IndexIQ Announces Quarterly Dividend and 9.40% Annual Yield for Its Real Estate ETF (ROOF)

First-Of-Its-Kind Real Estate Exchange-Traded Fund Provides Targeted Exposure to the Real Estate Space;

Finishes 2013 as a Top Performing Real Estate ETF*

Business Wire

RYE BROOK, N.Y.--(BUSINESS WIRE)--

IndexIQ, a leading developer of liquid alternative investment solutions, announced that its IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF) declared a quarterly dividend of $0.5815 per share in late December. At that rate, the fund’s indicated annual yield, which is the most recent quarterly yield multiplied by four, is approximately 9.40 percent, while the yield for the trailing four quarters is 7.25 percent, and the 30-day SEC yield as of December 31, 2013 is 5.26 percent.

“Traditional fixed income investments faced an uncertain environment in 2013, driven by questions around the timing and impact of the Fed’s ‘tapering’ program,” said Adam Patti, CEO of IndexIQ. “Various ‘alternative’ asset classes, including the small cap REIT space, offered ways for investors to add exposure to attractive yields that were not highly correlated with the concerns circling the Fed’s Quantitative Easing program.”

ROOF finished the calendar year as a top-performing ETF in the real estate category. Since inception on June 14, 2011, ROOF has posted an annualized return of 14.25 percent, compared to 7.80 percent for the all-cap Dow Jones U.S. Real Estate Index. The fund is broadly diversified and includes exposure to mortgage REITs, office REITs, hotel REITs, specialized REITs, retail REITs and more. As of December 31, 2013, the performance of ROOF is as follows:

                   
    1 Month   3 Month   1 Year   3 Year  

Since Fund

Inception*

ROOF Share Price 1.99%   5.25%   15.53%   n/a   13.53%
ROOF NAV 2.16% 5.08% 15.14% n/a 14.25%
IQ U.S. Real Estate Small Cap Index 2.32% 5.20% 15.75% 12.07% 15.03%
Dow Jones U.S. Real Estate Index   0.99%   -0.06%   1.77%   8.67%   7.80%

*ROOF inception date is June 14, 2011. Performance greater than 1 year is annualized. The performance data quoted above represents past performance, which is not a guarantee of future results. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Current 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. ROOF’s expense ratio is 0.69%.

“We designed ROOF with an eye toward isolating the return and yield potential of the small cap REIT universe, as we believe it was an area that could serve investors well both in terms of delivering both income and return,” said Patti. “We’re very pleased with the year turned in by the fund as it continues to build a compelling long-term track record. The diversified nature of ROOF and its underlying index can help blunt the impact of a sell-off in one segment of the real estate marketplace,” continued Patti. “While small-cap REITs can also be attractive acquisition targets for larger REITs as they look to expand.”

ROOF pays dividends on a quarterly basis and has a net expense ratio of 0.69 percent. For the third year in a row, and every year since its launch, ROOF paid no capital gains to investors in 2013.

ROOF is part of an IndexIQ ETF family that includes a handful of other funds that have found an audience with investors and advisors seeking alternatives to traditional fixed income investments. For example, the firm’s flagship ETF, the IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), has more than doubled its assets under management this year, to over $600 million dollars.

“Our funds’ low volatility and low correlations with both the overall equity market and 10-year Treasuries make them an interesting option for investors who are concerned about the impact that rising rates could have on their fixed income investments,” added Patti.

In addition to ROOF, other IndexIQ funds include:

  • 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 hedge fund replication ETF;
  • IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro/Emerging Markets hedge fund replication ETF;
  • IQ Hedge Market Neutral Tracker (NYSE Arca: QMN), designed to provide Market Neutral hedge fund exposure;
  • IQ Merger Arbitrage ETF (NYSE Arca: MNA), the first merger arbitrage ETF;
  • IQ Global Resources ETF (NYSE Arca: GRES), the first hedged global natural resources ETF
  • IQ Real Return ETF (NYSE Arca: CPI), the first US-listed “real return” ETF, which seeks to generate a real return above the rate of inflation as measured by changes in the Consumer Price Index;
  • 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; and
  • IQ Australia Small Cap ETF (NYSE Arca: KROO), the first Australia small cap ETF.

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 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.** IndexIQ strategies are marketed through the company’s proprietary investment products and select partnerships with leading global financial institutions. Additional information about the company and its products can be found at www.IndexIQ.com.

*ETF Database, December 30, 2013: http://etfdb.com/etfdb-category/real-estate?search%5Bmeta_sort%5D=ytd_percent_return.desc#overview

**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.

NOTE: Shareholders should consult with their tax advisors regarding any tax consequences related to these dividends and distributions.

IRS Circular 230 disclosure: IndexIQ does not provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Shareholders or potential shareholders of the IndexIQ ETFs should obtain tax advice based on their particular circumstances.

If you have any questions concerning this information or IndexIQ ETFs in general, please call 1-888-934-0777 between 9:00 a.m. and 5:30 p.m. EST, Monday through Friday.

There are risks involved with investing including the 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 http://www.indexiq.com/docs/roof/summary_prospectus_roof.pdf or by visiting www.indexiq.com or by calling (888) 934-0777. Read the prospectus carefully before investing.

As ROOF’s investments are concentrated in the real estate sector, it is exposed to concentration risk, interest rate risk, leverage risk, property risk and management risk. The Fund is concentrated in small capitalization companies, whose stock prices generally are more volatile than those of larger companies. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund. The fund is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund's Shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk and the Fund does not represent a complete investment program.

QAI'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 any 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. 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.

IndexIQ Funds are distributed by ALPS Distributors, Inc. IDX001376.123014

Contact:
MacMillan Communications
Mike MacMillan/Chris Sullivan, 212-473-4442
chris@macmillancom.com

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