SeaCube Container Leasing Ltd. Obagi Medical Products Inc. Alterra Capital Holdings Ltd. Copano Energy L.L.C. American Greetings Corp. Cl A Cymer Inc. EnergySolutions Inc. H.J. Heinz Co. Impregilo Spab Kayak Software Corp. Cl A Acquirer Name Sector Primaris Retail Real Estate Investment Trust Financials /Private Group/ Duff & Phelps Corp. /Private Group/ Financials Ontario Teachers' Pension Plan Board Financials Valeant Pharmaceuticals International, Inc. Health Care Markel Corp. Financials Kinder Morgan Energy Partners LP Utilities American Greetings Corp. /Private Group/ Consumer Staples ASML Holding NV Technology ABB Ltd. Capital Goods Berkshire Hathaway, Inc. Consumer Staples Salini Costruttori SpA Capital Goods Priceline.com, Inc. Technology Country Canada United States United States United States Bermuda United States United States United States United States United States Italy United States Announce Date 12/05/2012 12/30/2012 01/18/2013 03/20/2013 12/19/2012 01/29/2013 09/26/2012 10/17/2012 01/07/2013 02/14/2013 02/06/2013 11/08/2012 Added Date 02/05/2013 02/05/2013 02/05/2013 04/03/2013 01/04/2013 02/05/2013 10/03/2012 12/05/2012 02/05/2013 03/05/2013 03/05/2013 01/04/2013 Deal Result Completed Completed Completed Completed Completed Completed Max Age Max Age Scenario Completed Completed Min Wt

Performance Discussion Performance was mixed across the sectors. In the communications sector, Sprint added 64bps while Clearwire added 10 bps. In consumer staples, GrainCorp added 35 bps. In technology, Dell detracted 48 bps. In the energy sector, Plains Exploration detracted 41bps. The equity hedge was negative in terms of performance impact. The weights and contribution to the prior months performance by sector is in Chart 8. Chart 8: IQ Merger Arbitrage Index Performance
2.00% 1.50%
Contribution to Total Return

20% 15% 10% 5% 0% -5% -10%


Energy Consumer Cyclicals Transportation Consumer Staples Communication Services Capital Goods Health Care Technology Financials Utilities Total Miscellaneous

1.00% 0.50% 0.00% -0.50% -1.00%

Contribution to Total Return (LHS)

Avg Weight (RHS)

Note: Miscellaneous includes the equity hedge as well as any cash and cash equivalents. Page 11

Avg Weight

IQ Real Return Index (IQHGCPI)


Allocation The index allocation to medium term bonds remained at 7.5%. The allocation to long term bonds also remained at 2.5%, its maximum allowed by index rules. The sum of the medium term and long term bond allocations is at the index maximum of 10%. The allocation to short term bonds stayed at 60%, its lowest amount since index inception. The total equity position also was unchanged at 10%. The gold position and real estate positions remained at their maximum allowed weights of 10% each. The asset allocation is in Chart 9. Chart 9: IQ Real Return Index Asset Allocation

80% 70% 60% 50% 40% 30% 20% 10% 0% Equity Short Term Med Term Long Term Currency Real Estate Bonds Bonds Bonds Dec-12 Allocations for the month of: Jan-13 Feb-13 Gold Oil

Nov-12

Mar-13

Apr-13

Performance Discussion The weights and contribution to the prior months performance by asset type is in Chart 10. Chart 10: IQ Real Return Index Performance
7.00% 6.00% 5.00% 70% 60% 50% 40% 30% 20% 10% 0% -10%
Equity LT Bond MT Bond Real Estate ST Bond Total Gold

Contribution to Total Return

4.00% 3.00% 2.00% 1.00% 0.00% -1.00%

Contribution to Total Return (LHS)

Avg Weight (RHS)

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Avg Weight

V. IQ Real Asset Indices


The performance of the IndexIQ Real Asset indices is detailed in Table 8. Table 8: IndexIQ Real Asset indices Performance
IQ Global Resources Index -4.60% -5.51% -4.53% 0.69% IQ Global Agribusiness IQ Global Oil IQ US Real Small Cap Small Cap Estate Small Index Index Cap Index -0.42% 0.84% 3.12% 1.60% 5.12% 12.39% 4.07% 13.63% 22.04% 8.90% 13.41% 41.18%

Through 4/30/2013 1 Month 3 Months YTD Last 12 Months

Past performance is not a guarantee of future results. The cumulative index performance for the prior month for the IndexIQ Real Asset indices is displayed in Chart 11. Chart 11: IndexIQ Real Asset indices Cumulative Performance
4.0% 2.0% Cumulative Performance - April 2013

Cumlative Return

0.0% -2.0% -4.0% -6.0% -8.0% -10.0%

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 8 1 2 3 4 5 8 9 0 1 2 5 6 7 8 9 2 3 4 5 6 9 0 /2 /0 /0 /0 /0 /0 /0 /0 /1 /1 /1 /1 /1 /1 /1 /1 /2 /2 /2 /2 /2 /2 /3 03 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04

IQ Global Resources Index

IQ Oil Small Cap Index

IQ Agribusiness Small Cap Index

IQ Real Estate Small Cap Index

MSCI World

Data as of April 30, 2013. Source: Factset, Bloomberg, IndexIQ research. Past performance is not a guarantee of future results.

IQ Global Resources Index (IQGRES)


Allocation The allocation to the Timber sector was increased for this month based on improved momentum and valuation (Price/Book Value & Price/Sales).2 The allocation to Water decreased based on a less attractive relative Price/Sales ratio. Each of the other sectors had modest increases in their allocations. Precious Metals, Energy, Industrial Metals and Timber are the most overweight sectors. Water, Coal, Grains, Food and Fiber, and Livestock are the most underweight sectors. The sector allocation is in Chart 12. 2 As a percentage of equity.

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Chart 12: IQ Global Resources Index Monthly Allocation


25%

20%

% Sector Allocation

15%

10%

5%

0% Energy GFF Livestock Industrial Metals Precious Metals Timber Water Coal Allocations as of: 11/30/2012 12/31/2012 1/31/2013 2/28/2013 3/31/2013 4/30/2013

Performance Discussion: The Precious Metals sector was hit very hard in the month and drove the majority of the negative performance. Industrial Metals were also a large contributor to negative returns. Water and Energy sector contributed positively to performance. 5 out of 8 sectors had negative returns. Both the domestic hedge and the international hedges had negative contributions to returns. The weights and contribution to the prior months performance by sector is in Chart 13. Chart 13: IQ Global Resources Index Performance
3.00% 2.00% 30% 20% 10%

Contribution to Total Return

1.00% 0.00% -1.00% -2.00% -3.00% -4.00% -5.00%


Energy Inverse International Inverse Domestic Grains Food Fiber Livestock Industrial Metals Timber Total Precious Metals Water Coal

-10% -20% -30% -40% -50%

Contribution to Total Return (LHS)

Avg Weight (RHS)

Page 14

Avg Weight

0%

IQ Global Agribusiness Small Cap Index (IQSMAGR)


Table 9 details the sector allocations, returns and contributions as of April 30, 2013. Table 9: Sector Weights, Returns, and Contributions IQ Global Agribusiness Small Cap Index Sector Avg Wt Return Contribution Agricultural Chemicals 19.36 -3.19 -0.64 Agricultural Supplies and Logistics 14.29 4.75 0.68 Biofuels 4.41 -4.08 -0.19 Crop Production and Farming 37.50 0.85 0.34 Livestock Operations 24.44 -1.83 -0.46 Total 100.00 -0.28 -0.28

IQ Global Oil Small Cap Index (IQSMOIL)


Table 10 details the sector allocations, returns and contributions as of April 30, 2013 Table 10: Sector Weights, Returns, and Contributions IQ Global Oil Small Cap Index Sector Avg Wt Return Contribution Equipment, Services & Drilling 34.06 4.64 1.71 Exploration & Production 35.11 -3.62 -1.43 Refining & Marketing 30.83 1.93 0.56 Total 100.00 0.84 0.84

IQ U.S. Real Estate Small Cap Index (IQSMRES)


Table 11 details the sector allocations, returns and contributions as of April 30, 2013. Table 11: Sector Weights, Returns, and Contributions IQ U.S. Real Estate Small Cap Index Sector Avg Wt Return Contribution Diversified REIT 8.22 0.61 0.05 Hotel REIT 11.41 1.93 0.21 Mortgage REIT 28.70 1.16 0.32 Office REIT 19.44 3.94 0.77 Residential REIT 4.08 0.51 0.02 Retail REIT 14.07 7.19 1.01 Specialized REIT 14.08 5.26 0.75 Total 100.00 3.12 3.12

Page 15

Chart 14 contains selected characteristics for the Real Asset indices. Chart 14: Valuation Chart: Real Asset indices
40.00 35.00 30.00 25.00 20.00 16.18 15.00 11.08 10.00 5.41 5.00 0.00 Trailing P/E (excl neg EPS) Wtd Average Mkt Cap ($BB) Yield* P/BV $2.11 $3.41 $1.50 2.49 1.92 1.54 2.47 2.20 1.79 5.53 16.35 16.20 $34.57

IQ Global Resources Index

IQ Global Agribusiness Small Cap Index

IQ US Real Estate Small Cap Index

IQ Global Oil Small Cap Index

* Yield represents the estimated yield based on current index components and the prior payout history of the components. The actual index yield may be different.

Data as of April 30, 2013. Source: Factset and IndexIQ research. Chart 15 contains the last 12 months and year-to-date returns for the Real Asset indices and their respective comparison indices (as detailed in the chart footnotes) Chart 15: Performance: Real Asset indices

0.7% Last 12 Months IQ Global Resources Index (1) YTD -5.4% -4.5% -3.9%

Last 12 Months IQ Global Agribusiness Small Cap Index (2) YTD 4.1% 6.1%

8.9% 8.4%

41.2% Last 12 Months IQ US Real Estate Small Cap Index (3) YTD 15.1% 22.0% 13.4%

Last 12 Months -10.9% IQ Global Oil Small Cap Index (4) YTD 1.8% -20.00% -10.00% 0.00% IQ Index-Last 12 Months IQ Index-YTD (1) DJUBS Total Return Index (2) DAX Global Agribusiness Index 10.00%

13.4% 13.6%

20.00% Comparative Index-Last 12 Months Comparative Index-YTD

30.00%

40.00%

50.00%

(3) DJ US Real Estate Index

(4) WTI Spot Oil

Data as of April 30, 2013. Source: Factset and IndexIQ research. Past performance is not a guarantee of future results.

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VI. IQ International Indices


The performance of the IndexIQ International indices is detailed in Table 12. Table 12: IndexIQ International indices Performance

Through 4/30/2013 1 Month 3 Months YTD Last 12 Months

IQ Australia IQ Canada Small Small Cap Index Cap Index -4.41% -5.72% -3.86% -9.45% 0.48% -8.05% -5.82% -14.51%

MSCI AC World 2.95% 4.89% 9.75% 15.69%

Past performance is not a guarantee of future results. The cumulative index performance for the prior month for the IndexIQ International indices is displayed in Chart 16. Chart 16: IndexIQ International indices Cumulative Performance
Cumulative Performance -April 2013
4.0% 2.0% 0.0% -2.0% -4.0%

Cumlative Return

-6.0% -8.0% -10.0% -12.0% -14.0% -16.0%


01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 01 3 /2 /2 9 04 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /3 0 01 3

/2 8

/0 1

/0 2

/0 3

/0 4

/0 5

/0 8

/0 9

/1 0

/1 1

/1 2

/1 5

/1 6

/1 7

/1 8

/1 9

/2 2

/2 3

/2 4

/2 5 04

03

04

04

04

04

04

04

04

04

04

04

04

04

04

04

04

04

04

04

04

/2 6

IQ Australia Small Cap

IQ Canada Small Cap

MSCI AC World

Data as of April 30, 2013. Source: Factset, Bloomberg, IndexIQ research. Past performance is not a guarantee of future results.

Page 17

04

Table 13 details the sector allocations, returns and contributions as of April 30, 2013.

Table 13: IQ Australia Small Cap Index (IQSMAUS) & IQ Canada Small Cap Index (IQSMCAN) IQ Australia Small Cap IQ Canada Small Cap Sector Avg Wt Return Contribution Avg Wt Return Contribution Basic Materials 24.36 -15.71 -4.19 38.62 -14.23 -5.95 Capital Goods 15.91 -9.45 -1.57 9.66 2.70 0.27 Communication Services 1.86 14.95 0.26 2.22 -0.04 0.00 Consumer Cyclicals 26.17 3.90 1.10 1.34 -5.14 -0.07 Consumer Staples 7.99 2.96 0.23 2.99 8.74 0.27 Energy 7.85 -9.65 -0.82 27.50 -1.31 -0.34 Financials 7.20 4.26 0.30 5.68 1.25 0.07 Health Care 5.23 2.16 0.11 0.72 7.54 0.05 Technology 0.96 11.19 0.10 0.49 -2.43 -0.01 Transportation 1.48 4.53 0.07 5.76 -2.25 -0.16 Utilities 0.99 -0.90 0.00 5.01 2.35 0.13 Total 100.00 -4.41 -4.41 100.00 -5.72 -5.72 Data as of April 30, 2013. Source: Factset, Bloomberg, IndexIQ research. Past performance is not a guarantee of future results.

Chart 17 contains selected characteristics for the International indices. Chart 17: Valuation Chart: International indices
18.00

16.00 14.00

14.97

15.36

12.00

10.00 8.00

6.00

4.00 2.00 $1.58 $1.71

3.33 2.14

3.12 2.20

0.00 Trailing P/E (excl neg EPS) Wtd Average Mkt Cap ($BB) IQ Australia Small Cap Index Yield* IQ Canada Small Cap Index P/BV

* Yield represents the estimated yield based on current index components and the prior payout history of the components. The actual index yield may be different.

Data as of April 30, 2013. Source: Factset and IndexIQ research.

Page 18

Chart 18 contains the last 12 months and year-to-date returns for the International indices and their respective comparison indices (as detailed in the chart footnotes). Chart 18: Performance: International indices

-5.8% Last 12 Months IQ Australia Small Cap Index (1) YTD 0.5% 14.2% 25.7%

-14.5% Last 12 Months IQ Canada Small Cap Index (1) YTD -8.0% -0.4% 2.2%

-20.00%

-15.00%

-10.00%

-5.00% IQ Index-Last 12 Months IQ Index-YTD

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Comparative Index-Last 12 Months Comparative Index-YTD

(1) MSCI Large Cap Index (total return, USD, gross dividends)

Data as of April 30, 2013. Source: Factset and IndexIQ research.

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About IndexIQ IndexIQ is a leading issuer of index-based liquid alternative solutions focused on absolute return, real asset and international strategies. IndexIQ solutions are offered as ETFs, Mutual Funds & Separate Accounts. IndexIQs ph ilosophy is to democratize investment management by making innovative alternative investment strategies available to investors in low cost, liquid and transparent products.* IndexIQ strategies are marketed through the companys proprietary investment produ cts and select partnerships with leading global financial institutions. Additional information about the company and its products can be found at www.IndexIQ.com. *Ordinary brokerage commissions apply. IndexIQs ETF holdings are available daily on IndexIQs website. ETFs are liquid in that they are exchange-traded. The performance data quoted above represents past performance. Past performance is not a guarantee of future results. Performance may be lower or higher than performance data quoted. Index performance is for illustrative purposes only and does not represent any actual fund performance. One cannot invest directly in an index. Performance data for the indexes assumes reinvestment of dividends and is net of the management fees for the indexes components, as applicable, but it does not reflect management fees, transaction costs or o ther expenses that you would pay if you invested in a fund directly. Results prior to an index component's existence as an ETF are based on its underlying index, which do not reflect underlying management fees. IQ Alpha Hedge Index seeks to provide superior returns and lower volatility relative to the S&P 500 Index, and also seeks to provide correlation that is similar to the correlation between hedge funds generally and the S&P 500 Index. The IQ Hedge Multi-Strategy Index seeks to replicate the risk-adjusted return characteristics of hedge funds using various hedge fund investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging markets. The IQ Hedge Macro Index seeks to replicate the risk-adjusted return characteristics of a combination of hedge funds pursuing a macro strategy and hedge funds pursuing an emerging markets strategy. The IQ Global Resource 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. The IQ Global Agribusiness Small Cap Index provides exposure to global small cap companies engaged in the agribusiness sector, including crop production and farming, livestock operations, agricultural supplies & logistics, agricultural machinery, agricultural chemicals, and biofuels. The IQ Global Oil Small Cap Index provides exposure to 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 IQ Real Return Index seeks to provide a hedge against changes in the U.S. inflation rate by providing a real return or a return above the rate of inflation, as rep resented by the Consumer Price Index, which is published by the Bureau of Labor Statistics. The IQ Merger Arbitrage Index seeks to achieve capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer. This differentiated approach is based on a passive strategy of owning certain announced takeover targets with the goal of generating returns that are representative of global merger arbitrage activity. The Index also includes short exposure to global equities as a partial equity market hedge. The IQ Australia Small Cap Index and the IQ Canada Small Cap Index seek to achieve capital appreciation by investing in small cap companies that make up the bottom 15% of the market capitalization of Australia and Canada respectively. To receive a distribution, you must be a registered shareholder of the fund on the record date. Distributions are paid to shareholders on the payment date. There is no guarantee that capital gains distributions will not be made in the future. Your own trading will also generate tax consequences and transaction expenses. Past distributions are not indicative of future distributions. Please consult your tax professional or financial adviser for more information regarding your tax situation. Investors are reminded that all investing involves risk, including possible loss of principa l. 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. To obtain a copy of the SPDR S&P 500 ETF (SPY) prospectus which contains this and other information call 1-866-787-2257. Read the prospectus carefully before investing. The investment performance of QAI, QMN and CPI, because they are funds of funds, depends on the investment performance of the underlying ETFs in which they invests. The 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. As ROOFs 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.

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IndexIQ shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Total Returns are calculated using the daily 4:00 pm ET net asset value (NAV). Market price returns reflect the share price as of the close of trading on the exchange where Fund shares are listed. Market price returns do not represent the returns you would receive if you traded shares at other times. ALPS Distributors, Inc. (ALPS) is the distributor for IndexIQ ETFs and Mutual Fund, the SPDR S&P 500 ETF (SPY) and certain underlying fund holdings only. Salvatore Bruno is a registered representative of ALPS. Investment professional use only. Not to be disseminated to the public. IDX001222.050214

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