N-CSR 1 e48772_ncsr.htm ANNUAL REPORT

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 811-22227

IndexIQ ETF Trust
(Exact name of registrant as specified in charter)

800 Westchester Ave, Suite N-611
Rye Brook, NY 10573
(Address of principal executive offices) (Zip code)

Adam S. Patti

IndexIQ Advisors LLC
800 Westchester Ave, Suite N-611
Rye Brook, NY 10573
(Name and address of agent for service)

Registrant's telephone number, including area code: 1-888-934-0777

Date of fiscal year end: April 30

Date of reporting period: April 30, 2012

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.

ANNUAL REPORT | APRIL 30, 2012

IndexIQ ETF Trust

IQ Hedge Multi-Strategy Tracker ETF (QAI)
IQ Hedge Macro Tracker ETF (MCRO)
IQ Real Return ETF (CPI)
IQ Global Resources ETF (GRES)
IQ Merger Arbitrage ETF (MNA)
IQ Australia Small Cap ETF (KROO)
IQ Canada Small Cap ETF (CNDA)
IQ South Korea Small Cap ETF (SKOR)
IQ Global Agribusiness Small Cap ETF (CROP)
IQ Global Oil Small Cap ETF (IOIL)
IQ US Real Estate Small Cap ETF (ROOF)
IQ Emerging Markets Mid Cap ETF (EMER)

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 www.indexiq.com or by calling 1-888-934-0777. Read the prospectus carefully before investing.

Each of the Funds’ performance that is current to the most recent month-end is available by visiting www.indexiq.com or by calling 1-888-934-0777.

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-Q. The Funds’ Forms N-Q are available on the Commission’s web site at www.sec.gov. The Funds’ Forms N-Q also may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Each Funds’ premium/discount information is available, free of charge, on the Funds’ website, www.indexiq.com or by calling 1-888-934-0777.

The Funds are distributed by ALPS Distributors, Inc., which is not affiliated with IndexIQ or the Funds’ investment advisor.

IndexIQ^®and IQ^®are registered service marks of IndexIQ.

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 semiannual reports online.

It’s easy to enroll:

Visit https://www.icsdelivery.com/live/

Follow the simple enrollment instructions

If you have questions about IndexIQ e-Delivery services, contact a representative at 888-934-0777.

Table of Contents

Shareholder Letter		5
Management’s Discussion of Fund Performance		6
Fund Expenses		30
Portfolio Summaries		32
Schedules of Investments
IQ Hedge Multi-Strategy Tracker ETF		35
IQ Hedge Macro Tracker ETF		37
IQ Real Return ETF		39
IQ Global Resources ETF		40
IQ Merger Arbitrage ETF		43
IQ Australia Small Cap ETF		44
IQ Canada Small Cap ETF		46
IQ South Korea Small Cap ETF		48
IQ Global Agribusiness Small Cap ETF		50
IQ Global Oil Small Cap ETF		52
IQ US Real Estate Small Cap ETF		54
IQ Emerging Markets Mid Cap ETF		55
Statements of Assets and Liabilities		58
Statements of Operations		61
Statements of Changes in Net Assets		64
Financial Highlights		68
Notes to Financial Statements		72
Report of Independent Registered Public Accounting Firm		87
Supplemental Information		88
Board Review and Approval of Advisory Contracts		89
Board of Trustees and Officers		91

Shareholder Letter (unaudited)

Dear Shareholder:

For the twelve months ended April 30, 2012, there was a large divergence in performance between “risky” assets and those assets generally deemed to be “safe havens.” Leading the way on the positive side were long dated U.S. Treasury bonds that, despite a ratings downgrade by Standard and Poor’s in August, managed to attract significant investor assets looking for safety from the problems plaguing sovereign debt in peripheral Europe. The steady decline in U.S. interest rates and the commitment by the U.S. Federal Reserve to keep short term rates low into 2014 provided a tailwind for virtually all U.S. fixed income asset classes including corporate bonds, both investment grade and high yield. Also benefitting from the flight to quality trend were large cap U.S. equities, with small cap equities not doing as well. The ongoing search for yield in the very low interest environment also drove U.S. REITs higher.

Not surprisingly, non-U.S. assets did not fare as well during this time period. International equities (both developed and emerging markets) posted double digit losses as did economically sensitive commodities such as energy and industrial metals. The Euro was down sharply as debt issues in Greece dominated the headlines and caused some to question the viability of the single currency in its current form.

Investors have recognized that having a well-diversified portfolio is critical to a better long-term investment strategy. Alternative investments have historically provided investors with added diversification to their portfolios. By marrying the diversification benefits of alternative investments and the growth of exchange-traded funds (ETFs), IndexIQ is seeking to provide investors with innovative tools in a dynamic market environment.*

In order to expand its product line further and offer new and unique solutions to investors, IndexIQ launched three new funds since the end of our last fiscal year end (April 30, 2011). One such fund is the IQ Global Oil Small Cap ETF (ticker IOIL), the first ETF focused exclusively on small cap oil companies, located both in the U.S. and in other developed markets. Another example is the IQ U.S. Small Cap REIT ETF (ticker ROOF), the first ETF focused exclusively on small cap real estate companies. Finally, we launched the IQ Emerging Markets Mid Cap ETF (EMER), the first ETF focused exclusively on mid cap emerging markets companies.

We at IndexIQ call ourselves “The alternative to alternatives” because, despite the attractive features of alternative assets, for the most part, these strategies have not been available to the majority of investors in a liquid and transparent manner. We believe that our solutions bridge this gap by giving investors the alternative asset performance characteristics they are looking for, but in a more liquid and transparent (daily holdings are published) manner relative to typical alternative asset strategies.

I want to personally thank you for your interest in IndexIQ and our investment products. I invite you to visit us at www.indexiq.com or call us at (888) 934-0777 for more information on our company and our investment solutions.

Adam S. Patti
Chief Executive Officer

Registered Representative of ALPS Distributors, Inc.

Diversification does not eliminate the risk of experiencing investment loss.

Management’s Discussion of Fund Performance (unaudited)

IQ Hedge Multi-Strategy Tracker ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Hedge Multi-Strategy Index, which seeks to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of hedge funds that employ various hedge fund investment styles, which may include but are not limited to macro, long/short, event-driven, market neutral, emerging markets, fixed-income arbitrage and other strategies commonly used by hedge fund managers. The Fund implements its strategy by investing primarily in ETFs representing various asset classes. The Fund does not invest directly in hedge funds.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned 0.65% versus –4.80% and 4.76% for the HFRI Fund of Funds Composite Index and Standard & Poor’s 500^®Composite Stock Price Index (the “S&P 500 Index”), respectively.

The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in ETFs, to the corporate bond market (high yield and investment grade), the U.S. large cap equity market and certain foreign currencies. The Fund also benefitted from positions in U.S. Short Term Treasury Bonds as interest rates remained at historical lows.

The primary drivers of negative performance were the Fund’s long and short exposures to international emerging equities, short exposure to real estate, and long exposure to commodities.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Hedge Multi-Strategy Tracker ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Hedge Multi-Strategy Tracker ETF Market Price²	0.68	%	4.54	%	14.78	%
IQ Hedge Multi-Strategy Tracker ETF NAV	0.65	%	4.56	%	14.84	%
IQ Hedge Multi-Strategy Index	0.89	%	5.03	%	16.45	%
HFRI Fund of Funds Composite Index	–4.80	%	4.38	%³	14.12	%³
S&P 500 Index	4.76	%	21.12	%	81.17	%

Fund Inception Date: 3/24/2009.

The price used to calculate Market Price returns is determined by using the closing price listed on the NYSE Arca and does not represent returns an investor would receive if shares were traded at other times.

Data shown above for the HFRI Fund of Funds Composite Index is from 3/31/2009 to 4/30/2012.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (3/24/2009) to the first day of secondary market trading in shares of the Fund (3/25/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The performance data quoted above represents past performance. Past performance does not guarantee future results. The 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 Fund performance may be lower or higher than performance data quoted. Fund performance that is current to the most recent month-end is available by calling 1-888-934-0777 or by visiting www.indexiq.com. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on the Fund’s distributions or redemption of the Fund’s shares. The gross total annual operating expense ratio of the Fund was 0.75%.

Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly.

The HFRI Fund of Funds Composite Index (“HFRI FoF Composite Index”) is an equally weighted hedge fund index including over 650 domestic and off-shore funds of funds.

The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is designed to represent the equity market in general (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).

The Fund is non-diversified and may be susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The Fund is not suitable for all investors. The Fund does not invest in hedge funds.

There is no guarantee that the Fund itself, or each of the ETFs in the Fund’s portfolio, will perform exactly as their underlying indexes. The Fund’s investment performance depends on the investment performance of the underlying ETFs in which it invests. 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.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Hedge Macro Tracker ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Hedge Macro Index, which seeks to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of a combination of hedge funds pursuing a macro strategy and hedge funds pursuing an emerging markets strategy. The Fund implements its strategy by investing primarily in ETFs representing various asset classes. The Fund does not invest directly in hedge funds.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned –2.61% versus –4.80% and –4.07% for the HFRI Fund of Funds Composite Index and the MSCI World Index, respectively.

The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in ETFs, to investment grade corporate bonds, U.S. Short Term Treasury Bonds, and the Yen. The Fund also benefitted from short positions in the Euro as economic conditions throughout Europe continued to deteriorate.

The primary driver of negative performance was the Fund’s exposure to emerging markets equity.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Hedge Macro Tracker ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Hedge Macro Tracker ETF Market Price²	–2.89	%	3.93	%	11.79	%
IQ Hedge Macro Tracker ETF NAV	–2.61	%	3.96	%	11.88	%
IQ Hedge Macro Index	–2.08	%	4.30	%	12.95	%
HFRI Fund of Funds Composite Index	–4.80	%	3.10	%³	9.30	%³
MSCI World Index	–4.07	%	12.86	%	41.93	%

Fund Inception Date: 6/08/2009.

Data shown above for the HFRI Fund of Funds Composite Index is from 5/31/2009 to 4/30/2012.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (6/8/2009) to the first day of secondary market trading in shares of the Fund (6/9/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The HFRI Fund of Funds Composite Index (“HFRI FoF Composite Index”) is an equally weighted hedge fund index including over 650 domestic and off-shore funds of funds.

The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Real Return ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Real Return Index, which seeks to provide investors with 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, a leading government measure of inflation in the U.S. economy.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned 2.56% versus 0.14% for the Barclays Capital Short Term Treasury Bond Index.

The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in ETFs, to gold, long term bonds and U.S. and international equity markets. The Fund also benefitted from positions in short term bonds generally, although the continued low yields on short term U.S. Treasury bonds inhibited the performance of the Fund.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Real Return ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Real Return ETF Market Price²	2.83	%	2.09	%	5.32	%
IQ Real Return ETF NAV	2.56	%	2.02	%	5.16	%
IQ Real Return Index	3.11	%	2.61	%	6.69	%
Barclays Capital Short Term Treasury Bond Index	0.14	%	0.23	%	0.57	%

Fund Inception Date: 10/26/2009.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (10/26/2009) to the first day of secondary market trading in shares of the Fund (10/27/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The Barclays Capital U.S. Short Treasury Bond Index (the “Barclays Capital Short Term Treasury Bond Index”) measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of between 1 and 12 months.

The Fund is non-diversified and may be susceptible to greater losses if a single portfolio investment declines than would a diversified mutual fund. The Fund is not suitable for all investors.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Global Resources ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Global Resources Index, which seeks to identify investment opportunities in the global resources market segment based on momentum and valuation factors.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned –11.30% versus –4.07% and –19.42% for the MSCI World Index and the Dow Jones – UBS Commodity Index, respectively.

The principal positive contributors to Fund performance for the period, in aggregate, were the Fund’s exposures, through investments in equities, to the Grains, Food and Fiber segment and negative exposure as a market hedge to international equity markets.

The primary drivers of negative performance were the Fund’s exposure to the Industrial Metals, Timber and Coal segments.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Global Resources ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Global Resources ETF Market Price²	–11.53	%	7.27	%	19.25	%
IQ Global Resources ETF NAV	–11.30	%	7.32	%	19.40	%
IQ Global Resources Index	–10.65	%	8.39	%	22.43	%
MSCI World Index	–4.07	%	8.02	%	21.38	%
Dow Jones-UBS Commodity Index	–19.42	%	1.88	%	4.79	%

Fund Inception Date: 10/26/2009.

Management’s Discussion of Fund Performance (unaudited) (continued)

The Dow Jones-UBS Commodity Index is composed of futures contracts on physical commodities traded on U.S. exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange.

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 generally will fluctuate more widely than that of a fund which invests in a broad range of industries. 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. 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 in securities 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. The ETF should be considered a speculative investment with a high degree of risk, does not represent a complete investment program and is not suitable for all investors.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Merger Arbitrage ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Merger Arbitrage Index, which seeks to identify investment opportunities in the acquisition and merger market segment globally.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned 2.16% versus –4.07% and 4.76% for the MSCI World Index and the S&P 500 Index, respectively.

The principal positive contributors to Fund performance for the period were the Fund’s positions in Medco Health Solutions (MHS), El Paso Corp. (EP), Pharmasset (VRUS), Cove Energy PLC (COV LN) and Transatlantic Holdings (TRH).

The primary drivers of negative performance were the Fund’s positions in NYSE Euronext (NYX), MAN SE (MAN GY), and Valero Energy Corp. (VLO).

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Merger Arbitrage ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Merger Arbitrage ETF Market Price²	2.09	%	2.02	%	5.03	%
IQ Merger Arbitrage ETF NAV	2.16	%	2.19	%	5.46	%
IQ Merger Arbitrage Index	2.88	%	2.88	%	7.21	%
MSCI World Index	–4.07	%	6.80	%	17.51	%
S&P 500 Index	4.76	%	12.15	%	32.47	%

Fund Inception Date: 11/16/2009.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (11/16/2009) to the first day of secondary market trading in shares of the Fund (11/17/2009), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The MSCI World Index is a free-float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed market (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).

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 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, including currency transaction risk. Diversification does not eliminate the risk of experiencing investment losses. Stock prices of mid and small capitalization companies generally are more volatile than those of larger companies and also more vulnerable than those of larger capitalization companies to adverse economic developments.

The ETF should be considered a speculative investment with a high degree of risk, does not represent a complete investment program and is not suitable for all investors.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Australia Small Cap ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Australia Small Cap Index, which seeks to provide investors with a means of tracking the overall performance of small cap Australian companies.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned –15.08% versus –12.38% for the MSCI EAFE Index.

The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Food, Drug Retailing and Pharmaceuticals, and Biotechnology sectors. The Fund also benefitted from positions in Utilities and Services as well as Energy.

The primary driver of negative performance was the Fund’s allocation to Materials.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Australia Small Cap ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Australia Small Cap ETF Market Price²	–15.76	%	3.20	%	6.86	%
IQ Australia Small Cap ETF NAV	–15.08	%	3.20	%	6.87	%
IQ Australia Small Cap Index	–14.84	%	4.02	%	8.66	%
MSCI EAFE Index	–12.38	%	1.96	%	4.18	%

Fund Inception Date: 3/22/2010.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (3/22/2010) to the first day of secondary market trading in shares of the Fund (3/23/2010), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.

As the Fund’s investments are concentrated in Australia, the value of its shares will be affected by factors specific to Australia and may fluctuate more widely than that of a fund which invests in a more diversified manner. Any negative changes in the agricultural or mining industries could have an adverse impact on the Australian economy. The Australian economy is heavily dependent upon trading with its key partners, including the U.S., Asia and Europe. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. 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 concentrated in small capitalization companies, whose stock prices 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. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. 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.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Canada Small Cap ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Canada Small Cap Index, which seeks to provide investors with a means of tracking the overall performance of small cap Canadian companies.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned –25.24% versus –12.38% for the MSCI EAFE Index.

The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Food and Drug, Retailing and Utilities sectors. The Fund also benefitted from positions in Health Care Equipment and Services as well as Telecommunication Services.

The primary driver of negative performance was the Fund’s allocation to Materials.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Canada Small Cap ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Canada Small Cap ETF Market Price²	–25.79	%	3.23	%	6.93	%
IQ Canada Small Cap ETF NAV	–25.24	%	3.49	%	7.50	%
IQ Canada Small Cap Index	–24.76	%	4.28	%	9.24	%
MSCI EAFE Index	–12.38	%	1.96	%	4.18	%

Fund Inception Date: 3/22/2010.

Management’s Discussion of Fund Performance (unaudited) (continued)

As the Fund’s investments are concentrated in Canada, the value of its shares will be affected by factors specific to Canada and may fluctuate more widely than that of a fund which invests in a broad range of countries. Any negative changes in the agricultural or mining industries could have an adverse impact on the Canadian economy. The Canadian economy is heavily dependent upon trading with its key partners. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. 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 concentrated in small capitalization companies, whose stock prices 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. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. 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.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ South Korea Small Cap ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ South Korea Small Cap Index, which seeks to provide investors with a means of tracking the overall performance of small cap South Korean companies.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned –22.87% versus –15.33% for the MSCI Emerging Markets Index.

The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Hotel Restaurant and Leisure, Health Care Equipment and Services, and Media industries. The Fund also benefitted from positions in Commercial Services and Supplies.

The primary drivers of negative performance were the Fund’s allocations to Capital Goods and Technology Hardware and Equipment stocks.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ South Korea Small Cap ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ South Korea Small Cap ETF Market Price²	–24.18	%	–0.80	%	–1.64	%
IQ South Korea Small Cap ETF NAV	–22.87	%	–0.03	%	–0.06	%
IQ South Korea Small Cap Index	–22.39	%	1.59	%	3.28	%
MSCI Emerging Markets Index	–15.33	%	0.83	%	1.70	%

Fund Inception Date: 4/13/2010.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (4/13/2010) to the first day of secondary market trading in shares of the Fund (4/14/2010), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

As the Fund’s investments are concentrated in South Korea, the value of its shares will be affected by factors specific to South Korea and may fluctuate more widely than that of a fund which invests in a broad range of countries and in developed markets. Investments in South Korea can be impacted by several factors, including a natural disaster in South Korea, a reduction in trading activity with its key trading partners, labor-related issues (South Korea’s economic growth potential is susceptible to problems from large scale emigration, rigid labor regulations and ongoing labor relations issues, and the average age of South Korea’s workforce is rapidly increasing), and security issues, as any outbreak of hostilities between North and South Korea could have a severe adverse effect on the South Korean economy and its securities markets. 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 concentrated in small capitalization companies, whose stock prices 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. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. 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.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Global Agribusiness Small Cap ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Global Agribusiness Small Cap Index. The IQ Global Agribusiness Small Cap Index is float-adjusted market cap-weighted and includes global small cap companies engaged in the agribusiness sector, including crop production and farming, livestock operations, agricultural machinery, agricultural supplies and logistics, agricultural chemicals, and biofuels.

For the 12-month period ended April 30, 2012, the Fund (NAV) returned –8.64%.

The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Agricultural Supplies and Logistics and Agricultural Machinery sectors.

The primary drivers of negative performance were the Fund’s allocations to Crop Production and Farming and Livestock Operations stocks.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Global Agribusiness Small Cap ETF
(as of April 30, 2012)

	1 Year		Since Inception¹
	Average Annual		Average Annual		Cumulative
IQ Global Agribusiness Small Cap ETF Market Price²	–9.76	%	–1.85	%	–2.05	%
IQ Global Agribusiness Small Cap ETF NAV	–8.64	%	–1.24	%	–1.38	%
IQ Global Agribusiness Small Cap Index	–8.14	%	–1.44	%	–1.60	%

Fund Inception Date: 3/21/2011.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (3/21/2011) to the first day of secondary market trading in shares of the Fund (3/22/2011), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

As the Fund’s investments are concentrated in the Agribusiness sector, adverse weather conditions, economic forces and government policy and regulation could adversely affect the Fund’s portfolio companies and, thus, the Fund’s financial situation and performance. 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 concentrated in small capitalization companies, whose stock prices 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. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. 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.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Global Oil Small Cap ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Global Oil Small Cap Index. The IQ Global Oil Small Cap Index is float-adjusted market cap-weighted and includes global small cap companies engaged primarily in the oil sector, including exploration and production, refining and marketing, and equipment, services and drilling.

For the period since Fund (NAV) inception (May 4, 2011) through April 30, 2012, the Fund (NAV) returned –9.40%.

The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Equipment, Services and Drilling sector.

The primary drivers of negative performance were the Fund’s allocations to Exploration and Production stocks.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Global Oil Small Cap ETF
(as of April 30, 2012)

	Since Inception¹
	Cumulative
IQ Global Oil Small Cap ETF Market Price²	–9.70	%
IQ Global Oil Small Cap ETF NAV	–9.40	%
IQ Global Oil Small Cap Index	–8.66	%

Fund Inception Date: 5/4/2011.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (5/4/2011) to the first day of secondary market trading in shares of the Fund (5/5/2011), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

As the Fund’s investments are concentrated in the Oil sector, the uncertainty and risks associated with oil exploration, economic forces and government policy and regulation could adversely affect the Fund’s portfolio companies and, thus, the Fund’s financial situation and performance. 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 concentrated in small capitalization companies, whose stock prices 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. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. 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.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ US Real Estate Small Cap ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ U.S. Real Estate Small Cap Index. The IQ U.S. Real Estate Small Cap Index is float-adjusted market cap-weighted and includes U.S. small cap companies engaged primarily in the real estate sector, including Real Estate Investment Trusts (“REITs”) or real estate holding companies.

For the period since Fund (NAV) inception (June 13, 2011) through April 30, 2012, the Fund (NAV) returned 6.05% versus 13.77% for the Dow Jones U.S. Real Estate Index.

The principal positive contributors to Fund performance for the period were the Fund’s allocations to equities in the Mortgage REIT and Office and Residential REIT sectors. The Fund also benefitted from positions in Specialized REITs.

The primary driver of negative performance was the Fund’s allocation to Diversified REITs.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ US Real Estate Small Cap ETF
(as of April 30, 2012)

	Since Inception¹
	Cumulative
IQ US Real Estate Small Cap ETF Market Price²	4.24	%
IQ US Real Estate Small Cap ETF NAV	6.05	%
IQ US Real Estate Small Cap Index	6.74	%
Dow Jones U.S. Real Estate Index	13.77	%

Fund Inception Date: 6/13/2011.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (6/13/2011) to the first day of secondary market trading in shares of the Fund (6/14/2011), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The Dow Jones U.S. Real Estate Index measures the stock performance of REITs and real estate operating companies in the U.S.

As the Fund’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.

Management’s Discussion of Fund Performance (unaudited) (continued)

IQ Emerging Markets Mid Cap ETF

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the IQ Emerging Markets Mid Cap Index. The IQ Emerging Markets Mid Cap Index is a modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the mid capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in the emerging markets. The emerging markets generally include less developed markets in the Americas, Europe, Asia, and Africa/Middle East.

For the period since Fund (NAV) inception (July 12, 2011) through April 30, 2012, the Fund (NAV) returned –13.74% versus –11.39% for the MSCI Emerging Markets Index.

The principal positive contributor to Fund performance for the period was the Fund’s allocation to equities in the Utility sector.

The primary drivers of negative performance were the Fund’s allocations to Financial and Capital Goods stocks.

Hypothetical Growth of a $10,000 Investment
(Since Inception Through 4/30/2012)

This chart illustrates the performance of a hypothetical $10,000 investment made on the Fund’s inception, and is not intended to imply any future performance.

Fund Performance History

IQ Emerging Markets Mid Cap ETF
(as of April 30, 2012)

		Since Inception¹
		Cumulative
IQ Emerging Markets Mid Cap ETF Market Price²		–13.76%
IQ Emerging Markets Mid Cap ETF NAV		–13.74%
IQ Emerging Markets Mid Cap Index		–12.78%
MSCI Emerging Markets Index		–11.39%

Fund Inception Date: 7/12/2011.

Management’s Discussion of Fund Performance (unaudited) (continued)

Since the shares of the Fund did not trade in the secondary market until the day after the Fund’s commencement, for the period from commencement (7/12/2011) to the first day of secondary market trading in shares of the Fund (7/13/2011), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

As the Fund’s investments are concentrated in emerging markets, the value of its shares will be subject to a greater risk of loss than investments in developed markets. Since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets. The Fund invests in the securities of mid capitalization companies, the value of which generally are more volatile than those of larger companies. Both the Fund’s ability to track its Index and Fund returns in general may be adversely impacted by changes in currency exchange rates. The Fund is new and has limited operating history. 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 does not represent a complete investment program. The Fund is non-diversified and is susceptible to greater losses if a single portfolio investment declines than would a diversified fund.

Fund Expenses (unaudited)

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information together with the amount you invested, in a particular Fund, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid for Period 11/1/11 to 4/30/12” to estimate the expenses you paid on your account during this period. Each Fund will indirectly bear its pro rata share of the expenses incurred by the underlying ETF investments in which each Fund invests. These expenses are not included in the table.

Hypothetical Example for Comparison Purposes

The second line of the table below also provides information about hypothetical account values and hypothetical expenses based on each Funds’ actual expense ratio and an assumed annual rate of return of 5% before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The Funds will indirectly bear their pro rata share of the expenses incurred by the underlying ETF investments in which the Funds invest. These expenses are not included in the table.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Fund Expenses (unaudited) (continued)

	Beginning Account Value		Ending Account Value 4/30/12		Annualized Expense Ratios for the Period 11/1/11 to 4/30/2012			Expenses Paid for Period 11/1/11 to 4/30/2012*
IQ Hedge Multi-Strategy Tracker ETF
Actual	$	1,000.00	$	1,014.10		0.75	%	$	3.76
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.13		0.75	%	$	3.77
IQ Hedge Macro Tracker ETF
Actual	$	1,000.00	$	1,014.38		0.75	%	$	3.76
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.13		0.75	%	$	3.77
IQ Real Return ETF
Actual	$	1,000.00	$	1,012.53		0.48	%	$	2.40
Hypothetical (5% return before expenses)	$	1,000.00	$	1,022.48		0.48	%	$	2.41
IQ Global Resources ETF
Actual	$	1,000.00	$	982.99		0.75	%	$	3.70
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.13		0.75	%	$	3.77
IQ Merger Arbitrage ETF
Actual	$	1,000.00	$	1,049.19		0.75	%	$	3.82
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.13		0.75	%	$	3.77
IQ Australia Small Cap ETF
Actual	$	1,000.00	$	1,008.59		0.69	%	$	3.45
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.43		0.69	%	$	3.47
IQ Canada Small Cap ETF
Actual	$	1,000.00	$	949.35		0.69	%	$	3.34
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.43		0.69	%	$	3.47
IQ South Korea Small Cap ETF
Actual	$	1,000.00	$	841.23		0.79	%	$	3.62
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.93		0.79	%	$	3.97
IQ Global Agribusiness Small Cap ETF
Actual	$	1,000.00	$	1,053.88		0.75	%	$	3.83
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.13		0.75	%	$	3.77
IQ Global Oil Small Cap ETF¹
Actual	$	1,000.00	$	1,061.81		0.75	%	$	3.84
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.13		0.75	%	$	3.77
IQ US Real Estate Small Cap ETF²
Actual	$	1,000.00	$	1,170.63		0.69	%	$	3.72
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.43		0.69	%	$	3.47
IQ Emerging Markets Mid Cap ETF³
Actual	$	1,000.00	$	1,032.04		0.76	%	$	3.84
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.08		0.76	%	$	3.82

Expenses are calculated using the Fund’s annualized expense ratio, multiplied by the average account value for the period, multiplied by 182/366 (to reflect the six-month period).

IQ Global Oil Small Cap ETF commenced operations on May 4, 2011.

IQ US Real Estate Small Cap ETF commenced operations on June 13, 2011.

IQ Emerging Markets Mid Cap ETF commenced operations on July 12, 2011.

Portfolio Summaries (unaudited)

April 30, 2012

SCHEDULES OF INVESTMENTS SUMMARY TABLE

IQ Hedge Multi-Strategy Tracker ETF Net Assets ($ mil): $196.4
Investments	% of Net Assets
Money Market Funds		25.8	%
Corporate Bond Funds		18.8
Aggregate Bond Funds		14.8
Short-Term Treasury Bond Funds		15.6
Equity Funds		10.6
U.S. Small Cap Equity Fund		7.3
Currency Harvest Fund		6.7
High Yield Corporate Bond Funds		3.4
Real Estate Fund		2.8
Asset Allocation Fund		2.2
Commodity Funds		1.4
Total Investments		109.4
Liabilities in Excess of Other Assets		(9.4	)
Net Assets		100.0	%

IQ Hedge Macro Tracker ETF
Net Assets ($ mil): $50.5
		% of
Investments		Net Assets
Corporate Bond Funds		40.2	%
Money Market Funds		17.7
Short-Term Treasury Bond Funds		16.1
Emerging Equity Funds		14.6
International Bond Funds		7.6
Commodity Funds		5.9
Currency Harvest Fund		5.9
Asset Allocation Funds		4.7
Total Investments		112.7
Liabilities in Excess of Other Assets		(12.7	)
Net Assets		100.0	%

IQ Real Return ETF
Net Assets ($ mil): $27.5
		% of
Investments		Net Assets
Short-Term Treasury Bond Funds		69.8	%
Money Market Funds		11.8
Long-Term Bond Fund		10.4
Commodity Funds		8.3
U.S. Large Cap Equity Funds		7.0
U.S. Small Cap Equity Fund		2.8
Currency Harvest Fund		1.7
Total Investments		111.8
Liabilities in Excess of Other Assets		(11.8	)
Net Assets		100.0	%

IQ Global Resources ETF
Net Assets ($ mil): $68.0
		% of
Investments		Net Assets
Grains, Food & Fiber		20.4	%
Coal		17.1
Precious Metals		15.8
Industrial Metals		15.3
Money Market Funds		12.9
Timber		10.9
Water		3.7
Energy		3.7
Livestock		2.3
Total Investments		102.1
Liabilities in Excess of Other Assets		(2.1	)
Net Assets		100.0	%

IQ Merger Arbitrage ETF
Net Assets ($ mil): $26.0
		% of
Investments		Net Assets
Money Market Funds		22.3	%
Materials		11.0
Energy		10.9
Industrials		9.8
Information Technology		9.0
Oil, Gas & Consumable Fuels		8.4
Consumer Staples		6.0
Air Freight & Logistics		4.1
Financials		3.6
Chemicals		3.5
Diversified Telecommunication Services		2.8
Electrical Equipment		1.9
Software		1.9
Pharmaceuticals		1.7
Media		1.5
Personal Products		1.1
Multi-Utilities		1.0
Specialty Retail		0.9
Insurance		0.3
Total Investments		101.7
Liabilities in Excess of Other Assets		(1.7	)
Net Assets		100.0	%

Portfolio Summaries (unaudited) (continued)

April 30, 2012

IQ Australia Small Cap ETF
Net Assets ($ mil): $16.3
	% of
Investments	Net Assets
Materials		29.5	%
Industrials		25.9
Consumer Discretionary		16.0
Energy		10.6
Money Market Fund		9.2
Health Care		6.6
Financials		4.2
Consumer Staples		3.3
Information Technology		2.1
Utilities		1.2
Telecommunication Services		0.6
Total Investments		109.2
Liabilities in Excess of Other Assets		(9.2	)
Net Assets		100.0	%

IQ Canada Small Cap ETF
Net Assets ($ mil): $31.4
		% of
Investments		Net Assets
Materials		39.3	%
Energy		28.0
Money Market Fund		18.0
Financials		9.4
Industrials		9.4
Metals & Mining		3.0
Oil, Gas & Consumable Fuels		2.8
Consumer Discretionary		1.8
Utilities		1.8
Consumer Staples		1.5
Health Care		0.9
Information Technology		0.7
Telecommunication Services		0.7
Total Investments		117.3
Liabilities in Excess of Other Assets		(17.3	)
Net Assets		100.0	%

IQ South Korea Small Cap ETF
Net Assets ($ mil): $7.3
		% of
Investments		Net Assets
Information Technology		32.6	%
Consumer Discretionary		23.8
Materials		11.8
Financials		10.3
Industrials		9.4
Health Care		8.7
Consumer Staples		2.4
Money Market Fund		0.0	*
Total Investments		99.0
Other Assets in Excess of Liabilities		1.0
Net Assets		100.0	%

* Less than 0.05%

IQ Global Agribusiness Small Cap ETF
Net Assets ($ mil): $39.7
	% of
Investments	Net Assets
Crop Production and Farming	40.1	%
Livestock Operations	21.8
Agricultural Supplies and Logistics	12.3
Biofuels	9.4
Agricultural Chemicals	9.4
Agricultural Machinery	6.4
Money Market Funds	2.7
Total Investments	102.1
Liabilities in Excess of Other Assets	(2.1	)
Net Assets	100.0	%

IQ Global Oil Small Cap ETF
Net Assets ($ mil): $2.6
	% of
Investments	Net Assets
Refining & Marketing	35.0	%
Exploration & Production	34.6
Equipment, Services & Drilling	28.8
Money Market Funds	13.1
Total Investments	111.5
Liabilities in Excess of Other Assets	(11.5	)
Net Assets	100.0	%

Portfolio Summaries (unaudited) (continued)

April 30, 2012

IQ US Real Estate Small Cap ETF
Net Assets ($ mil): $32.7
	% of
Investments	Net Assets
Mortgage REITs		27.0	%
Office REITs		17.9
Retail REITs		14.3
Specialized REITs		14.0
Hotel REITs		12.7
Diversified REITs		8.8
Residential REITs		5.1
Money Market Funds		4.2
Total Investments		104.0
Liabilities in Excess of Other Assets		(4.0	)
Net Assets		100.0	%

IQ Emerging Markets Mid Cap ETF
Net Assets ($ mil): $1.7
		% of
Investments		Net Assets
Financials		21.0	%
Industrials		19.6
Materials		15.5
Consumer Discretionary		15.4
Information Technology		8.5
Consumer Staples		5.9
Utilities		3.5
Health Care		2.9
Transportation		1.3
Telecommunications Services		1.2
Technology		1.1
Energy		0.7
Communications		0.5
Money Market Fund		0.5
Total Investments		97.6
Other Assets in Excess of Liabilities		2.4
Net Assets		100.0	%

Schedules of Investments — IQ Hedge Multi-Strategy Tracker ETF

April 30, 2012

	Shares		Value
Investment Companies — 83.6%
Aggregate Bond Funds — 14.8%
iShares Barclays Aggregate Bond Fund		127,621	$	14,113,606
SPDR Barclays Capital Aggregate
Bond ETF^(a)		5,032		293,366
Vanguard Total Bond Market ETF		174,245		14,622,640
Total Aggregate Bond Funds				29,029,612

Asset Allocation Fund — 2.2%
CurrencyShares Japanese Yen Trust^(a)*		34,771		4,282,396

Commodity Funds — 1.4%
iShares Silver Trust*		20,452		615,810
PowerShares DB Gold Fund*		22,784		1,314,409
PowerShares DB Commodity Index
Tracking Fund*		30,241		859,147
Total Commodity Funds				2,789,366

Corporate Bond Funds — 18.8%
iShares Barclays Credit Bond Fund^(a)		18,565		2,050,318
iShares iBoxx $ Investment Grade
Corporate Bond Fund		299,118		34,841,265
Total Corporate Bond Funds				36,891,583

Currency Harvest Fund — 6.7%
PowerShares DB G10 Currency
Harvest Fund*		528,701		13,111,785

Equity Funds — 10.6%
iShares MSCI EAFE Index Fund		202,069		10,861,209
SPDR S&P 500 ETF Trust^(a)		54,874		7,669,739
Vanguard MSCI EAFE ETF		69,445		2,306,963
Total Equity Funds				20,837,911

High Yield Corporate Bond Funds — 3.4%
iShares iBoxx $ High Yield Corporate
Bond Fund		40,223		3,668,338
SPDR Barclays Capital High Yield
Bond ETF		76,085		3,022,857
Total High Yield Corporate Bond Funds				6,691,195

Real Estate Fund — 2.8%
SPDR Dow Jones International
Real Estate ETF^(a)		147,948		5,533,255

	Shares		Value
Investment Companies (continued)
Short-Term Treasury Bond Funds — 15.6%
iShares Barclays 1-3 Year Treasury
Bond Fund^(a)		173,609	$	14,663,016
iShares Barclays Short Treasury
Bond Fund		31,159		3,433,410
SPDR Barclays Capital 1-3 Month
T-Bill ETF		30,298		1,388,557
Vanguard Short-Term Bond ETF		136,544		11,086,008
Total Short-Term Treasury Bond Funds				30,570,991

U.S. Small Cap Equity Fund — 7.3%
iShares Russell 2000 Index Fund^(a)		176,502		14,372,558

Total Investment Companies — 83.6%
(Cost $161,579,025)				164,110,652

Short-Term Investment — 13.6%
Money Market Fund — 13.6%
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $26,823,554)		26,823,554		26,823,554

Investment of Cash Collateral For
Securities Loaned — 12.2%
Money Market Fund — 12.2%
BNY Mellon Overnight Government Fund
(Cost $23,898,639)		23,898,639		23,898,639

Total Investments — 109.4%
(Cost $212,301,218)			$	214,832,845
Liabilities in Excess of Other
Assets — (9.4)%^(c)				(18,417,437	)
Net Assets — 100.0%			$	196,415,408

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $23,293,149; cash collateral of $23,898,639 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

(c)

Liabilities in Excess of Other Assets includes net unrealized appreciation on swap and futures contracts.

ETF — Exchange Traded Fund

See notes to financial statements.

Schedules of Investments — IQ Hedge Multi-Strategy Tracker ETF (continued)

April 30, 2012

Open futures contracts outstanding at April 30, 2012:

Type	Broker	Expiration Date	Number of Contracts Purchased (Sold)	Value at Trade Date	Value at April 30, 2012	Unrealized Appreciation (Depreciation)
E-Mini Future Euro FX Future	Morgan Stanley	June 2012	(140)	$(11,450,119)	$(11,586,750)	$(136,631)
Mini MSCI Emerging Market Index Future	Morgan Stanley	June 2012	(161)	(8,399,397)	(8,206,170)	193,227
						$ 56,596

Cash posted as collateral to the broker for futures contracts was $1,146,600 at April 30, 2012.

Total return swap transactions outstanding at April 30, 2012:

Total Return Benchmark	Annual Financing Rate Received (Paid)			Expiration Date		Notional Amount			Unrealized Appreciation (Depreciation)
Proshares VIX Mid-Term Futures ETF		0.54	%		4/17/2014	$	712,737		$	—
iShares Dow Jones US Real Estate Index Fund		(0.71	)%		2/07/2013		(13,776,951	)		—
SPDR Barclays Capital Convertible Securities ETF		0.54	%		4/17/2014		15,215,540			—
									$	—

Cash posted as collateral to the broker for swap contracts was $5,700,515 at April 30, 2012.

Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either receives fees from, or pays fees to, the counterparty, depending upon the total return of the benchmark, and the agreed-upon financing rate.

See notes to financial statements.

Schedules of Investments — IQ Hedge Macro Tracker ETF

April 30, 2012

	Shares		Value
Investment Companies — 95.0%
Asset Allocation Funds — 4.7%
CurrencyShares Canadian Dollar Trust		2,190	$	220,467
CurrencyShares Japanese Yen Trust*		17,379		2,140,398
Total Asset Allocation Funds				2,360,865

Commodity Funds — 5.9%
iShares Silver Trust*		10,222		307,784
PowerShares DB Gold Fund*		46,552		2,685,585
Total Commodity Funds				2,993,369

Corporate Bond Funds — 40.2%
iShares Barclays Credit Bond Fund		10,219		1,128,587
iShares iBoxx $ Investment Grade
Corporate Bond Fund		164,652		19,178,665
Total Corporate Bond Funds				20,307,252

Currency Harvest Fund — 5.9%
PowerShares DB G10 Currency
Harvest Fund*		120,649		2,992,095

Emerging Equity Funds — 14.6%
iShares MSCI Emerging Markets
Index Fund		73,913		3,119,128
Vanguard MSCI Emerging
Markets ETF^(a)		100,071		4,256,020
Total Emerging Equity Funds				7,375,148

International Bond Funds — 7.6%
iShares JPMorgan USD Emerging
Markets Bond Fund^(a)		24,041		2,747,165
PowerShares Emerging Markets
Sovereign Debt Portfolio		37,633		1,072,164
Total International Bond Fund				3,819,329

Short-Term Treasury Bond Funds — 16.1%
iShares Barclays 1-3 Year Treasury
Bond Fund^(a)		46,013		3,886,258
iShares Barclays Short Treasury
Bond Fund		8,259		910,059
SPDR Barclays Capital 1-3 Month
T-Bill ETF		8,030		368,015
Vanguard Short-Term Bond ETF		36,189		2,938,185
Total Short-Term Treasury Bond Funds				8,102,517

Total Investment Companies — 95.0%
(Cost $47,071,637)				47,950,575

	Shares		Value
Short-Term Investment — 4.9%
Money Market Fund — 4.9%
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $2,470,145)		2,470,145	$	2,470,145

Investment of Cash Collateral For
Securities Loaned — 12.8%
Money Market Fund — 12.8%
BNY Mellon Overnight Government Fund
(Cost $6,488,800)		6,488,800		6,488,800

Total Investments — 112.7%
(Cost $56,030,582)			$	56,909,520
Liabilities in Excess of Other
Assets — (12.7)%^(c)				(6,433,955	)
Net Assets — 100.0%			$	50,475,565

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $6,321,194; cash collateral of $6,488,800 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

(c)

Liabilities in Excess of Other Assets includes net unrealized depreciation on swap and futures contracts.

ETF — Exchange Traded Fund

See notes to financial statements.

Schedules of Investments — IQ Hedge Macro Tracker ETF (continued)

April 30, 2012

Open futures contracts outstanding at April 30, 2012:

Type	Broker	Expiration Date	Number of Contracts Purchased (Sold)	Value at Trade Date	Value at April 30, 2012	Unrealized Appreciation (Depreciation)
DJ UBS Commodity Index Future	Morgan Stanley	June 2012	(5)	$ (70,523)	$ (70,850)	$ (327)
E-Mini Euro FX Future	Morgan Stanley	June 2012	(16)	(1,311,161)	(1,324,200)	(13,039)
Russell 2000 Index Mini Future	Morgan Stanley	June 2012	(13)	(1,063,130)	(1,059,370)	3,760
						$ (9,606)

Cash posted as collateral to the broker for futures contracts was $107,750 at April 30, 2012.

Total return swap contract outstanding at April 30, 2012:

Total Return Benchmark		Annual Financing Rate Received (Paid)		Expiration Date		Notional Amount		Unrealized Appreciation (Depreciation)
ProShares VIX Mid-Term Futures ETF		0.54%		04/17/2014		$ 1,436,169		—

See notes to financial statements.

Schedules of Investments — IQ Real Return ETF

April 30, 2012

	Shares		Value
Investment Companies — 100.0%
Commodity Funds — 8.3%
PowerShares DB Gold Fund*		28,095	$	1,620,800
PowerShares DB Oil Fund^(a)*		22,232		671,206
Total Commodity Funds				2,292,006

Currency Harvest Fund — 1.7%
CurrencyShares Euro Trust		3,439		452,951

Long-Term Bond Fund — 10.4%
iShares Barclays 20+ Year Treasury
Bond Fund^(a)		24,462		2,869,882

Short-Term Treasury Bond Funds — 69.8%
iShares Barclays Short Treasury
Bond Fund		124,159		13,681,080
SPDR Barclays Capital 1-3 Month
T-Bill ETF		120,726		5,532,873
Total Short-Term Treasury Bond Funds				19,213,953

U.S. Large Cap Equity Funds — 7.0%
iShares S&P 500 Index Fund		81		11,362
SPDR S&P 500 ETF Trust		13,767		1,924,214
Total U.S. Large Cap Equity Fund				1,935,576

U.S. Small Cap Equity Fund — 2.8%
iShares Russell 2000 Index Fund^(a)		9,599		781,646

Total Investment Companies — 100.0%
(Cost $27,402,416)			$	27,546,015

	Shares		Value
Short-Term Investment — 0.0%^(b)
Money Market Fund — 0.0%^(b)
Invesco Treasury Portfolio Cash
Management, 0.02%^(c)
(Cost $6,123)		6,123	$	6,123

Investment of Cash Collateral For
Securities Loaned — 11.8%
Money Market Fund — 11.8%
BNY Mellon Overnight Government Fund
(Cost $3,244,220)		3,244,220		3,244,220

Total Investments — 111.8%
(Cost $30,652,759)			$	30,796,358
Liabilities in Excess of Other
Assets — (11.8)%				(3,253,646	)
Net Assets — 100.0%			$	27,542,712

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $3,162,781; cash collateral of $3,244,220 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Less than 0.05%.

(c)

Rate shown represents annualized 7-day yield as of April 30, 2012.

ETF — Exchange Traded Fund

See notes to financial statements.

Schedules of Investments — IQ Global Resources ETF

April 30, 2012

	Shares		Value
Common Stocks — 89.2%
Australia — 8.8%
Aquila Resources Ltd.^(a)*		74,528	$	376,299
BHP Billiton Ltd.		66,632		2,466,005
Fortescue Metals Group Ltd.		63,550		373,135
Iluka Resources Ltd.		8,162		144,450
New Hope Corp. Ltd.^(a)		154,359		782,587
Newcrest Mining Ltd.		38,865		1,064,108
OZ Minerals Ltd.		6,597		64,077
PanAust Ltd.*		31,882		108,202
Regis Resources Ltd.*		22,355		98,211
Whitehaven Coal Ltd.^(a)		86,134		477,043
Woodside Petroleum Ltd.		907		32,973
Total Australia				5,987,090

Belgium — 0.2%
Umicore SA^(a)		2,307		125,175

Canada — 13.8%
Agnico-Eagle Mines Ltd.		8,571		342,337
Alamos Gold, Inc.		5,418		99,152
B2Gold Corp.*		17,665		66,694
Barrick Gold Corp.		49,983		2,021,682
Canadian Natural Resources Ltd.		1,255		43,597
Canfor Corp.*		33,583		367,800
Cenovus Energy, Inc.		842		30,554
Centerra Gold, Inc.		12,419		160,776
China Gold International Resources
Corp., Ltd.*		16,877		76,702
Domtar Corp. ADR		8,575		750,141
Eldorado Gold Corp.		34,587		490,124
Enbridge, Inc.		840		35,192
Goldcorp, Inc.		39,860		1,526,296
Husky Energy, Inc.		1,074		28,014
IAMGOLD Corp.		18,862		233,878
Imperial Oil Ltd.		933		43,432
Inmet Mining Corp.		1,466		80,634
Kinross Gold Corp.		58,277		522,042
New Gold, Inc.*		22,639		206,236
Pan American Silver Corp.		5,153		100,196
SEMAFO, Inc.		13,968		70,975
Silver Wheaton Corp.^(a)		17,798		543,335
Suncor Energy, Inc.		1,749		57,766
Teck Resources Ltd., Class B		11,868		442,790
TransCanada Corp.		780		34,312
Uranium One, Inc.^(a)*		21,695		63,024
West Fraser Timber Co., Ltd.		9,876		434,146
Yamana Gold, Inc.		37,398		548,506
Total Canada				9,420,333

Curacao — 0.2%
Schlumberger Ltd.		1,536		113,879

Finland — 2.3%
UPM-Kymmene Oyj		121,871		1,559,793

France — 1.1%
GDF Suez^(a)		2,457		56,552
Suez Environnement Co.		18,792		265,013
Total SA		2,748		131,191
Veolia Environnement		17,876		261,796
Total France				714,552

	Shares		Value
Common Stocks (continued)
Germany — 0.4%
Suedzucker AG		7,699	$	234,319

Hong Kong — 1.7%
China Agri-Industries Holdings Ltd.		190,676		140,591
CNOOC Ltd.		50,986		108,705
Lee & Man Paper Manufacturing Ltd.		1,142,998		536,304
Shougang Fushan Resources Group Ltd.		1,059,701		371,549
Total Hong Kong				1,157,149

Ireland — 0.5%
Kerry Group PLC, Class A		7,318		334,497

Italy — 0.1%
Eni SpA		4,366		96,907

Japan — 3.7%
Ajinomoto Co., Inc.		27,916		361,165
Hokuetsu Kishu Paper Co., Ltd.		48,536		311,233
INPEX Corp.		4		26,551
Itoham Foods, Inc.		14,689		55,743
Kurita Water Industries Ltd.		4,939		121,302
Maruha Nichiro Holdings, Inc.		30,111		52,419
Mitsubishi Materials Corp.		27,117		81,509
Mitsui & Co., Ltd.		2,040		32,039
Nippon Meat Packers, Inc.		13,491		173,189
Nippon Paper Group, Inc.^(a)		27,823		557,540
Nisshin Seifun Group, Inc.		10,783		132,078
Nissin Foods Holdings Co., Ltd.		5,107		192,204
Sumitomo Metal Mining Co., Ltd.		12,034		159,157
Toyo Suisan Kaisha Ltd.		4,707		120,851
Yamazaki Baking Co., Ltd.		9,201		136,324
Total Japan				2,513,304

Jersey — 0.7%
Randgold Resources Ltd.		5,346		470,950

Netherlands — 0.4%
Nutreco NV		2,121		154,118
Royal Dutch Shell PLC, Class A		4,089		145,420
Total Netherlands				299,538

Norway — 0.4%
Norsk Hydro ASA		42,554		206,814
Statoil ASA		3,547		94,614
Total Norway				301,428

Portugal — 0.7%
Portucel-Empresa Produtora de
Pasta e Papel SA		176,357		447,228

Singapore — 2.8%
Golden Agri-Resources Ltd.		496,344		294,846
Olam International Ltd.		104,488		191,698
Sakari Resources Ltd.		211,785		337,199
Wilmar International Ltd.		281,391		1,107,552
Total Singapore				1,931,295

Spain — 0.2%
Ebro Foods SA		6,651		117,563
Repsol YPF SA		1,349		25,800
Total Spain				143,363

See notes to financial statements.

Schedules of Investments — IQ Global Resources ETF (continued)

April 30, 2012

	Shares		Value
Common Stocks (continued)
Sweden — 5.9%
Boliden AB		5,698	$	91,191
Holmen AB, B Shares		14,954		397,018
Sandvik AB		222,709		3,527,781
Total Sweden				4,015,990

Switzerland — 1.1%
Aryzta AG*		3,948		198,781
Barry Callebaut AG*		220		211,723
Ferrexpo PLC		12,108		57,451
Lindt & Spruengli AG		38		123,924
Sulzer AG		1,247		179,291
Total Switzerland				771,170

United Kingdom — 11.2%
African Barrick Gold Ltd.		21,495		125,412
Anglo American PLC		28,675		1,102,634
Antofagasta PLC		20,930		401,389
Associated British Foods PLC		33,624		665,579
BG Group PLC		3,778		88,987
BP PLC		21,429		154,849
Centrica PLC		5,469		27,255
Eurasian Natural Resources Corp.		28,517		259,090
Hochschild Mining PLC		16,915		137,887
Kazakhmys PLC		11,085		154,983
Lonmin PLC		4,270		72,251
New World Resources PLC, Class A		50,729		335,107
Pennon Group PLC		13,334		159,362
Petropavlovsk PLC		10,309		79,818
Rio Tinto PLC		28,228		1,573,392
Severn Trent PLC		8,857		243,063
Tate & Lyle PLC		20,058		224,904
United Utilities Group PLC		25,394		255,045
Vedanta Resources PLC		6,582		130,075
Weir Group PLC		8,444		233,786
Xstrata PLC		63,867		1,221,191
Total United Kingdom				7,646,059

United States — 33.0%
AbitibiBowater, Inc.*		23,748		314,661
Alcoa, Inc.		21,619		210,353
Allied Nevada Gold Corp.*		4,334		126,943
Alpha Natural Resources, Inc.*		41,976		677,073
American Water Works Co., Inc.		6,450		220,848
Anadarko Petroleum Corp.		573		41,949
Apache Corp.		435		41,734
Aqua America, Inc.		5,081		115,389
Arch Coal, Inc.		41,921		409,149
Archer-Daniels-Midland Co.		28,679		884,174
Bunge Ltd.		6,221		401,255
Chevron Corp.		2,171		231,342
Cliffs Natural Resources, Inc.		2,784		173,332
Coeur d’Alene Mines Corp.*		4,619		99,539
ConAgra Foods, Inc.		17,944		463,314
ConocoPhillips		1,397		100,067
CONSOL Energy, Inc.		39,690		1,319,296
Corn Products International, Inc.		3,260		186,016
Devon Energy Corp.		445		31,083
El Paso Corp.		821		24,359
EOG Resources, Inc.		298		32,724
Exxon Mobil Corp.		5,063		437,139

	Shares		Value
Common Stocks (continued)
United States (continued)
Flowserve Corp.		2,012	$	231,239
Freeport-McMoRan Copper
& Gold, Inc.		19,712		754,969
General Mills, Inc.		27,592		1,073,053
Green Mountain Coffee Roasters, Inc.*		8,080		393,900
Halliburton Co.		1,031		35,281
Hershey Co.		7,010		469,740
Hormel Foods Corp.		14,994		435,726
IDEX Corp.		3,051		132,139
J.M. Smucker Co.		4,650		370,279
Joy Global, Inc.		20,085		1,421,415
Kapstone Paper And Packaging Corp.*		11,223		202,687
Kellogg Co.		15,231		770,232
Kraft Foods, Inc., Class A		77,476		3,088,968
Louisiana-Pacific Corp.*		31,128		281,709
Marathon Oil Corp.		799		23,443
McCormick & Co., Inc.		4,986		278,767
MeadWestvaco Corp.		39,252		1,248,999
National Oilwell Varco, Inc.		466		35,304
Newmont Mining Corp.		25,389		1,209,786
Occidental Petroleum Corp.		919		83,831
Peabody Energy Corp.		52,181		1,623,351
Pentair, Inc.		3,032		131,407
Ralcorp Holdings, Inc.*		2,390		174,016
Royal Gold, Inc.		2,860		177,205
Sara Lee Corp.		25,531		562,703
Seaboard Corp.*		70		139,329
Smithfield Foods, Inc.*		9,672		202,725
Tyson Foods, Inc., Class A		17,735		323,664
Total United States				22,417,606

Total Common Stocks — 89.2%
(Cost $61,724,196)				60,701,625
Short-Term Investment — 9.3%
Money Market Fund — 9.3%
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $6,319,133)		6,319,133		6,319,133

Investment of Cash Collateral For
Securities Loaned — 3.6%
Money Market Fund — 3.6%
BNY Mellon Overnight Government Fund
(Cost $2,441,356)		2,441,356		2,441,356

Total Investments — 102.1%
(Cost $70,484,685)			$	69,462,114
Liabilities in Excess of Other
Assets — (2.1)%^(c)				(1,423,611	)
Net Assets — 100.0%			$	68,038,503

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $2,320,861; cash collateral of $2,441,356 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

(c)

Liabilities in Excess of Other Assets includes net unrealized appreciation on futures contracts.

ADR — American Depository Receipt

See notes to financial statements.

Schedules of Investments — IQ Global Resources ETF (continued)

April 30, 2012

Open futures contracts outstanding at April 30, 2012:

Type	Broker	Expiration Date	Number of Contracts Purchased (Sold)	Value at Trade Date	Value at April 30, 2012	Unrealized Appreciation (Depreciation)
Mini MSCI EAFE Index Future	Morgan Stanley	June 2012	(85)	$(6,511,545)	$(6,403,050)	$108,495
E-mini S&P 500 Future	Morgan Stanley	June 2012	(95)	(6,604,670)	(6,619,600)	(14,930)
						$ 93,565

Cash posted as collateral to the broker for futures contracts was $842,500 at April 30, 2012.

See notes to financial statements.

Schedules of Investments — IQ Merger Arbitrage ETF

April 30, 2012

	Shares		Value
Common Stocks — 79.4%
Air Freight & Logistics — 4.1%
TNT Express NV^(a)		87,459	$	1,060,328

Chemicals — 3.5%
Georgia Gulf Corp.*		6,490		230,071
Solutia, Inc.		23,572		668,030
Total Chemicals				898,101

Consumer Staples — 6.0%
Viterra, Inc.		96,499		1,554,025

Diversified Telecommunication
Services — 2.8%
AboveNet, Inc.*		8,778		730,066

Electrical Equipment — 1.9%
Thomas & Betts Corp.*		6,715		482,876

Energy — 10.9%
El Paso Corp.		79,203		2,349,953
Flint Energy Services Ltd.*		13,281		334,865
NAL Energy Corp.^(a)		19,848		152,283
Total Energy				2,837,101

Financials — 3.6%
Delphi Financial Group, Inc., Class A		13,611		618,212
Harleysville Group, Inc.		5,517		330,689
Total Financials				948,901

Industrials — 9.8%
ERA Mining Machinery Ltd.*		2,048,694		232,393
Goodrich Corp.		16,514		2,071,846
Wavin NV*		18,252		253,291
Total Industrials				2,557,530

Information Technology — 9.0%
Motorola Mobility Holdings, Inc.*		38,745		1,504,081
Novellus Systems, Inc.*		17,988		840,939
Total Information Technology				2,345,020

Insurance — 0.3%
Premafin Finanziaria SpA*		258,319		77,269

Materials — 11.0%
Neo Material Technologies, Inc.*		47,339		521,810
Sundance Resources Ltd.*		643,151		314,690
Vulcan Materials Co.		10,720		458,923
Xstrata PLC		81,916		1,566,303
Total Materials				2,861,726

Media — 1.5%
Astral Media, Inc., Class A		7,947		392,705

	Shares		Value
Common Stocks (continued)
Multi-Utilities—1.0%
CH Energy Group, Inc.		2,571	$	168,709
Hastings Diversified Utilities Fund		43,985		94,786
Total Multi-Utilities				263,495

Oil, Gas & Consumable Fuels — 8.4%
Cove Energy PLC*		344,304		1,266,358
CVR Energy, Inc.*		30,260		918,694
Total Oil, Gas & Consumable Fuels				2,185,052

Personal Products — 1.1%
Prestige Brands Holdings, Inc.*		17,515		297,580

Pharmaceuticals — 1.7%
Ista Pharmaceuticals, Inc.*		48,051		434,861

Software — 1.9%
Convio, Inc.^(a)*		11,659		186,544
Quest Software, Inc.*		13,643		317,473
Total Software				504,017

Specialty Retail — 0.9%
PEP Boys-Manny Moe & Jack		15,363		229,369

Total Common Stocks — 79.4%
(Cost $19,747,881)				20,660,022

Short-Term Investment — 17.2%
Money Market Fund — 17.2%
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $4,475,828)		4,475,828		4,475,828

Investment of Cash Collateral For
Securities Loaned — 5.1%
Money Market Fund — 5.1%
BNY Mellon Overnight Government Fund
(Cost $1,333,634)		1,333,634		1,333,634

Total Investments — 101.7%
(Cost $25,557,343)			$	26,469,484
Liabilities in Excess of Other
Assets — (1.7)%^(c)				(450,597	)
Net Assets — 100.0%			$	26,018,887

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $1,266,639; cash collateral of $1,333,634 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

(c)

Liabilities in Excess of Other Assets includes net unrealized appreciation on futures contracts.

Open futures contracts outstanding at April 30, 2012:

Type	Broker	Expiration Date	Number of Contracts Purchased (Sold)	Value at Trade Date	Value at April 30, 2012	Unrealized Appreciation (Depreciation)
Mini MSCI EAFE Index Future	Morgan Stanley	June 2012	(22)	$(1,680,149)	$(1,657,260)	$22,889
E-mini S&P 500 Future	Morgan Stanley	June 2012	(25)	(1,738,711)	(1,742,000)	(3,289)
						$19,600

Cash posted as collateral to the broker for futures contracts was $219,500 at April 30, 2012.

See notes to financial statements.

Schedules of Investments — IQ Australia Small Cap ETF

April 30, 2012

	Shares		Value
Common Stocks — 100.0%
Consumer Discretionary — 16.0%
APN News & Media Ltd.		73,530	$	64,301
Aristocrat Leisure Ltd.^(a)		87,297		281,730
Billabong International Ltd.		36,385		99,999
Breville Group Ltd.		12,660		58,122
David Jones Ltd.^(a)		87,649		227,205
Flight Centre Ltd.		9,657		212,328
G.U.D. Holdings Ltd.		12,273		108,347
Invocare Ltd.		18,892		165,404
JB Hi-Fi Ltd.^(a)		17,018		171,142
Myer Holdings Ltd.		101,805		249,063
Navitas Ltd.		35,976		147,939
Pacific Brands Ltd.		163,056		104,396
Seven West Media Ltd.		66,742		205,666
Southern Cross Media Group Ltd.		98,168		137,456
Super Retail Group Ltd.		23,083		185,996
Ten Network Holdings Ltd.		105,764		89,185
Wotif.com Holdings Ltd.		20,657		95,052
Total Consumer Discretionary				2,603,331

Consumer Staples — 3.3%
Goodman Fielder Ltd.		294,046		200,506
GrainCorp Ltd.		34,719		333,611
Total Consumer Staples				534,117

Energy — 10.6%
Aurora Oil & Gas Ltd.*		70,292		303,686
AWE Ltd.		93,718		170,251
Beach Energy Ltd.		212,836		310,202
Coalspur Mines Ltd.^(a)*		75,723		131,648
Dart Energy Ltd.*		106,245		31,523
Energy Resources of Australia Ltd.^(a)*		28,650		48,020
Gloucester Coal Ltd.*		12,990		106,563
Karoon Gas Australia Ltd.*		29,745		199,731
Linc Energy Ltd.*		54,140		63,126
Paladin Energy Ltd.^(a)*		135,623		225,199
Senex Energy Ltd.*		119,361		141,036
Total Energy				1,730,985

Financials — 4.2%
Bank of Queensland Ltd.		51,186		397,522
FlexiGroup Ltd.		32,524		76,860
IOOF Holdings Ltd.		31,566		204,729
Total Financials				679,111

Health Care — 6.6%
Acrux Ltd.*		27,888		116,421
Ansell Ltd.		23,715		366,624
Mesoblast Ltd.^(a)*		27,188		213,696
Primary Health Care Ltd.		81,663		240,593
Sigma Pharmaceuticals Ltd.		201,256		139,329
Total Health Care				1,076,663

Industrials — 25.9%
Ausdrill Ltd.		42,717		182,329
Boart Longyear Ltd.		80,734		352,162
Bradken Ltd.		28,279		218,149
Cabcharge Australia Ltd.		19,286		128,497
CSR Ltd.		90,352		164,136
Downer EDI Ltd.*		72,451		272,285
Emeco Holdings Ltd.		110,509		119,647
Forge Group Ltd.		9,633		62,878

	Shares		Value
Common Stocks (continued)
Industrials (continued)
GWA Group Ltd.^(a)		43,810	$	89,621
Industrea Ltd.		62,719		63,988
Macmahon Holdings Ltd.		106,626		77,702
Mermaid Marine Australia Ltd.		37,357		124,839
Mineral Resources Ltd.		20,971		261,109
Monadelphous Group Ltd.		15,047		364,047
NRW Holdings Ltd.		43,812		186,547
SAI Global Ltd.		34,935		190,210
Seek Ltd.		57,170		426,140
Spotless Group Ltd.		45,365		120,902
Transfield Services Ltd.		81,178		192,684
Transpacific Industries Group Ltd.*		153,811		136,106
UGL Ltd.		28,662		390,288
Virgin Australia Holdings Ltd.*		229,303		95,486
Virgin Australia International
Holdings Ltd.*^(b)		229,303		—
Total Industrials				4,219,752

Information Technology — 2.1%
carsales.com Ltd.^(a)		37,336		223,495
Iress Market Technology Ltd.^(a)		17,453		122,280
Total Information Technology				345,775

Materials — 29.5%
Adelaide Brighton Ltd.		84,817		269,311
Ampella Mining Ltd.*		36,167		40,099
Aquarius Platinum Ltd.		68,909		156,388
Bathurst Resources Ltd.^(a)*		116,541		77,648
Beadell Resources Ltd.*		125,231		90,608
BlueScope Steel Ltd.		541,737		222,770
CuDeco Ltd.*		23,921		85,168
Discovery Metals Ltd.*		70,196		127,155
DuluxGroup Ltd.		62,884		202,943
Gindalbie Metals Ltd.*		138,611		85,138
Grange Resources Ltd.		64,328		40,181
Gryphon Minerals Ltd.*		58,520		57,876
Imdex Ltd.		35,792		93,898
Independence Group NL		40,708		183,925
Integra Mining Ltd.*		146,904		79,526
Intrepid Mines Ltd.*		91,087		81,551
Ivanhoe Australia Ltd.*		36,000		46,847
Kingsgate Consolidated Ltd.		25,290		163,235
Medusa Mining Ltd.		32,470		194,705
Mineral Deposits Ltd.*		15,033		94,214
Mirabela Nickel Ltd.*		73,088		37,283
Mount Gibson Iron Ltd.		112,246		129,123
Nufarm Ltd.		31,316		160,400
OneSteel Ltd.		220,345		299,354
PanAust Ltd.*		82,237		279,098
Perseus Mining Ltd.*		79,801		216,000
Ramelius Resources Ltd.*		53,126		42,586
Regis Resources Ltd.*		68,012		298,792
Resolute Mining Ltd.*		90,177		157,716
Sandfire Resources NL*		16,430		132,388
Saracen Mineral Holdings Ltd.*		91,198		55,066
Silver Lake Resources Ltd.*		38,561		129,263
St. Barbara Ltd.*		56,789		135,385
Sundance Resources Ltd.*		404,510		197,924
Western Areas NL		24,920		130,753
Total Materials				4,794,317

See notes to financial statements.

Schedules of Investments — IQ Australia Small Cap ETF (continued)

April 30, 2012

	Shares		Value
Common Stocks (continued)
Telecommunication Services — 0.6%
TPG Telecom Ltd.		50,112	$	94,686

Utilities — 1.2%
Energy World Corp., Ltd.*		147,336		88,963
Envestra Ltd.		139,259		113,806
Total Utilities				202,769

Total Common Stocks — 100.0%
(Cost $18,374,688)				16,281,506

	Shares		Value
Investment of Cash Collateral For
Securities Loaned — 9.2%
Money Market Fund — 9.2%
BNY Mellon Overnight Government Fund
(Cost $1,498,535)		1,498,535	$	1,498,535

Total Investments — 109.2%
(Cost $19,873,223)			$	17,780,041
Liabilities in Excess of Other
Assets — (9.2)%				(1,502,993	)
Net Assets — 100.0%			$	16,277,048

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $1,414,891; cash collateral of $1,498,535 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Security fair valued as determined in good faith in accordance with procedures established by the Board of Trustees.

See notes to financial statements.

Schedules of Investments — IQ Canada Small Cap ETF

April 30, 2012

	Shares		Value
Common Stocks — 99.3%
Consumer Discretionary — 1.8%
Great Canadian Gaming Corp.*		17,688	$	146,810
RONA, Inc.		38,392		411,919
Total Consumer Discretionary				558,729

Consumer Staples — 1.5%
Jean Coutu Group (PJC), Inc., Class A		33,597		481,196

Energy — 28.0%
Advantage Oil & Gas Ltd.*		50,193		157,496
AltaGas Ltd.^(a)		26,787		866,826
Angle Energy, Inc.*		24,414		123,559
Bankers Petroleum Ltd.*		74,706		258,611
Bellatrix Exploration Ltd.*		32,418		137,488
Birchcliff Energy Ltd.*		38,255		262,145
BlackPearl Resources, Inc.*		86,065		386,789
Canacol Energy Ltd.*		187,784		146,357
Canyon Services Group, Inc.		13,815		155,357
Celtic Exploration Ltd.*		25,621		375,517
Cequence Energy Ltd.*		38,104		60,167
Crew Energy, Inc.*		36,126		255,966
Denison Mines Corp.^(a)*		92,879		170,161
Ensign Energy Services, Inc.^(a)		38,290		553,450
Flint Energy Services Ltd.*		14,506		365,752
Gasfrac Energy Services, Inc.*		18,938		92,970
Ithaca Energy, Inc.*		78,221		234,358
Legacy Oil + Gas, Inc.*		38,049		331,983
NAL Energy Corp.^(a)		45,703		350,654
Nuvista Energy Ltd.*		30,035		95,460
PetroBakken Energy Ltd., Class A^(a)		23,177		335,474
Petrobank Energy and Resources Ltd.* .		32,109		460,209
Poseidon Concepts Corp.^(a)		24,468		317,753
Savanna Energy Services Corp.^(a)		25,578		197,799
Southern Pacific Resource Corp.*		102,598		163,044
TransGlobe Energy Corp.*		22,040		302,508
Trican Well Service Ltd.		44,351		641,506
Trinidad Drilling Ltd.		36,478		236,307
Uranium One, Inc.^(a)*		141,561		411,235
Whitecap Resources, Inc.*		37,264		335,695
Total Energy				8,782,596

Financials — 9.4%
Canadian Western Bank^(a)		22,785		661,675
Dundee Corp., Class A*		12,582		311,637
GMP Capital, Inc.		15,216		94,720
Industrial Alliance Insurance and
Financial Services, Inc.		27,306		870,630
TMX Group, Inc.		22,528		1,028,405
Total Financials				2,967,067

Health Care — 0.9%
CML Healthcare, Inc.		27,116		293,406

	Shares		Value
Common Stocks (continued)
Industrials — 9.4%
Aecon Group, Inc.		16,845	$	227,794
CAE, Inc.		77,827		850,783
Progressive Waste Solutions Ltd.		35,377		767,376
Russel Metals, Inc.		18,131		497,527
WestJet Airlines Ltd.		41,738		601,176
Total Industrials				2,944,656

Information Technology — 0.7%
Wi-LAN, Inc.		36,891		211,723

Materials — 39.3%
Alamos Gold, Inc.^(a)		35,951		657,922
Argonaut Gold, Inc.*		27,890		227,817
Augusta Resource Corp.*		31,171		79,824
AuRico Gold, Inc.*		84,972		780,956
Aurizon Mines Ltd.*		49,203		265,949
Avion Gold Corp.*		132,868		134,489
B2Gold Corp.*		100,394		379,037
Banro Corp.*		60,447		256,974
Canfor Corp.*		23,266		254,809
Capstone Mining Corp.*		88,969		265,660
China Gold International Resources
Corp., Ltd.^(a)*		47,828		217,367
Colossus Minerals, Inc.*		31,670		148,421
Copper Mountain Mining Corp.*		29,719		129,050
Dundee Precious Metals, Inc.*		29,111		226,594
Eastern Platinum Ltd.*		280,146		107,754
Endeavour Silver Corp.*		26,354		244,881
Extorre Gold Mines Ltd.*		27,933		118,750
First Majestic Silver Corp.*		31,732		499,130
Fortuna Silver Mines, Inc.*		37,755		158,594
Great Basin Gold Ltd.*		143,530		100,244
Guyana Goldfields, Inc.^(a)*		25,309		70,193
Harry Winston Diamond Corp.*		25,607		365,462
HudBay Minerals, Inc.		51,894		546,280
Jaguar Mining, Inc.*		25,477		70,916
Kirkland Lake Gold, Inc.*		18,778		245,191
Lake Shore Gold Corp.*		120,773		117,356
Major Drilling Group International, Inc.		23,817		357,514
Mercator Minerals Ltd.*		78,019		93,975
Methanex Corp.		28,149		990,963
Neo Material Technologies, Inc.*		34,750		383,043
Nevsun Resources Ltd.		60,497		222,895
North American Palladium Ltd.*		43,254		130,469
NovaGold Resources, Inc.*		65,455		471,724
Premier Gold Mines Ltd.*		41,480		200,693
Rainy River Resources Ltd.*		25,331		118,969
Romarco Minerals, Inc.*		176,196		180,128
Rubicon Minerals Corp.^(a)*		86,677		264,080
Sabina Gold & Silver Corp.*		35,990		100,180
San Gold Corp.^(a)*		94,372		134,687

See notes to financial statements.

Schedules of Investments — IQ Canada Small Cap ETF (continued)

April 30, 2012

	Shares		Value
Common Stocks (continued)
Materials (continued)
SEMAFO, Inc.		82,349	$	418,434
Sherritt International Corp.		89,457		511,597
Silvercorp Metals, Inc.		51,497		354,972
Taseko Mines Ltd.*		59,309		205,311
Thompson Creek Metals Co., Inc.*		50,725		302,414
Torex Gold Resources, Inc.^(a)*		124,701		217,102
Total Materials				12,328,770

Metals & Mining — 3.0%
Pretium Resources, Inc.*		19,149		323,495
Rio Alto Mining Ltd.*		51,678		220,218
Scorpio Mining Corp.*		59,657		63,404
Silver Standard Resources, Inc.*		24,331		351,438
Total Metals & Mining				958,555

Oil, Gas & Consumable Fuels — 2.8%
Gibson Energy, Inc.^(a)		29,614		678,639
Surge Energy, Inc.*		21,417		190,985
Total Oil, Gas & Consumable Fuels				869,624

Telecommunication Services — 0.7%
Manitoba Telecom Services, Inc.		6,595		228,968

	Shares		Value
Common Stocks (continued)
Utilities — 1.8%
Just Energy Group, Inc.^(a)		42,055	$	552,958

Total Common Stocks — 99.3%
(Cost $39,528,557)				31,178,248

Investment of Cash Collateral For
Securities Loaned — 18.0%
Money Market Fund — 18.0%
BNY Mellon Overnight Government Fund
(Cost $5,656,632)		5,656,632		5,656,632

Total Investments — 117.3%
(Cost $45,185,189)			$	36,834,880
Liabilities in Excess of Other
Assets — (17.3)%				(5,425,759	)
Net Assets — 100.0%			$	31,409,121

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $5,342,112; cash collateral of $5,656,632 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

See notes to financial statements.

Schedules of Investments — IQ South Korea Small Cap ETF

April 30, 2012

	Shares		Value
Common Stocks — 98.9%
Consumer Discretionary — 23.7%
Agabang&Company		3,772	$	43,223
Daekyo Co., Ltd.		10,214		54,047
Dongyang Mechatronics Corp.		5,966		72,323
Grand Korea Leisure Co., Ltd.		8,039		168,943
Hanil E-Wha Co., Ltd.		7,463		62,867
Hansae Co., Ltd.		4,905		38,107
Hwa Shin Co., Ltd.		6,132		58,329
Hyundai Greenfood Co., Ltd.		14,574		205,045
Interpark Corp.*		10,356		40,595
Jcontentree Corp.*		12,559		37,340
Kolao Holdings		3,106		34,629
LG Fashion Corp.		5,238		174,272
Loen Entertainment, Inc.		1,695		19,498
Lotte Midopa Co., Ltd.		3,621		45,978
Paradise Co., Ltd.		15,110		133,702
Pharmicell Co., Ltd.*		7,166		35,509
Pyeong Hwa Automotive Co., Ltd.		2,528		39,034
SBS Media Holdings Co., Ltd.		14,388		37,685
SL Corp.		4,249		73,503
S.M. Entertainment Co.*		4,343		155,831
Ssangyong Motor Co.*		9,697		52,341
Sungwoo Hitech Co., Ltd.		8,002		90,278
Woongjin Chemical Co., Ltd.*		68,940		47,582
Woongjin Holdings Co., Ltd.*		4,164		22,181
Total Consumer Discretionary				1,742,842

Consumer Staples — 2.4%
Daesang Corp.		5,409		87,109
DongA One Corp.		4,811		12,771
Harim Co., Ltd.		7,514		32,313
JW Shin-Yak Corp.		5,710		29,103
Samyang Foods Co., Ltd.		907		18,258
Total Consumer Staples				179,554

Financials — 10.3%
Daishin Securities Co., Ltd.		13,475		117,088
Hanwha Securities Co., Ltd.*		16,094		64,227
LIG Insurance Co., Ltd.		11,765		244,643
Meritz Fire & Marine Insurance Co., Ltd.		16,771		173,628
SK Securities Co., Ltd.*		59,082		62,212
Tong Yang Securities, Inc.		23,299		90,712
Total Financials				752,510

Health Care — 8.7%
Bukwang Pharmaceutical Co., Ltd.		4,325		44,585
Chabio & Diostech Co., Ltd.*		17,164		134,107
HanAll BioPharma Co., Ltd.*		7,849		60,424
Il Yang Pharmaceutical Co., Ltd.*		3,495		75,459
INFINITT Healthcare Co., Ltd.*		3,429		33,224
Medipost Co., Ltd.*		1,901		182,678
RNL BIO Co., Ltd.*		19,658		73,579
Yungjin Pharmaceutical Co., Ltd.*		20,966		31,538
Total Health Care				635,594

Industrials — 9.4%
Halla Engineering & Construction Corp.		4,132		42,595
iMarketKorea, Inc.		4,838		84,763
S&T Dynamics Co., Ltd.		5,976		72,444

	Shares		Value
Common Stocks (continued)
Industrials (continued)
STX Corp.		11,116	$	122,459
STX Engine Co., Ltd.		5,053		64,385
Sung Kwang Bend Co., Ltd.		4,310		88,479
Taeyoung Engineering & Construction		14,781		65,264
Taihan Electric Wire Co., Ltd.*		40,060		110,596
Y G-1 Co., Ltd.		3,166		35,999
Total Industrials				686,984

Information Technology — 32.6%
3s Korea Co., Ltd.*		10,365		187,100
Asia Pacific Systems, Inc.*		5,715		56,891
CrucialTec Co., Ltd.*		4,649		37,147
Curocom Co., Ltd.*		16,785		38,170
Daeduck Electronics Co., Ltd.		10,626		109,069
Daou Technology, Inc.		7,402		74,012
Duksan Hi-Metal Co., Ltd.*		4,840		99,359
GameHi Co., Ltd.*		4,343		31,589
Gemvax & Kael Co., Ltd.*		5,431		189,824
Haansoft, Inc.		5,101		60,257
Humax Co., Ltd.		4,034		31,876
ICD Co., Ltd.*		3,118		63,319
Iljin Display Co., Ltd.		4,372		46,617
Iljin Materials Co., Ltd.		3,863		47,000
InfraWare, Inc.*		3,606		29,196
JCentertainment Corp.		1,629		41,802
Jusung Engineering Co., Ltd.*		6,824		54,646
Lumens Co., Ltd.*		10,673		53,454
Melfas, Inc.		3,550		63,296
Neowiz Games Corp.*		4,056		91,160
NEPES Corp.		4,686		79,197
Osung LST Co., Ltd.*		4,318		30,337
PARTRON Co., Ltd.		5,916		69,361
POSCO ICT Co., Ltd.		9,986		71,131
SFA Engineering Corp.		4,281		204,177
Signetics Corp.*		7,878		24,224
Silicon Works Co., Ltd.		2,687		67,286
Simm Tech Co., Ltd.		4,879		51,807
SK Broadband Co., Ltd.*		38,827		110,971
SK Communications Co., Ltd.*		4,072		28,573
STS Semiconductor &
Telecommunications Co., Ltd.		10,978		65,084
TOPTEC Co., Ltd.*		2,014		27,088
Webzen, Inc.*		3,662		37,264
WONIK IPS Co., Ltd.*		14,264		90,749
Woongjin Energy Co., Ltd.*		5,264		31,813
Total Information Technology				2,394,846

Materials — 11.8%
Capro Corp.		6,265		108,932
CNK International Co., Ltd.*		12,390		18,473
Dongbu HiTek Co., Ltd.*		7,721		55,066
Dongbu Steel Co., Ltd.*		7,764		38,472
EG Corp.		1,419		75,588
Eugene Corp.*		11,525		44,208
Foosung Co., Ltd.*		13,944		76,128
Hansol Paper Co., Ltd.		11,571		78,736
Huchems Fine Chemical Corp.		6,189		124,040
Moorim P&P Co., Ltd.		8,011		34,061

See notes to financial statements.

Schedules of Investments — IQ South Korea Small Cap ETF (continued)

April 30, 2012

	Shares		Value
Common Stocks (continued)
Materials (continued)
Namhae Chemical Corp.		5,805	$	47,873
Poongsan Corp.		5,026		133,864
Songwon Industrial Co., Ltd.		4,260		31,287
Total Materials				866,728

Total Common Stocks — 98.9%
(Cost $7,551,716)				7,259,058

Rights* — 0.1%
Consumer Discretionary — 0.1%
Pharmicell Co., Ltd., expiring 6/20/12
(Cost $0)		1,580		2,440

Information Technology — 0.0%^(a)
3s Korea Co., Ltd., expiring 6/1/12
(Cost $0)		318		1,688

Total Rights — 0.1%
(Cost $0)		1,898		4,128

	Shares		Value
Short-Term Investment — 0.0%^(a)
Money Market Fund — 0.0%^(a)
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $527)		527	$	527

Total Investments — 99.0%
(Cost $7,552,243)			$	7,263,713
Other Assets in Excess of
Liabilities — 1.0%				74,555
Net Assets — 100.0%			$	7,338,268

Non-income producing securities.

(a)

Less than 0.05%.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

See notes to financial statements.

Schedules of Investments — IQ Global Agribusiness Small Cap ETF

April 30, 2012

	Shares		Value
Common Stocks — 99.4%
Australia — 6.1%
GrainCorp Ltd.		170,005	$	1,633,559
Nufarm Ltd.		153,341		785,407
Total Australia				2,418,966

Brazil — 3.8%
Cosan Ltd. ADR Class A		109,059		1,509,377

China — 8.5%
China Bluechemical Ltd. Class H		1,518,737		1,086,525
China Minzhong Food Corp., Ltd.^(a)*		348,027		236,275
China Modern Dairy Holdings Ltd.*		2,871,307		817,968
First Tractor Co., Ltd. Class H		343,789		320,845
Shenguan Holdings Group Ltd.		1,068,483		578,470
Yongye International, Inc. ADR^(a)*		32,492		104,299
Zhongpin, Inc. ADR*		26,487		250,037
Total China				3,394,419

Hong Kong — 10.7%
Asian Citrus Holdings Ltd.		571,724		341,955
Chaoda Modern Agriculture
(Holdings)Ltd.^(c)*		894,006		—
China Agri-Industries Holdings Ltd.		1,459,450		1,076,092
China Foods Ltd.		617,880		669,033
China Yurun Food Group Ltd.		1,166,585		1,493,242
Global Bio-chem Technology Group
Co., Ltd.		1,640,647		323,572
Sinofert Holdings Ltd.^(a)*		1,523,157		331,815
Total Hong Kong				4,235,709

Indonesia — 4.2%
PT Bakrie Sumatera Plantations Tbk		9,291,446		303,295
PT Japfa Comfeed Indonesia Tbk		740,376		340,361
PT Malindo Feedmill Tbk		595,572		73,227
PT Perusahaan Perkebunan London
Sumatra Indonesia Tbk		2,366,856		753,284
PT Sampoerna Agro Tbk		532,838		189,874
Total Indonesia				1,660,041

Ireland — 2.2%
Glanbia PLC		114,628		870,849

Japan — 27.1%
Fuji Oil Co., Ltd.		52,443		714,609
House Foods Corp.		62,445		1,054,241
Iseki & Co., Ltd.^(a)		158,778		379,818
Itoham Foods, Inc.		123,254		467,731
Kewpie Corp.		92,748		1,393,921
Kumiai Chemical Industry Co., Ltd.		61,266		244,773
Mitsui Sugar Co., Ltd.		67,242		220,645

	Shares		Value
Common Stocks (continued)
Japan (continued)
Morinaga Milk Industry Co., Ltd.		168,192	$	615,092
Nippon Flour Mills Co., Ltd.		110,195		499,600
Nippon Meat Packers, Inc.		147,177		1,889,366
Nisshin Oillio Group Ltd.		85,188		358,484
Nisshin Seifun Group, Inc.		158,853		1,945,748
NOF Corp.		132,835		668,791
Prima Meat Packers Ltd.		96,390		189,532
Yamatane Corp.		75,222		109,284
Total Japan				10,751,635

Luxembourg — 0.9%
Adecoagro SA ADR*		40,141		358,058

Netherlands — 7.6%
CSM NV		58,000		819,092
Nutreco NV		30,105		2,187,516
Total Netherlands				3,006,608

Singapore — 2.8%
First Resources Ltd.		317,408		482,282
Indofood Agri Resources Ltd.*		382,966		441,062
Mewah International, Inc.		549,576		204,320
Total Singapore				1,127,664

Spain — 3.7%
Deoleo SA*		299,766		136,880
Ebro Foods SA		75,079		1,327,097
Total Spain				1,463,977

Thailand — 1.7%
GFPT PCL		526,662		172,985
Khon Kaen Sugar Industry PCL		531,436		238,498
Thai Vegetable Oil PCL		326,264		247,218
Total Thailand				658,701

United Kingdom — 1.7%
Devro PLC		141,451		708,151

United States — 18.4%
Andersons, Inc.		15,749		793,750
Chiquita Brands International, Inc.*		39,266		333,761
CVR Partners LP^(a)		16,142		464,083
Dole Food Co., Inc.*		31,140		264,067
Lindsay Corp.		10,886		727,076
Smithfield Foods, Inc.*		137,977		2,891,998
Toro Co.		25,774		1,841,810
Total United States				7,316,545

Total Common Stocks — 99.4%
(Cost $43,035,437)				39,480,700

See notes to financial statements.

Schedules of Investments — IQ Global Agribusiness Small Cap ETF (continued)

April 30, 2012

	Shares		Value
Short-Term Investment — 0.2%
Money Market Fund — 0.2%
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $95,007)		95,007	$	95,007

Investment of Cash Collateral For
Securities Loaned — 2.5%
Money Market Fund — 2.5%
BNY Mellon Overnight Government Fund
(Cost $976,954)		976,954		976,954


	Shares		Value
Total Investments — 102.1%
(Cost $44,107,398)			$	40,552,661
Liabilities in Excess of Other
Assets — (2.1)%				(843,995	)
Net Assets — 100.0%			$	39,708,666

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $938,701; cash collateral of $976,954 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

(c)

Security fair valued as determined in good faith in accordance with procedures established by the Board of Trustees.

ADR — American Depository Receipt

LP — Limited Partnership

PCL — Public Company Limited

See notes to financial statements.

Schedules of Investments — IQ Global Oil Small Cap ETF

April 30, 2012

	Shares		Value
Common Stocks — 98.4%
Australia — 3.2%
Caltex Australia Ltd.		5,070	$	72,680
Horizon Oil Ltd.*		37,403		12,850
Total Australia				85,530

Bermuda — 0.5%
Archer Ltd.*		6,903		14,400

Canada — 9.3%
Bankers Petroleum Ltd.*		9,296		32,180
Canyon Services Group, Inc.		1,719		19,331
Cequence Energy Ltd.*		4,742		7,488
Ensign Energy Services, Inc.		4,765		68,874
Ithaca Energy, Inc.*		9,733		29,161
Ivanhoe Energy, Inc. ADR*		10,857		9,880
Southern Pacific Resource Corp.*		12,766		20,287
TransGlobe Energy Corp. ADR*		2,742		37,703
Twin Butte Energy Ltd.		7,194		19,952
Total Canada				244,856

China — 1.3%
China Automation Group Ltd.		20,986		5,789
Sinopec Shanghai Petrochemical Co.,
Ltd. Class H		85,073		29,609
Total China				35,398

Colombia — 2.1%
Petrominerales Ltd.		3,734		54,614

Finland — 2.2%
Neste Oil OYJ		4,805		56,792

France — 2.0%
Etablissements Maurel et Prom		3,162		52,606

Hong Kong — 0.4%
Sino Oil And Gas Holdings Ltd.*		395,930		9,901

Italy — 1.2%
ERG SpA		2,097		15,792
Saras SpA*		13,408		16,948
Total Italy				32,740

Japan — 3.7%
Cosmo Oil Co., Ltd.		19,296		53,651
Showa Shell Sekiyu K.K.		6,778		42,869
Total Japan				96,520

Netherlands — 9.3%
Core Laboratories NV ADR^(a)		1,796		246,016

Norway — 2.9%
Det Norske Oljeselskap ASA*		2,198		31,560
DNO International ASA*		21,966		34,837
Norwegian Energy Co. ASA*		7,569		9,474
Total Norway				75,871

	Shares		Value
Common Stocks (continued)
Philippines — 0.3%
Petron Corp.		25,900	$	6,552

Russia — 1.5%
Alliance Oil Co., Ltd.^(a)*		4,135		38,777

Thailand — 5.6%
Bangchak Petroleum PCL		12,962		10,749
Esso Thailand PCL		44,852		17,066
IRPC PCL		374,565		53,109
Thai Oil PCL		30,687		67,362
Total Thailand				148,286

United Arab Emirates — 3.7%
Dragon Oil PLC		9,307		88,639
Exillon Energy PLC*		4,236		9,541
Total United Arab Emirates				98,180

United Kingdom — 4.4%
Max Petroleum PLC*		37,997		6,787
Nautical Petroleum PLC*		3,296		18,090
Rockhopper Exploration PLC*		10,671		58,959
Salamander Energy PLC*		5,052		20,394
Xcite Energy Ltd.*		6,960		11,754
Total United Kingdom				115,984

United States — 44.8%
Alon USA Energy, Inc.		378		3,417
Bonanza Creek Energy, Inc.*		372		8,173
BPZ Resources, Inc.^(a)*		3,743		15,159
CVR Energy, Inc.*		3,252		98,731
Gulfport Energy Corp.*		1,692		44,347
Harvest Natural Resources, Inc.*		1,289		8,868
Key Energy Services, Inc.*		5,683		71,947
Kodiak Oil & Gas Corp.*		9,879		87,429
Lufkin Industries, Inc.		1,246		95,743
Magnum Hunter Resources Corp.^(a)*		4,840		30,056
Oceaneering International, Inc.		4,058		209,514
PetroQuest Energy, Inc.*		2,142		12,938
Pioneer Drilling Co.*		2,309		18,195
SemGroup Corp. Class A*		1,560		49,608
Stone Energy Corp.*		1,835		51,472
Sunoco, Inc.		4,011		197,702
Tesoro Corp.*		5,221		121,388
VAALCO Energy, Inc.*		2,145		19,455
Western Refining, Inc.		2,013		38,348
Total United States				1,182,490

Total Common Stocks — 98.4%
(Cost $2,997,613)				2,595,513

See notes to financial statements.

Schedules of Investments — IQ Global Oil Small Cap ETF (continued)

April 30, 2012

	Shares		Value
Warrant — 0.0%
United States — 0.0%
Magnum Hunter Resources Corp,
expiring 10/14/13*
(Cost $0)		265	$	—

Short-Term Investment — 0.9%

Money Market Fund — 0.9%
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $22,890)		22,890		22,890

Investment of Cash Collateral For
Securities Loaned — 12.2%
Money Market Fund — 12.2%
BNY Mellon Overnight Government Fund
(Cost $321,232)		321,232		321,232


	Shares		Value
Total Investments — 111.5%
(Cost $3,341,735)			$	2,939,635
Liabilities in Excess of Other
Assets — (11.5)%				(302,999	)
Net Assets — 100.0%			$	2,636,636

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $313,239; cash collateral of $321,232 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.ks of April 30, 2012.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

ADR — American Depository Receipt

K.K. — Kabushiki Kaisha

PCL — Public Company Limited

See notes to financial statements.

Schedules of Investments — IQ US Real Estate Small Cap ETF

April 30, 2012

	Shares		Value
Common Stocks — 99.8%
Diversified REITs — 8.8%
CapLease, Inc.		62,203	$	258,142
Cousins Properties, Inc.		97,742		768,252
Investors Real Estate Trust		78,893		569,608
Redwood Trust, Inc.		73,718		861,026
Resource Capital Corp.		77,859		420,439
Total Diversified REITs				2,877,467

Hotel REITs — 12.7%
Ashford Hospitality Trust, Inc.		63,851		545,287
FelCor Lodging Trust, Inc.*		116,923		493,415
Hersha Hospitality Trust		144,090		828,517
Pebblebrook Hotel Trust		47,820		1,151,506
Sunstone Hotel Investors, Inc.*		111,333		1,135,597
Total Hotel REITs				4,154,322

Mortgage REITs — 27.0%
Anworth Mortgage Asset Corp.		126,845		854,935
ARMOUR Residential REIT, Inc.^(a)		166,283		1,160,655
CreXus Investment Corp.		71,911		754,346
Dynex Capital, Inc.		50,792		478,969
Gramercy Capital Corp.*		33,670		86,532
Invesco Mortgage Capital		108,304		1,910,483
iStar Financial, Inc.^(a)*		67,659		468,200
Newcastle Investment Corp.		114,358		808,511
NorthStar Realty Finance Corp.		104,256		594,259
PennyMac Mortgage Investment Trust		28,141		570,981
RAIT Financial Trust^(a)		46,688		225,970
Starwood Property Trust, Inc.		43,646		910,892
Total Mortgage REITs				8,824,733

Office REITs — 17.9%
Brandywine Realty Trust		133,956		1,588,718
First Industrial Realty Trust, Inc.*		81,299		1,003,230
First Potomac Realty Trust		47,201		587,181
Franklin Street Properties Corp.		67,720		681,940
Government Properties Income Trust		33,120		769,047
Lexington Realty Trust		126,887		1,129,294
MPG Office Trust, Inc.*		40,203		84,828
Total Office REITs				5,844,238

Residential REITs — 5.1%
Associated Estates Realty Corp.		39,837		674,440
Education Realty Trust, Inc.		86,159		971,012
Total Residential REITs				1,645,452

	Shares		Value
Common Stocks (continued)
Retail REITs — 14.3%
Acadia Realty Trust		40,135	$	930,329
Cedar Realty Trust, Inc.		53,346		278,466
Getty Realty Corp.^(a)		25,387		401,622
Glimcher Realty Trust		127,232		1,258,324
Inland Real Estate Corp.		72,696		625,186
Pennsylvania Real Estate
Investment Trust		52,076		733,751
Ramco-Gershenson Properties Trust		36,354		437,702
Total Retail REITs				4,665,380

Specialized REITs — 14.0%
CubeSmart		114,557		1,438,836
DCT Industrial Trust, Inc.		230,827		1,368,804
Medical Properties Trust, Inc.		126,961		1,190,894
Sabra Health Care REIT, Inc.		34,602		579,239
Total Specialized REITs				4,577,773

Total Common Stocks — 99.8%
(Cost $30,792,432)				32,589,365

Short-Term Investment — 0.1%

Money Market Fund — 0.1%
Invesco Treasury Portfolio Cash
Management, 0.02%^(b)
(Cost $53,747)		53,747		53,747

Investment of Cash Collateral For
Securities Loaned — 4.1%

Money Market Fund — 4.1%
BNY Mellon Overnight Government Fund
(Cost $1,341,525)		1,341,525		1,341,525

Total Investments — 104.0%
(Cost $32,187,704)			$	33,984,637
Liabilities in Excess of Other
Assets — (4.0)%				(1,315,786	)
Net Assets — 100.0%			$	32,668,851

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of securities on loan is $1,285,176; cash collateral of $1,341,525 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Rate shown represents annualized 7-day yield as of April 30, 2012.

REITs — Real Estate Investment Trusts

See notes to financial statements.

Schedules of Investments — IQ Emerging Markets Mid Cap ETF

April 30, 2012

	Shares		Value
Common Stocks — 97.1%
Bermuda — 0.5%
Sihuan Pharmaceutical Holdings
Group Ltd.^(a)		22,000	$	8,366

Brazil — 6.4%
Anhanguera Educacional
Participacoes SA		723		9,626
BR Properties SA		1,163		14,612
Brookfield Incorporacoes SA		2,348		6,235
Companhia de Saneamento de
Minas Gerais-Copasa MG		452		10,654
Diagnosticos da America SA		1,454		10,477
Ez Tec Empreendimentos E
Participacoes SA		750		8,334
Gafisa SA		3,322		6,155
Iochpe-Maxion SA		524		9,129
Marfrig Alimentos SA		875		4,873
Mills Estruturas e Servicos de
Engenharia SA		504		6,596
Raia Drogasil SA		1,267		13,631
Rossi Residencial SA		1,488		6,268
Total Brazil				106,590

Cayman Islands — 2.3%
Bosideng International Holdings Ltd.		22,000		6,352
China Metal Recycling Holdings Ltd.		6,000		6,884
China Rongsheng Heavy Industries
Group Holdings Ltd.		32,500		8,127
NVC Lighting Holdings Ltd.		19,000		6,907
Zhen Ding Technology Holding Ltd.*		3,000		10,014
Total Cayman Islands				38,284

Chile — 4.0%
Administradora de Fondos de
Pensiones Provida SA		1,443		7,713
Inversiones Aguas Metropolitanas SA		9,061		15,988
Parque Arauco SA*		4,472		8,699
Ripley Corp. SA		7,185		8,022
Salfacorp SA		3,418		8,747
Sociedad Matriz Saam SA*		1		—
Sonda SA		3,130		9,334
Vina Concha y Toro SA		3,841		8,165
Total Chile				66,668

China — 6.5%
Ajisen (China) Holdings Ltd.		4,000		4,486
Beijing Capital International Airport
Co., Ltd., Class H		16,000		10,457
China Molybdenum Co. Ltd., Class H*		21,000		8,175
China Shanshui Cement Group		14,000		11,351
China Shipping Development Co. Ltd.,
Class H*		12,000		7,812
Dongyue Group*		10,000		7,489
Guangshen Railway Co., Ltd., Class H*		30,000		11,137
Li Ning Co. Ltd.		5,000		4,602
Renhe Commercial Holdings Co., Ltd.		64,000		3,712
Semiconductor Manufacturing
International Corp.*		180,000		8,933

	Shares		Value
Common Stocks (continued)
China (continued)
Shui On Land Ltd.		35,486	$	14,866
Sinopec Shanghai Petrochemical
Co., Ltd., Class H		22,000		7,657
Springland International Holdings Ltd.		10,824		8,009
Total China				108,686

Egypt — 1.4%
Commercial International Bank
Egypt SAE		3,731		15,794
Talaat Moustafa Group*		10,455		7,316
Total Egypt				23,110

Hong Kong — 2.6%
Far East Horizon Ltd.*		12,000		9,235
Franshion Properties China Ltd.		27,608		7,616
KWG Property Holding Ltd.		12,106		8,005
Trinity Ltd.		9,089		7,604
Yingde Gases Group Co. Ltd.		10,000		11,627
Total Hong Kong				44,087

Hungary — 0.4%
Magyar Telekom
Telecommunications PLC		2,643		6,675

Indonesia — 4.7%
Bank Pembangunan Daerah Jawa
Barat Dan Banten Tbk PT		91,000		10,198
Bumi Serpong Damai PT		59,000		9,180
Global MediaCom Tbk PT		58,000		10,476
Harum Energy Tbk PT		9,500		7,391
PT Aneka Tambang Tbk		72,000		13,475
PT Lippo Karawaci Tbk		140,500		12,689
PT Perusahaan Perkebunan London
Sumatra Indonesia Tbk		27,220		8,663
Salim Ivomas Pratama Tbk PT*		44,000		6,559
Total Indonesia				78,631

Malaysia — 4.9%
Berjaya Corp. Berhad		17,769		4,698
Berjaya Sports Toto Berhad		4,700		6,710
Boustead Holdings Berhad		3,400		5,876
Bursa Malaysia Berhad		3,900		8,699
Dialog Group Berhad		10,960		8,186
Gamuda Berhad		12,600		14,823
Genting Plantations Berhad		2,600		8,077
IGB Corp. Berhad		7,700		6,972
Kencana Petroleum Berhad*		10,000		10,905
SP Setia Berhad		5,422		6,486
Total Malaysia				81,432

Mexico — 3.5%
Bolsa Mexicana de Valores SAB de CV		5,301		10,609
Genomma Lab Internacional
SAB de CV, Class B*		4,603		8,104
Grupo Aeroportuario del Pacifico
SAB de CV, Class B		4,545		17,710

See notes to financial statements.

Schedules of Investments — IQ Emerging Markets Mid Cap ETF (continued)

April 30, 2012

	Shares		Value
Common Stocks (continued)
Mexico (continued)
Grupo Aeroportuario del Sureste
SAB de CV, Class B		1,723	$	14,166
Industrias CH SAB de CV, Class B*		1,707		7,756
Total Mexico				58,345

Peru — 0.6%
Grana y Montero SA		2,866		9,732

Philippines — 3.4%
Energy Development Corp.		60,847		8,503
International Container Terminal
Services, Inc.		8,440		13,593
Jollibee Foods Corp.		3,460		9,186
Lepanto Consolidated Mining*		106,000		3,841
Philex Mining Corp.		17,700		10,460
Robinsons Land Corp.		25,400		10,420
Total Philippines				56,003

Poland — 1.3%
Cyfrowy Polsat SA*		1,569		6,921
Enea SA		1,236		6,526
Synthos SA		3,855		7,457
Total Poland				20,904

Russia — 0.4%
Aeroflot — Russian Airlines OJSC		4,355		7,009

South Africa — 9.9%
Adcock Ingram Holdings Ltd.		892		7,017
Aveng Ltd.		2,611		13,395
AVI Ltd.		1,523		9,472
Barloworld Ltd.		1,274		16,110
Clicks Group Ltd.		1,407		8,492
JD Group Ltd.		1,113		6,980
Nampak Ltd.		4,911		14,226
Netcare Ltd.		7,834		14,202
Northam Platinum Ltd.		1,717		7,391
Pick n Pay Stores Ltd.		1,839		10,685
Pretoria Portland Cement Co., Ltd.		3,218		12,864
Reunert Ltd.		1,228		11,408
Sappi Ltd.*		3,176		11,544
Spar Group Ltd.		1,023		16,044
Telkom South Africa Ltd.		2,054		6,303
Total South Africa				166,133

South Korea — 13.8%
BS Financial Group, Inc.		1,163		11,989
Cheil Worldwide, Inc.		670		11,679
DGB Financial Group, Inc.		910		10,669
Dongbu Insurance Co., Ltd.		340		13,599
Dongkuk Steel Mill Co., Ltd.		510		7,965
Hanjin Shipping Co., Ltd.*		580		7,980
Hanwha Corp.		430		11,034
Hotel Shilla Co., Ltd.		250		11,702
Hyosung Corp.		233		11,937
Hyundai Development Co.		373		7,872
Hyundai Hysco Co., Ltd.		220		7,777

	Shares		Value
Common Stocks (continued)
South Korea (continued)
Hyundai Marine & Fire
Insurance Co., Ltd.		570	$	14,627
Hyundai Securities Co., Ltd.*		1,540		12,728
Kolon Industries, Inc.		116		6,426
Korean Reinsurance Co.		561		6,801
Kumho Tire Co., Inc.*		740		9,233
LG Innotek*		77		5,546
LG International Corp.		213		8,726
LG Uplus Corp.		1,576		7,823
Samsung Fine Chemicals Co., Ltd.		192		9,225
SK Networks Co., Ltd.		920		7,603
SKC Co., Ltd.		144		4,988
Woongjin Coway Co., Ltd.		390		12,493
Woori Investment & Securities Co., Ltd.*		1,000		9,910
Total South Korea				230,332

Taiwan — 24.0%
Advantech Co., Ltd.		3,000		10,189
Chicony Electronics Co., Ltd.		5,000		9,758
China Airlines Ltd.		19,000		7,383
China Life Insurance Co., Ltd.		14,280		12,760
China Petrochemical
Development Corp.		11,000		11,110
E Ink Holdings, Inc.		6,000		6,574
Epistar Corp.		6,000		14,585
EVA Airways Corp.		12,000		7,210
Evergreen Marine Corp.		11,999		7,066
Far Eastern Department Stores, Ltd.		6,720		7,247
Formosa Taffeta Co., Ltd.		8,000		7,559
Giant Manufacturing Co., Ltd.		2,000		10,066
Highwealth Construction Corp.		7,000		11,743
Hiwin Technologies Corp.		2,000		18,967
Inventec Corp.		21,000		8,088
KGI Securities Co., Ltd.		30,950		14,305
Kinsus Interconnect Technology Corp.		1,953		6,138
LCY Chemical Corp.		4,000		6,176
Macronix International Co., Ltd.		26,000		8,581
Nan Kang Rubber Tire Co., Ltd.		5,000		7,344
Novatek Microelectronics Corp.		3,890		11,787
Pou Chen Corp.		20,000		17,153
Powertech Technology, Inc.		4,400		7,479
Radiant Opto-Electronics Corp.		3,000		12,633
Ruentex Industries Ltd.		5,000		8,713
Shin Kong Financial Holding Co., Ltd.*		54,000		16,010
Simplo Technology Co., Ltd.		1,867		14,382
Taishin Financial Holding Co., Ltd.		51,760		20,024
Taiwan Business Bank Co., Ltd.		30,000		9,121
Taiwan Fertilizer Co. Ltd.		6,000		14,380
Taiwan Glass Industry Corp.		9,000		8,967
TECO Electric And Machinery Co., Ltd. .		13,000		9,525
Tripod Technology Corp.		3,440		10,129
TSRC Corp.		4,400		10,650
Unimicron Technology Corp.		9,000		10,245
Walsin Lihwa Corp.		29,000		8,449
Wintek Corp.		9,598		6,260
WPG Holdings Ltd.		9,440		12,895
Total Taiwan				401,651

See notes to financial statements.

Schedules of Investments — IQ Emerging Markets Mid Cap ETF (continued)

April 30, 2012

	Shares		Value
Common Stocks (continued)
Thailand — 5.0%
Electricity Generating PCL		2,863	$	9,217
Glow Energy PCL		3,714		8,123
Home Product Center PCL		16,500		7,512
Land And Houses PCL		28,700		7,420
Minor International PCL		27,830		12,761
Robinson Department Store PCL		4,000		6,927
Thai Union Frozen Products PCL		4,500		10,646
TMB Bank PCL		221,700		12,257
True Corp. PCL*		66,700		7,982
Total Thailand				82,845

Turkey — 1.5%
TAV Havalimanlari Holding AS*		1,694		8,899
Turk Hava Yollari Anonim Ortakligi*		7,108		10,871
Turkiye Sise ve Cam Fabrikalari AS		3,385		5,773
Total Turkey				25,543

Total Common Stocks — 97.1%
(Cost $1,838,547)				1,621,026
Right — 0.0%^(b)
Thailand — 0.0%^(b)
Thai Union Frozen Products Public
Company Ltd.*
(Cost $0)		900		666

	Shares		Value
Investment of Cash Collateral For
Securities Loaned — 0.5%
Money Market Fund — 0.5%
BNY Mellon Overnight Government Fund
(Cost $8,360)		8,360	$	8,360

Total Investments — 97.6%
(Cost $1,846,907)			$	1,630,052
Other Assets in Excess
of Liabilities — 2.4%^(c)				39,674
Net Assets — 100.0%			$	1,669,726

Non-income producing securities.

(a)

All or a portion of security is on loan. The aggregate market value of the security on loan is $7,948; cash collateral of $8,360 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b)

Less than 0.05%

(c)

Other Assets in Excess of Liabilities includes net unrealized depreciation on swaps.

PCL — Public Company Limited

Total return swap contracts outstanding at April 30, 2012:

Total Return Benchmark	Annual Financing Rate Received		Expiration Date	Notional Amount		Unrealized Appreciation (Depreciation)
Housing Development & Infrastructure Ltd.	2.09	%	07/17/13	$	9,421	$	15
Reliance Capital Ltd.	2.09	%	07/17/13		5,691		3
Satyam Computer Services Ltd.	2.09	%	07/17/13		8,112		11
Unitech Ltd.	2.09	%	07/17/13		6,088		(23	)
Yes Bank Ltd.	2.09	%	07/17/13		11,386		(21	)
						$	(15	)

Morgan Stanley acts as the counterparty to the total return swap contracts listed above. The Fund either receives fees from or pays fees to, the counterparty, depending upon the total return of the security, and the agreed-upon financing rate.

See notes to financial statements.

Statements of Assets and Liabilities

April 30, 2012

		IQ Hedge Multi-Strategy Tracker ETF			IQ Hedge Macro Tracker ETF			IQ Real Return ETF			IQ Global Resources ETF		IQ Merger Arbitrage ETF
Assets
Investments, at cost:	$	212,301,218		$	56,030,582		$	30,652,759		$	70,484,685		$	25,557,343
Investments, at value (including
securities on loan)¹	$	214,832,845		$	56,909,520		$	30,796,358		$	69,462,114		$	26,469,484
Cash		27,754			—			—			—			—
Foreign currency²		—			—			—			5,441			13,489
Cash deposited at broker for
futures collateral		1,146,600			107,750			—			842,500			219,500
Cash deposited at broker for
swap collateral		5,700,515			—			—			—			—
Receivable for investments sold		2,307,396			—			—			2,093			655,389
Variation margin receivable		21,525			12,870			—			61,100			15,915
Dividend and interest receivable		10,045			2,043			1,173			175,814			3,074
Total Assets		224,046,680			57,032,183			30,797,531			70,549,062			27,376,851

Liabilities
Collateral for securities on loan
(Note 2)		23,898,639			6,488,800			3,244,220			2,441,356			1,333,634
Payable for capital shares
redeemed		2,771,456			—			—			—			—
Advisory fees payable		122,112			30,740			10,530			41,410			15,864
Compliance fees payable		116			26			15			57			17
Due to broker		836,392			23,794			—			—			—
Due to custodian		—			12,900			—			27,682			8,395
Accrued expenses and other liabilities		2,557			358			54			54			54
Total Liabilities		27,631,272			6,556,618			3,254,819			2,510,559			1,357,964
Net Assets	$	196,415,408		$	50,475,565		$	27,542,712		$	68,038,503		$	26,018,887

Composition of Net Assets
Paid-in capital	$	208,708,217		$	51,699,555		$	27,551,354		$	80,692,292		$	26,861,595
Undistributed (accumulated) net
investment income (loss)		659,666			152,347			(1,837	)		507,525			(126,487	)
Undistributed (accumulated) net
realized gain (loss) on investments,
swap transactions, futures contracts
and foreign currency translations		(15,540,698	)		(2,245,669	)		(150,404	)		(12,234,659	)		(1,648,237	)
Net unrealized appreciation
(depreciation) on investments, swap
transactions, futures contracts and
foreign currency translations		2,588,223			869,332			143,599			(926,655	)		932,016
Net Assets	$	196,415,408		$	50,475,565		$	27,542,712		$	68,038,503		$	26,018,887

NET ASSET VALUE PER SHARE
Shares Outstanding (no par value,
unlimited shares authorized)		7,100,000			1,850,000			1,050,000			2,350,000			1,000,000
Net Asset Value	$	27.66		$	27.28		$	26.23		$	28.95		$	26.02

¹Market value of securities on loan:	$	23,293,149		$	6,321,194		$	3,162,781		$	2,320,861		$	1,266,639
²Cost of foreign currency:	$	—		$	—		$			$	5,435		$	13,210

See notes to financial statements.

Statements of Assets and Liabilities (continued)

April 30, 2012

	IQ Australia Small Cap ETF			IQ Canada Small Cap ETF			IQ South Korea Small Cap ETF			IQ Global Agribusiness Small Cap ETF
Assets
Investments, at cost:	$	19,873,223		$	45,185,189		$	7,552,243		$	44,107,398
Investments, at value (including securities on loan)¹	$	17,780,041		$	36,834,880		$	7,263,713		$	40,552,661
Foreign currency²		8,346			242,225			65,400			5,317
Dividend and interest receivable		23,417			14,395			14,071			152,307
Total Assets		17,811,804			37,091,500			7,343,184			40,710,285

Liabilities
Collateral for securities on loan (Note 2)		1,498,535			5,656,632			—			976,954
Due to custodian		27,040			8,026			—			—
Advisory fees payable		9,086			17,525			4,849			24,517
Compliance fees payable		41			142			13			94
Accrued expenses and other liabilities		54			54			54			54
Total Liabilities		1,534,756			5,682,379			4,916			1,001,619
Net Assets	$	16,277,048		$	31,409,121		$	7,338,268		$	39,708,666

Composition of Net Assets
Paid-in capital	$	21,324,297		$	47,261,493		$	9,959,401		$	45,727,854
Undistributed (accumulated) net investment
income (loss)		44,532			59,348			(156	)		83,218
Undistributed (accumulated) net realized gain (loss)
on investments, swap transactions, futures contracts and foreign currency translations		(2,998,631	)		(7,570,015	)		(2,332,855	)		(2,551,772	)
Net unrealized appreciation (depreciation) on
investments, swap transactions, futures contracts
and foreign currency translations		(2,093,150	)		(8,341,705	)		(288,122	)		(3,550,634	)
Net Assets	$	16,277,048		$	31,409,121		$	7,338,268		$	39,708,666

NET ASSET VALUE PER SHARE
Shares Outstanding (no par value, unlimited
shares authorized)		700,000			1,200,000			300,000			1,600,000
Net Asset Value	$	23.25		$	26.17		$	24.46		$	24.82

¹Market value of securities on loan:	$	1,414,891		$	5,342,112		$	—		$	938,701
²Cost of foreign currency:	$	8,358		$	233,630		$	65,032		$	5,321

See notes to financial statements.

Statements of Assets and Liabilities (continued)

April 30, 2012

	IQ Global Oil Small Cap ETF			IQ US Real Estate Small Cap ETF			IQ Emerging Markets Mid Cap ETF
Assets
Investments, at cost:	$	3,341,735		$	32,187,704		$	1,846,907
Investments, at value (including securities on loan)¹	$	2,939,635		$	33,984,637		$	1,630,052
Cash		1,372			—			—
Foreign currency²		14,507			—			65,902
Unrealized appreciation on swap transactions		—			—			29
Dividend and interest receivable		4,156			43,803			3,330
Total Assets		2,959,670			34,028,440			1,699,313

Liabilities
Unrealized depreciation on swap transactions		—			—			44
Due to custodian		—			—			16,068
Collateral for securities on loan (Note 2)		321,232			1,341,525			8,360
Advisory fees payable		1,757			18,064			1,035
Compliance fees payable		—			—			5
Due to broker		—			—			4,030
Accrued expenses and other liabilities		45			—			45
Total Liabilities		323,034			1,359,589			29,587
Net Assets	$	2,636,636		$	32,668,851		$	1,669,726

Composition of Net Assets
Paid-in capital	$	3,109,053		$	30,929,256		$	2,278,322
Undistributed (accumulated) net investment income (loss)		10,305			154,244			71,233
Undistributed (accumulated) net realized gain (loss) on
investments, swap transactions, futures contracts and
foreign currency translations		(80,835	)		(211,582	)		(462,102	)
Net unrealized appreciation (depreciation) on investments,
swap transactions, futures contracts and foreign currency translations		(401,887	)		1,796,933			(217,727	)
Net Assets	$	2,636,636		$	32,668,851		$	1,669,726

NET ASSET VALUE PER SHARE
Shares Outstanding (no par value, unlimited shares authorized)		150,000			1,600,000			100,000
Net Asset Value	$	17.58		$	20.42		$	16.70

¹Market value of securities on loan:	$	313,239		$	1,285,176		$	7,948
²Cost of foreign currency:	$	14,406		$	—		$	66,747

See notes to financial statements.

Statements of Operations

For the period ended April 30, 2012

	IQ Hedge Multi-Strategy Tracker ETF			IQ Hedge Macro Tracker ETF			IQ Real Return ETF			IQ Global Resources ETF			IQ Merger Arbitrage ETF
Investment Income
Dividend income*	$	3,730,507		$	706,055		$	84,826		$	1,421,437		$	149,341
Interest income		6			—			—			—			22
Securities lending income, net
(Note 2)		13,150			2,395			1,759			9,930			499
Total investment income		3,743,663			708,450			86,585			1,431,367			149,862

Expenses
Advisory fees		1,209,116			241,971			96,162			520,268			173,536
Trustee fees		3,830			737			503			1,762			576
Compliance fees		1,561			308			193			700			228
Miscellaneous		58			59			59			374			58
Total expenses		1,214,565			243,075			96,917			523,104			174,398
Net investment income (loss)		2,529,098			465,375			(10,332	)		908,263			(24,536	)

Realized and Unrealized Gain (Loss)
on Investments, Swap transactions,
Futures Contracts and Foreign
Currency Translations
Net realized gain (loss) from:
Investment securities		(3,632,599	)		(1,350,336	)		(198,487	)		(12,487,957	)		(238,134	)
In-Kind redemptions		6,743,055			977,809			693,630			6,765,184			247,467
Swap transactions		(1,366,601	)		(23,794	)		—			—			—
Distributions by other investment
companies		78,616			5,418			—			—			—
Futures contracts		(1,882,294	)		(15,530	)		—			(175,358	)		(105,112	)
Foreign currency translations		—			—			—			(141,242	)		(14,637	)
Net realized gain (loss)		(59,823	)		(406,433	)		495,143			(6,039,373	)		(110,416	)
Net change in net unrealized
appreciation (depreciation) on:
Investment securities		(713,139	)		(651,985	)		16,786			(5,196,743	)		392,628
Futures contracts		230,639			58,791			—			925,613			328,605
Foreign currency translations		—			—			—			1,259			(726	)
Net change in net unrealized
appreciation (depreciation)		(482,500	)		(593,194	)		16,786			(4,269,871	)		720,507
Net realized and unrealized
gain (loss)		(542,323	)		(999,627	)		511,929			(10,309,244	)		610,091
Net Increase (Decrease) in Net Assets
Resulting from Operations	$	1,986,775		$	(534,252	)	$	501,597		$	(9,400,981	)	$	585,555

*Net of foreign taxes withheld of:	$	—		$	—		$	—		$	93,642		$	6,882

See notes to financial statements.

Statements of Operations (continued)

For the period ended April 30, 2012

	IQ Australia Small Cap ETF			IQ Canada Small Cap ETF			IQ South Korea Small Cap ETF			IQ Global Agribusiness Small Cap ETF
Investment Income
Dividend income*	$	739,115		$	620,975		$	89,847		$	713,826
Interest income		—			—			—			—
Securities lending income, net (Note 2)		2,468			4,457			—			4,400
Total investment income		741,583			625,432			89,847			718,226

Expenses
Advisory fees		160,923			346,292			95,242			327,842
Trustee fees		657			1,433			335			1,122
Compliance fees		262			612			130			476
Miscellaneous		63			61			60			35
Total expenses		161,905			348,398			95,767			329,475
Net investment income (loss)		579,678			277,034			(5,920	)		388,751

Realized and Unrealized Gain (Loss) on
Investments, Swap transactions, Futures
Contracts and Foreign Currency Translations
Net realized gain (loss) from:
Investment securities		(2,864,464	)		(4,606,141	)		(2,196,207	)		(2,551,762	)
In-Kind redemptions		118,333			(2,962,019	)		—			1,425,617
Foreign currency translations		(25,475	)		(49,464	)		(30,448	)		(45,074	)
Net realized gain (loss)		(2,771,606	)		(7,617,624	)		(2,226,655	)		(1,171,219	)
Net change in net unrealized appreciation
(depreciation) on:
Investment securities		(4,773,070	)		(14,993,791	)		(2,033,135	)		(4,996,398	)
Foreign currency translations		(9,363	)		8,070			(1,749	)		3,665
Net change in net unrealized appreciation
(depreciation)		(4,782,433	)		(14,985,721	)		(2,034,884	)		(4,992,733	)
Net realized and unrealized gain (loss)		(7,554,039	)		(22,603,345	)		(4,261,539	)		(6,163,952	)
Net Increase (Decrease) in Net Assets Resulting
from Operations	$	(6,974,361	)	$	(22,326,311	)	$	(4,267,459	)	$	(5,775,201	)

*Net of foreign taxes withheld of:	$	9,272		$	109,580		$	17,813		$	62,097

See notes to financial statements.

Statements of Operations (continued)

For the period ended April 30, 2012

	IQ Global Oil Small Cap ETF**			IQ US Real Estate Small Cap ETF**			IQ Emerging Markets Mid Cap ETF**
Investment Income
Dividend income*	$	38,018		$	557,764		$	40,998
Interest income		—			4			—
Securities lending income, net (Note 2)		137			537			12
Total investment income		38,155			558,305			41,010

Expenses
Advisory fees		14,447			75,269			13,351
Trustee fees		44			137			50
Compliance fees		16			39			23
Miscellaneous		61			45			141
Total expenses		14,568			75,490			13,565
Net investment income (loss)		23,587			482,815			27,445

Realized and Unrealized Gain (Loss) on Investments, Swap transactions, Futures Contracts and Foreign Currency Translations
Net realized gain (loss) from:
Investment securities		(80,822	)		(212,653	)		(342,489	)
In-Kind redemptions		151,812			792,669			(126,569	)
Swap transactions		—			—			(47,076	)
Foreign currency translations		(917	)		—			(5,359	)
Net realized gain (loss)		70,073			580,016			(521,493	)
Net change in net unrealized appreciation (depreciation) on:
Investment securities		(402,100	)		1,796,933			(216,855	)
Swap transactions		—			—			(15	)
Foreign currency translations		213			—			(857	)
Net change in net unrealized appreciation (depreciation)		(401,887	)		1,796,933			(217,727	)
Net realized and unrealized gain (loss)		(331,814	)		2,376,949			(739,220	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(308,227	)	$	2,859,764		$	(711,775	)

*Net of foreign taxes withheld of:	$	4,068		$	—		$	8,477

Commencement of operations for the IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid Cap ETF was May 4, 2011, June 13, 2011 and July 12, 2011, respectively.

See notes to financial statements.

Statements of Changes in Net Assets

	IQ Hedge Multi-Strategy Tracker ETF						IQ Hedge Macro Tracker ETF						IQ Real Return ETF
	For the Year Ended April 30,						For the Year Ended April 30,						For the Year Ended April 30,
	2012			2011			2012			2011			2012			2011
Increase (Decrease) in Net
Assets from Operations
Net investment income (loss)	$	2,529,098		$	2,505,702		$	465,375		$	289,455		$	(10,332	)	$	(36,642	)
Net realized gain (loss)		(59,823	)		3,268,113			(406,433	)		383,464			495,143			202,114
Net change in net unrealized
appreciation (depreciation)		(482,500	)		(1,235,296	)		(593,194	)		942,888			16,786			135,743
Net increase (decrease) in net
assets resulting from
operations		1,986,775			4,538,519			(534,252	)		1,615,807			501,597			301,215

Dividends and Distributions to
Shareholders from:
Net investment income		(2,465,773	)		(1,865,556	)		(349,947	)		(133,209	)		—			(1,985	)
Net realized gains		—			—			—			—			(70,733	)		—
Total dividends and distributions
to shareholders		(2,465,773	)		(1,865,556	)		(349,947	)		(133,209	)		(70,733	)		(1,985	)

Capital Share Transactions
Proceeds from shares created		180,656,444			166,884,050			43,686,434			38,032,383			38,986,694			12,661,434
Cost of shares redeemed		(114,838,725	)		(131,119,714	)		(20,628,831	)		(21,827,239	)		(24,689,903	)		(13,889,238	)
Net increase (decrease) from
capital share transactions		65,817,719			35,764,336			23,057,603			16,205,144			14,296,791			(1,227,804	)
Total increase (decrease) in
net assets		65,338,721			38,437,299			22,173,404			17,687,742			14,727,655			(928,574	)

Net Assets
Beginning of period		131,076,687			92,639,388			28,302,161			10,614,419			12,815,057			13,743,631
End of period	$	196,415,408		$	131,076,687		$	50,475,565		$	28,302,161		$	27,542,712		$	12,815,057
Including undistributed
(accumulated) net investment
income (loss) as follows:	$	659,666		$	729,719		$	152,347		$	48,478		$	(1,837	)	$	3,712

Changes in Shares Outstanding
Shares outstanding, beginning
of period		4,704,000			3,404,000			1,000,000			400,000			500,000			550,000
Shares created		6,550,000			6,100,000			1,600,000			1,400,000			1,500,000			500,000
Shares redeemed		(4,154,000	)		(4,800,000	)		(750,000	)		(800,000	)		(950,000	)		(550,000	)
Shares outstanding, end
of period		7,100,000			4,704,000			1,850,000			1,000,000			1,050,000			500,000

See notes to financial statements.

Statements of Changes in Net Assets (continued)

	IQ Global Resources ETF						IQ Merger Arbitrage ETF						IQ Australia Small Cap ETF
	For the Year Ended April 30,						For the Year Ended April 30,						For the Year Ended April 30,
	2012			2011			2012			2011			2012			2011
Increase (Decrease) in Net
Assets from Operations
Net investment income (loss)	$	908,263		$	335,090		$	(24,536	)	$	10,611		$	579,678		$	719,662
Net realized gain (loss)		(6,039,373	)		5,593,935			(110,416	)		(686,091	)		(2,771,606	)		1,180,666
Net change in net unrealized
appreciation (depreciation)		(4,269,871	)		2,864,190			720,507			(117,699	)		(4,782,433	)		2,671,270
Net increase (decrease) in net
assets resulting from
operations		(9,400,981	)		8,793,215			585,555			(793,179	)		(6,974,361	)		4,571,598

Dividends and Distributions to
Shareholders from:
Net investment income		(448,866	)		(167,873	)		—			(10,811	)		(1,324,792	)		(401,850	)
Net realized gains		(735,042	)		(246,632	)		—			(301,245	)		(637,635	)		(36,342	)
Total dividends and distributions
to shareholders		(1,183,908	)		(414,505	)		—			(312,056	)		(1,962,427	)		(438,192	)

Capital Share Transactions
Proceeds from shares created		78,029,100			127,436,513			13,762,318			17,793,474			5,004,467			34,516,704
Cost of shares redeemed		(79,259,307	)		(64,210,652	)		(11,249,742	)		(25,369,787	)		(23,113,382	)		(4,300,185	)
Net increase (decrease) from
capital share transactions		(1,230,207	)		63,225,861			2,512,576			(7,576,313	)		(18,108,915	)		30,216,519
Total increase (decrease) in
net assets		(11,815,096	)		71,604,571			3,098,131			(8,681,548	)		(27,045,703	)		34,349,925

Net Assets
Beginning of period		79,853,599			8,249,028			22,920,756			31,602,304			43,322,751			8,972,826
End of period	$	68,038,503		$	79,853,599		$	26,018,887		$	22,920,756		$	16,277,048		$	43,322,751
Including undistributed
(accumulated) net investment
income (loss) as follows:	$	507,525		$	189,362		$	(126,487	)	$	(50,878	)	$	44,532		$	470,327

Changes in Shares Outstanding
Shares outstanding, beginning
of period		2,400,000			300,000			900,000			1,200,000			1,400,000			350,000
Shares created		2,650,000			4,250,000			550,000			700,000			200,000			1,200,000
Shares redeemed		(2,700,000	)		(2,150,000	)		(450,000	)		(1,000,000	)		(900,000	)		(150,000	)
Shares outstanding, end
of period		2,350,000			2,400,000			1,000,000			900,000			700,000			1,400,000

See notes to financial statements.

Statements of Changes in Net Assets (continued)

	IQ Canada Small Cap ETF						IQ South Korea Small Cap ETF
	For the Year Ended April 30,						For the Year Ended April 30,
	2012			2011			2012			2011
Increase (Decrease) in Net Assets from Operations
Net investment income (loss)	$	277,034		$	182,010		$	(5,920	)	$	19,896
Net realized gain (loss)		(7,617,624	)		1,496,712			(2,226,655	)		39,988
Net change in net unrealized appreciation
(depreciation)		(14,985,721	)		6,520,343			(2,034,884	)		1,661,728
Net increase (decrease) in net assets resulting
from operations		(22,326,311	)		8,199,065			(4,267,459	)		1,721,612
Dividends and Distributions to Shareholders from:
Net investment income		(400,361	)		(468,240	)		(36,683	)		(4,475	)
Net realized gains		—			—			(143,892	)		(4,965	)
Total dividends and distributions to shareholders		(400,361	)		(468,240	)		(180,575	)		(9,440	)
Capital Share Transactions
Proceeds from shares created		6,200,746			126,075,670			5,253,526			11,914,215
Cost of shares redeemed		(72,557,289	)		(22,420,896	)		(9,643,684	)		—
Net increase (decrease) from capital share
transactions		(66,356,543	)		103,654,774			(4,390,158	)		11,914,215
Total increase (decrease) in net assets		(89,083,215	)		111,385,599			(8,838,192	)		13,626,387
Net Assets
Beginning of period		120,492,336			9,106,737			16,176,460			2,550,073
End of period	$	31,409,121		$	120,492,336		$	7,338,268		$	16,176,460
Including undistributed (accumulated) net investment
income (loss) as follows:	$	59,348		$	(94,035	)	$	(156	)	$	3,214
Changes in Shares Outstanding
Shares outstanding, beginning of period		3,400,000			350,000			500,000			100,000
Shares created		200,000			3,750,000			150,000			400,000
Shares redeemed		(2,400,000	)		(700,000	)		(350,000	)		—
Shares outstanding, end of period		1,200,000			3,400,000			300,000			500,000

See notes to financial statements.

Statements of Changes in Net Assets (continued)

	IQ Global Agribusiness Small Cap ETF						IQ Global Oil Small Cap ETF			IQ US Real Estate Small Cap ETF			IQ Emerging Markets Mid Cap ETF
	For the Year Ended April 30, 2012			For the Period March 21, 2011* to April 30, 2011			For the Period May 4, 2011* to April 30, 2012			For the Period June 13, 2011* to April 30, 2012			For the Period July 12, 2011* to April 30, 2012
Increase (Decrease) in Net Assets
from Operations
Net investment income (loss)	$	388,751		$	72,410		$	23,587		$	482,815		$	27,445
Net realized gain (loss)		(1,171,219	)		(1,715	)		70,073			580,016			(521,493	)
Net change in net unrealized
appreciation (depreciation)		(4,992,733	)		1,442,099			(401,887	)		1,796,933			(217,727	)
Net increase (decrease) in net assets
resulting from operations		(5,775,201	)		1,512,794			(308,227	)		2,859,764			(711,775	)

Dividends and Distributions to
Shareholders from:
Net investment income		(331,760	)		—			(12,378	)		(328,571	)		(23,390	)
Net realized gains		—			—			—			—			—
Total dividends and distributions
to shareholders		(331,760	)		—			(12,378	)		(328,571	)		(23,390	)

Capital Share Transactions
Proceeds from shares created		18,729,999			53,326,443			5,640,912			42,206,389			4,015,365
Cost of shares redeemed		(27,753,609	)		—			(2,683,671	)		(12,068,731	)		(1,610,474	)
Net increase (decrease) from capital
share transactions		(9,023,610	)		53,326,443			2,957,241			30,137,658			2,404,891
Total increase (decrease) in net assets		(15,130,571	)		54,839,237			2,636,636			32,668,851			1,669,726

Net Assets
Beginning of period		54,839,237			—			—			—			—
End of period	$	39,708,666		$	54,839,237		$	2,636,636		$	32,668,851		$	1,669,726
Including undistributed (accumulated)
net investment income as follows:	$	83,218		$	70,695		$	10,305		$	154,244		$	71,233

Changes in Shares Outstanding
Shares outstanding, beginning
of period		2,000,000			—			—			—			—
Shares created		750,000			2,000,000			300,000			2,250,000			200,000
Shares redeemed		(1,150,000	)		—			(150,000	)		(650,000	)		(100,000	)
Shares outstanding, end of period		1,600,000			2,000,000			150,000			1,600,000			100,000

* Commencement of operations.

See notes to financial statements.

Financial Highlights

Selected Data for a Share of Capital Stock Outstanding

	IQ Hedge Multi-Strategy Tracker ETF												IQ Hedge Macro Tracker ETF									IQ Real Return ETF
	For the Year Ended April 30,									For the Period March 24, 2009¹to April 30,			For the Year Ended April 30,						For the Period June 8 2009¹to April 30,			For the Year Ended April 30,						For the Period October 26, 2009¹to April 30,
	2012			2011			2010			2009			2012			2011			2010			2012			2011			2010
Net asset value,
beginning of period	$	27.86		$	27.21		$	25.41		$	25.00		$	28.30		$	26.54		$	25.00		$	25.63		$	24.99		$	25.00

Income from Investment
Operations
Net investment
income (loss)²		0.43			0.61			0.52			0.02			0.39			0.38			0.26			(0.01	)		(0.08	)		(0.02	)
Net realized and
unrealized gain (loss)
on investments		(0.27	)		0.45			1.51			0.39			(1.14	)		1.53			1.53			0.66			0.72			0.01
Distributions of net
realized gains by
other investment
companies		0.01			0.00	³		—			—			0.00	³		0.00	³		—			—			—			—
Net increase (decrease)
in net assets resulting
from investment
operations		0.17			1.06			2.03			0.41			(0.75	)		1.91			1.79			0.65			0.64			(0.01	)

Distributions from:
Net investment
income		(0.37	)		(0.41	)		(0.23	)		—			(0.27	)		(0.15	)		(0.25	)		—			(0.00	)⁴		—
Net realized gains		—			—			—			—			—			—			—			(0.05	)		—			—
Total distributions from
net investment income
and realized gains		(0.37	)		(0.41	)		(0.23	)		—			(0.27	)		(0.15	)		(0.25	)		(0.05	)		(0.00	)⁴		—
Net asset value, end
of period	$	27.66		$	27.86		$	27.21		$	25.41		$	27.28		$	28.30		$	26.54		$	26.23		$	25.63		$	24.99

Total Return
Total investment return
based on net
asset value⁵		0.65	%		3.95	%		8.00	%		1.64	%		(2.61	)%		7.21	%		7.16	%		2.56	%		2.58	%		(0.04	)%

Ratios/Supplemental Data
Net assets, end of
period (000’s
omitted)	$	196,415		$	131,077		$	92,639		$	11,536		$	50,476		$	28,302		$	10,614		$	27,543		$	12,815		$	13,744
Ratio to average net
assets of:
Expenses		0.75	%		0.77	%		0.77	%		0.13	%⁶		0.75	%		0.77	%		0.76	%⁷		0.48	%		0.49	%		0.50	%⁷
Net investment
income (loss)		1.57	%		2.23	%		1.93	%		0.08	%⁶		1.44	%		1.41	%		1.10	%⁷		(0.05	)%		(0.32	)%		(0.14	)%⁷
Portfolio turnover rate⁸		90	%		145	%		169	%		0	%⁹		108	%		54	%		77	%		62	%		52	%		44	%

See footnotes on page 71.

See notes to financial statements.

Financial Highlights (continued)

Selected Data for a Share of Capital Stock Outstanding

	IQ Global Resources ETF									IQ Merger Arbitrage ETF									IQ Australia Small Cap ETF
	For the Year Ended April 30,						For the Period October 26, 2009¹to April 30,			For the Year Ended April 30,						For the Period November 16, 2009¹to April 30,			For the Year Ended April 30,						For the Period March 22, 2010¹to April 30,
	2012			2011			2010			2012			2011			2010			2012			2011			2010
Net asset value, beginning
of period	$	33.27		$	27.50		$	25.00		$	25.47		$	26.34		$	25.00		$	30.94		$	25.64		$	25.00

Income from Investment
Operations
Net investment income (loss)²		0.39			0.29			0.12			(0.03	)		0.01			0.03			0.64			1.03			0.03
Net realized and unrealized gain
(loss) on investments		(4.17	)		5.78			2.42			0.58			(0.55	)		1.31			(5.71	)		4.76			0.61
Net increase (decrease) in
net assets resulting from
investment operations		(3.78	)		6.07			2.54			0.55			(0.54	)		1.34			(5.07	)		5.79			0.64

Distributions from:
Net investment income		(0.20	)		(0.12	)		(0.04	)		—			(0.01	)		(0.00	)⁴		(1.77	)		(0.45	)		—
Net realized gains		(0.34	)		(0.18	)		—			—			(0.32	)		—			(0.85	)		(0.04	)		—
Total distributions from net
investment income and
realized gains		(0.54	)		(0.30	)		(0.04	)		—			(0.33	)		(0.00	)⁴		(2.62	)		(0.49	)		—
Net asset value, end of period	$	28.95		$	33.27		$	27.50		$	26.02		$	25.47		$	26.34		$	23.25		$	30.94		$	25.64

Total Return
Total investment return based on
net asset value⁵		(11.30	)%		22.17	%		10.18	%		2.16	%		(2.03	)%		5.37	%		(15.08	)%		22.71	%		2.56	%

Ratios/Supplemental Data
Net assets, end of period
(000’s omitted)	$	68,039		$	79,854		$	8,249		$	26,019		$	22,921		$	31,602		$	16,277		$	43,323		$	8,973
Ratio to average net assets of:
Expenses		0.75	%		0.76	%		0.79	%⁷		0.75	%		0.76	%		0.77	%⁷		0.69	%		0.69	%		0.71	%⁷
Net investment income (loss)		1.31	%		0.94	%		0.93	%⁷		(0.11	)%		0.04	%		0.22	%⁷		2.49	%		3.72	%		1.09	%⁷
Portfolio turnover rate⁸		178	%		117	%		158	%		365	%		365	%		141	%		42	%		49	%		0	%⁹

See footnotes on page 71.

See notes to financial statements.

Financial Highlights (continued)

Selected Data for a Share of Capital Stock Outstanding

	IQ Canada Small Cap ETF									IQ South Korea Small Cap ETF
	For the Year Ended April 30,						For the Period March 22, 2010¹to April 30,			For the Year Ended April 30,						For the Period April 13, 2010¹to April 30,
	2012			2011			2010			2012			2011			2010
Net asset value, beginning of period	$	35.44		$	26.02		$	25.00		$	32.35		$	25.50		$	25.00
Income from Investment Operations
Net investment income (loss)²		0.16			0.14			(0.01	)		(0.01	)		0.09			(0.01	)
Net realized and unrealized gain (loss) on
investments		(9.12	)		9.75			1.03			(7.36	)		6.80			0.51
Net increase (decrease) in net assets resulting
from investment operations		(8.96	)		9.89			1.02			(7.37	)		6.89			0.50
Distributions from:
Net investment income		(0.31	)		(0.47	)		—			(0.11	)		(0.02	)		—
Net realized gains		—			—			—			(0.41	)		(0.02	)		—
Total distributions from net investment income
and realized gains		(0.31	)		(0.47	)		—			(0.52	)		(0.04	)		—
Net asset value, end of period	$	26.17		$	35.44		$	26.02		$	24.46		$	32.35		$	25.50
Total Return
Total investment return based on net asset value⁵		(25.24	)%		38.15	%		4.08	%		(22.87	)%		27.04	%		2.00	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)	$	31,409		$	120,492		$	9,107		$	7,338		$	16,176		$	2,550
Ratio to average net assets of:
Expenses		0.69	%		0.69	%		0.71	%⁷		0.79	%		0.80	%		0.79	%⁷
Net investment income (loss)		0.55	%		0.44	%		(0.20	)%⁷		(0.05	)%		0.31	%		(0.79	)%⁷
Portfolio turnover rate⁸		37	%		52	%		0	%		99	%		73	%		1	%

See footnotes on page 71.

See notes to financial statements.

Financial Highlights (continued)

Selected Data for a Share of Capital Stock Outstanding

	IQ Global Agribusiness Small Cap ETF						IQ Global Oil Small Cap ETF			IQ US Real Estate Small Cap ETF			IQ Emerging Markets Mid Cap ETF
	For the Year Ended April 30, 2012			For the Period March 21, 2011¹ to April 30, 2011			For the Period May 4, 2011¹ to April 30, 2012			For the Period June 13, 2011¹ to April 30, 2012			For the Period July 12, 2011¹ to April 30, 2012
Net asset value, beginning of period	$	27.42		$	25.40		$	19.56		$	19.91		$	19.67

Income from Investment Operations
Net investment income²		0.22			0.06			0.21			0.73			0.21
Net realized and unrealized gain (loss)
on investments		(2.61	)		1.96			(2.07	)		0.37			(2.95	)
Net increase (decrease) in net assets resulting
from investment operations		(2.39	)		2.02			(1.86	)		1.10			(2.74	)

Distributions from:
Net investment income		(0.21	)		—			(0.12	)		(0.59	)		(0.23	)
Net realized gains		—			—			—			—			—
Total distributions from net investment income
and realized gains		(0.21	)		—			(0.12	)		(0.59	)		(0.23	)
Net asset value, end of period	$	24.82		$	27.42		$	17.58		$	20.42		$	16.70

Total Return
Total investment return based on net
asset value⁵		(8.64	)%		7.95	%		(9.40	)%		6.05	%		(13.74	)%

Ratios/Supplemental Data
Net assets, end of period (000's omitted)	$	39,709		$	54,839		$	2,637		$	32,669		$	1,670
Ratio to average net assets of:
Expenses		0.75	%		0.75	%⁷		0.75	%⁷		0.69	%⁷		0.76	%⁷
Net investment income (loss)		0.89	%		1.96	%⁷		1.22	%⁷		4.43	%⁷		1.54	%⁷
Portfolio turnover rate⁸		26	%		0	%		10	%		11	%		72	%

Commencement of operations.

Based on average shares outstanding.

Less than $0.005 per share.

Greater than $(0.005) per share.

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. Total returns may reflect adjustments to conform to generally accepted accounting principles.

Not annualized.

Annualized.

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.

Portfolio turnover rate for the period was greater than 0% yet less than 0.5%

See notes to financial statements.

Notes to Financial Statements

April 30, 2012

1. ORGANIZATION

IndexIQ ETF Trust (the “Trust”) was organized as a Delaware statutory trust on July 1, 2008 and is registered with the Securities and Exchange Commission (“SEC”) as a non-diversified, open-end, management investment company, as defined by the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust is currently comprised of twelve active funds (collectively, the “Funds” and each individually, a “Fund”): IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF, IQ Real Return ETF, IQ Global Resources ETF, IQ Merger Arbitrage ETF, IQ Australia Small Cap ETF, IQ Canada Small Cap ETF, IQ South Korea Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid Cap ETF. The Funds are exchange-traded funds (“ETFs”), whose shares are listed on a stock exchange and traded like equity securities at market prices. The IQ Hedge Multi-Strategy Tracker ETF commenced operations on March 24, 2009; IQ Hedge Macro Tracker ETF commenced operations on June 8, 2009; IQ Real Return ETF and IQ Global Resources ETF commenced operations on October 26, 2009; IQ Merger Arbitrage ETF commenced operations on November 16, 2009; IQ Australia Small Cap ETF and IQ Canada Small Cap ETF commenced operations on March 22, 2010; IQ South Korea Small Cap ETF commenced operations on April 13, 2010; IQ Global Agribusiness Small Cap ETF commenced operations on March 21, 2011; IQ Global Oil Small Cap ETF commenced operations on May 4, 2011; IQ US Real Estate Small Cap ETF commenced operations on June 13, 2011 and IQ Emerging Markets Mid Cap ETF commenced operations on July 12, 2011.

IQ Hong Kong Small Cap ETF, IQ Japan Mid Cap ETF and IQ Taiwan Small Cap ETF were liquidated on December 29, 2011.

The investment objective of the IQ Hedge Multi-Strategy Tracker ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Hedge Multi-Strategy Index, developed by Financial Development Holdco LLC (“IndexIQ”), the parent company of IndexIQ Advisors, LLC (the “Advisor”), the Funds’ investment advisor. The objective of the IQ Hedge Multi-Strategy Index is to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of hedge funds that employ various hedge fund investment styles, which may include but are not limited to global macro, long/short, event-driven, market neutral, emerging markets, fixed-income arbitrage and other strategies commonly used by hedge fund managers.

The investment objective of the IQ Hedge Macro Tracker ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Hedge Macro Index, developed by IndexIQ. The objective of the IQ Hedge Macro Index is to track the “beta” portion of the returns (i.e., that portion of the returns of hedge funds that are non-idiosyncratic, or unrelated to manager skill) of a combination of hedge funds pursuing a macro strategy and hedge funds pursuing an emerging markets strategy.

The investment objective of the IQ Real Return ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Real Return Index, developed by IndexIQ. The objective of the IQ Real Return Index is to provide investors with 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, a leading government measure of inflation in the U.S. economy.

The investment objective of the IQ Global Resources ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Global Resources Index, developed by IndexIQ. The objective of the IQ Global Resources Index is to use 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 investment objective of the IQ Merger Arbitrage ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Merger Arbitrage Index, developed by IndexIQ. The objective of the IQ Merger Arbitrage Index is to seek to identify investment opportunities in the acquisition and merger market segment globally.

The investment objective of the IQ Australia Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Australia Small Cap Index, developed by IndexIQ. The objective of the IQ Australia Small Cap Index is to track the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in Australia.

Notes to Financial Statements (continued)

April 30, 2012

The investment objective of the IQ Canada Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Canada Small Cap Index, developed by IndexIQ. The objective of the IQ Canada Small Cap Index is to track the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in Canada.

The investment objective of the IQ South Korea Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ South Korea Small Cap Index, developed by IndexIQ. The objective of the IQ South Korea Small Cap Index is to track the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in South Korea.

The investment objective of the IQ Global Agribusiness Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Global Agribusiness Small Cap Index, developed by IndexIQ. The objective of the IQ Global Agribusiness Small Cap Index is to track the overall performance of the global small capitalization sector of publicly traded companies engaged in the agribusiness sector.

The investment objective of the IQ Global Oil Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Global Oil Small Cap Index, developed by IndexIQ. The objective of the IQ Global Oil Small Cap Index is to track the overall performance of the 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 investment objective of the IQ US Real Estate Small Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ US Real Estate Small Cap Index, developed by IndexIQ. The objective of the IQ US Real Estate Small Cap Index is to track the overall performance of the small capitalization U.S. real estate companies.

The investment objective of the IQ Emerging Markets Mid Cap ETF is to seek investment results that correspond, before fees and expenses, generally to the price and yield performance of the IQ Emerging Markets Mid Cap Index, developed by IndexIQ. The objective of the IQ Emerging Markets Mid Cap Index is to track the overall performance of the mid capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in the emerging markets.

2. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

These financial statements are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of increases and decreases in the net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds:

Indemnification

In the normal course of business, the Funds may enter into contracts that contain a variety of representations which provide general indemnifications for certain liabilities. Each Fund’s maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

Investment Valuation

The Net Asset Value (“NAV”) of each Fund is determined as of the close of trading (generally, 4:00 PM Eastern Time) on each day the New York Stock Exchange Arca (“NYSE”) is open for trading. NAV per share is calculated by dividing a fund’s net assets by the number of fund shares outstanding. Securities, investment funds and futures traded on any recognized national or foreign stock exchange are valued at the last quoted sale price, or if no sale price is available, at the bid price. Securities not listed on a national or foreign stock exchange may be valued on the basis of prices furnished by approved pricing services or at the closing bid price on the over-the-counter market.

Notes to Financial Statements (continued)

April 30, 2012

If market quotations are not readily available, or if it is determined that a quotation of a security does not represent fair value, then the security is valued at a fair value as determined in good faith using procedures adopted by the Trust’s Board of Trustees (the “Board”). Market prices may not represent fair value, for example, if a security is thinly traded or if an event occurs between the market quotation and the time the security is to be valued which is expected to affect the value of the security. The circumstances in which the Board may fair value a security include, among others: the occurrence of events that are significant to a particular issuer, such as mergers, restructurings or defaults; the occurrence of events that are significant to an entire market, such as natural disasters in a particular region or government actions; trading restrictions on securities; thinly traded securities; and market events such as trading halts and early market closings. Short-term securities with 60 days or less remaining to maturity are valued using the amortized cost method, which approximates current market value. Investments in open end regulated investment companies are valued at net asset value. Price information on ETFs is taken from the exchange where the security is primarily traded.

Fair Value Measurement

Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and requires disclosure about fair value measurements. It also provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or liability, when a transaction is not orderly, and how that information must be incorporated into fair value measurement. Under ASC 820, various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in the following hierarchy:

•

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.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

All other securities and investments for which market values are not readily available, including restricted securities, and those securities for which it is inappropriate to determine prices in accordance with the aforementioned procedures, are valued at fair value as determined in good faith under procedures adopted by the Trustees, although the actual calculations may be done by others. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

Transfers between levels, if any, are considered to have occurred at the beginning of the reporting period. There were no transfers between Level 1 and Level 2 during the year ended April 30, 2012. Level 3 transfers and the reasons for these transfers are detailed in the Level 3 reconciliation.

Notes to Financial Statements (continued)

April 30, 2012

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following summarizes inputs used as of April 30, 2012 in valuing the Funds’ assets and liabilities carried at fair value:

	Level 1			Level 2		Level 3			Total
IQ Hedge Multi-Strategy Tracker ETF
Assets
Investment Companies*	$	164,110,652		$	—	$	—		$	164,110,652
Other Financial Instruments**		193,227			—		—			193,227
Short-Term Investments		50,722,193			—		—			50,722,193
Total	$	215,026,072		$	—	$	—		$	215,026,072
Liabilities
Other Financial Instruments**		(136,631	)		—		—			(136,631	)
Total	$	(136,631	)	$	—	$	—		$	(136,631	)

IQ Hedge Macro Tracker ETF
Assets
Investment Companies*	$	47,950,575		$	—	$	—		$	47,950,575
Other Financial Instruments**		3,760			—		—			3,760
Short-Term Investments		8,958,945			—		—			8,958,945
Total	$	56,913,280		$	—	$	—		$	56,913,280
Liabilities
Other Financial Instruments**		(13,366	)		—		—			(13,366	)
Total	$	(13,366	)	$	—	$	—		$	(13,366	)
IQ Real Return ETF
Assets
Investment Companies*	$	27,546,015		$	—	$	—		$	27,546,015
Short-Term Investments		3,250,343			—		—			3,250,343
Total	$	30,796,358		$	—	$	—		$	30,796,358
IQ Global Resources ETF
Assets
Common Stocks^†	$	60,701,625		$	—	$	—		$	60,701,625
Other Financial Instruments**		108,495			—		—			108,495
Short-Term Investments		8,760,489			—		—			8,760,489
Total	$	69,570,609		$	—	$	—		$	69,570,609
Liabilities
Other Financial Instruments**		(14,930	)		—		—			(14,930	)
Total	$	(14,930	)	$	—	$	—		$	(14,930	)
IQ Merger Arbitrage ETF
Assets
Common Stocks*	$	20,660,022		$	—	$	—		$	20,660,022
Other Financial Instruments**		22,889			—		—			22,889
Short-Term Investments		5,809,462			—		—			5,809,462
Total	$	26,492,373		$	—	$	—		$	26,492,373
Liabilities
Other Financial Instruments**		(3,289	)		—		—			(3,289	)
Total	$	(3,289	)	$	—	$	—		$	(3,289	)
IQ Australia Small Cap ETF
Assets
Common Stocks*	$	16,281,506		$	—	$	—	***	$	16,281,506
Short-Term Investment		1,498,535			—		—			1,498,535
Total	$	17,780,041		$	—	$	—		$	17,780,041

Notes to Financial Statements (continued)

April 30, 2012

	Level 1		Level 2			Level 3			Total
IQ Canada Small Cap ETF
Assets
Common Stocks*	$	31,178,248	$	—		$	—		$	31,178,248
Short-Term Investment		5,656,632		—			—			5,656,632
Total	$	36,834,880	$	—		$	—		$	36,834,880
IQ South Korea Small Cap ETF
Assets
Common Stocks*	$	7,259,058	$	—		$	—		$	7,259,058
Rights*		—		4,128			—			4,128
Short-Term Investment		527		—			—			527
Total	$	7,259,585	$	4,128		$	—		$	7,263,713
IQ Global Agribusiness Small Cap ETF
Assets
Common Stocks^†	$	39,480,700	$	—		$	—	***	$	39,480,700
Short-Term Investment		1,071,961		—			—			1,071,961
Total	$	40,552,661	$	—		$	—		$	40,552,661
IQ Global Oil Small Cap ETF
Assets
Common Stocks^†	$	2,595,513	$	—		$	—		$	2,595,513
Warrant^†		—		—	‡		—			—
Short-Term Investment		344,122		—			—			344,122
Total	$	2,939,635	$	—		$	—		$	2,939,635
IQ US Real Estate Small Cap ETF
Assets
Common Stocks*	$	32,589,365	$	—		$	—		$	32,589,365
Short-Term Investments		1,395,272		—			—			1,395,272
Total	$	33,984,637	$	—		$	—		$	33,984,637
IQ Emerging Markets Mid Cap ETF
Assets
Common Stocks^†	$	1,621,026	$	—		$	—		$	1,621,026
Right^†		—		666			—			666
Other Financial Instruments**		—		29			—			29
Short-Term Investment		8,360		—			—			8,360
Total	$	1,629,386	$	695		$	—		$	1,630,081
Liabilities
Other Financial Instruments**		—		(44	)		—			(44	)
Total	$	—	$	(44	)	$	—		$	(44	)

Please refer to the Schedule of Investments to view securities segregated by industry type.

Derivative instruments, including swap transactions and futures contracts, are recorded at the net unrealized appreciation (depreciation) on the instrument.

***

Includes Level 3 security valued at $0.

†

Please refer to the Schedule of Investments to view securities segregated by country.

‡

Includes Level 2 security valued at $0.

Notes to Financial Statements (continued)

April 30, 2012

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value. All transfers in or out of Level 3 are done using the beginning of period method.

IQ Global Agribusiness Small Cap ETF	Common Stock
Balance as of April 30, 2011	$	—
Transfer into Level 3^(a)		1,790,699
Purchases		90,965
Sales		(453,559	)
Realized gain (loss)		(872,098	)
Change in unrealized depreciation		(556,007	)
Balance as of April 30, 2012	$	—
Net change in unrealized appreciation/depreciation from investments
still held as of April 30, 2012 was:	$	(549,087	)

(a)

Transfers into Level 3 are the results of the unavailability of a quoted price in a active market or the unavailability of other significant observable inputs.

Tax Information, Dividends and Distributions to Shareholders and Uncertain Tax Positions

Each Fund intends to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended (“the Code”), by distributing substantially all of its net investment income and net realized gains to shareholders. Certain Funds also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends’ paid deduction. Net investment income and net capital gains, if any, are typically distributed to shareholders at least annually. Dividends may be declared and paid more frequently to improve index tracking or to comply with the distribution requirements of the Code. In addition, the Funds may determine to distribute at least annually amounts representing the full dividend yield net of expenses on the underlying investment securities, as if the Funds owned the underlying investment securities for the entire dividend period in which case some portion of each distribution may result in a return of capital. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with Federal income tax regulations which may differ from U.S. GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets based on their Federal tax basis treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profit for tax purposes are reported as a tax return of capital.

Management evaluates tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as an expense in the current year. The Funds have concluded that there is no tax liability resulting from uncertain income tax positions taken or expected to be taken. The Funds are required to analyze all open tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. The returns of the Funds for the period from commencement of operations through April 30, 2012 are open for examination.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments, with maturities of three months or less when acquired.

Security Transactions

Security transactions are recorded as of the trade date. Realized gains and losses on sales of investment securities are calculated using the identified cost method.

Foreign Currency Translation

The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the prevailing exchange rates of such currencies against the U.S. dollar. The market value of investment securities and the other assets and liabilities are translated at the exchange rate as of the valuation date. Purchases and sales of investment securities, income and expenses are translated at the exchange rate prevailing on the respective dates of such transactions.

Notes to Financial Statements (continued)

April 30, 2012

Although the net assets of the Funds are presented at the foreign exchange rates and market values at the close of the period, the Funds do not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held or sold during the period. Accordingly, such foreign currency gains/(losses) are included in the reported net realized and unrealized gains/(losses) on investment transactions.

Reported realized foreign currency gains or losses arise from the disposition of foreign currency, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on each Fund’s books on the transaction date and the U.S. dollar equivalent of the amounts actually received or paid. Unrealized foreign exchange gains and losses arise from changes (due to the changes in the exchange rate) in the value of foreign currency and other assets and liabilities denominated in foreign currencies, which are held at period end.

Securities Lending

Each Fund may lend portfolio securities to certain creditworthy borrowers, including the Funds’ securities lending agent. It is the Funds’ policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral in the form of cash and /or high grade debt obligations, equivalent to at least 100% of the market value of securities loaned, is maintained at all times. The collateral can be invested in certain money market mutual funds which also have exposure to the fluctuations of the market. Each Fund receives compensation for lending its securities from interest or dividends earned on the cash or U.S. government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. The dividend and interest income earned on the securities loaned is accounted for in the same manner as other dividend and interest income. The borrower pays to the Funds an amount equal to any dividends or interest received on loaned securities. Lending portfolio securities could result in a loss or delay in recovering the Fund’s securities if the borrower defaults.

The securities lending income earned by the Funds is disclosed on the Statements of Operations. The value of loaned securities and related collateral outstanding at April 30, 2012 are shown in the Schedules of Investments and Statements of Assets and Liabilities.

Investment Income and Expenses

Dividend income is recognized on the ex-dividend date. Interest income is accrued daily. The Funds’ investment income, expenses and unrealized and realized gains and losses are allocated daily. The Funds distribute substantially all of their net investment income to shareholders in the form of dividends. Distributions of realized capital gains by underlying funds are recorded as realized capital gains on the ex-date.

Recent Accounting Pronouncements

In May 2011, the International Accounting Standards Board (“FASB”) and the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. Management is currently evaluating the implications of ASU 2011-04 and its impact on the Funds’ financial statements.

Notes to Financial Statements (continued)

April 30, 2012

3. INVESTMENT MANAGEMENT AND OTHER AGREEMENTS

Advisory Agreement

Under the terms of the Investment Advisory Agreement (the “Advisory Agreement”) the Funds pay the Advisor an advisory fee, based on of the average daily net assets of each Fund, at the following annual rates:

Fund		Rate
IQ Hedge Multi-Strategy Tracker ETF		0.75%
IQ Hedge Macro Tracker ETF		0.75%
IQ Real Return ETF		0.48%
IQ Global Resources ETF		0.75%
IQ Merger Arbitrage ETF		0.75%
IQ Australia Small Cap ETF		0.69%
IQ Canada Small Cap ETF		0.69%
IQ South Korea Small Cap ETF		0.79%
IQ Global Agribusiness Small Cap ETF		0.75%
IQ Global Oil Small Cap ETF		0.75%
IQ US Real Estate Small Cap ETF		0.69%
IQ Emerging Markets Mid Cap ETF		0.75%

Such fee is accrued daily and paid monthly. On May 19, 2011, the sub-advisory agreement between the Advisor and Esposito Partners, LLC (“Esposito”), pursuant to which Esposito acted as sub-advisor to the IQ Merger Arbitrage ETF, was terminated, and the Advisor assumed day-to-day portfolio management responsibility for the Fund.

The Advisor has agreed to pay all expenses of the Funds, except brokerage and other transaction expenses; extraordinary legal fees or expenses, such as those for litigation or arbitration; compensation and expenses of the Independent Trustees, counsel to the Independent Trustees, and the Funds’ chief compliance officer; extraordinary expenses; distribution fees and expenses paid by the Funds under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act; and the advisory fee payable to the Advisor hereunder.

Distribution

ALPS Distributors, Inc. serves as the Funds’ distributor (the “Distributor”) pursuant to a Distribution Services Agreement. The Trust has adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act (“Rule 12b-1 Plan”). In accordance with the Rule 12b-1 Plan, the Funds are authorized to pay an amount up to 0.10% of each Fund’s average daily net assets each year for certain distribution-related activities. As authorized by the Board of Trustees of the Trust, no Rule 12b-1 fees are currently paid by the Funds and there are no plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, they will be paid out of each Fund’s assets. The Advisor and its affiliates may, out of their own resources, pay amounts to third parties for distribution or marketing services on behalf of the Funds.

Administrator, Custodian and Transfer Agent

The Bank of New York Mellon (in each capacity, the “Administrator,” “Custodian” or “Transfer Agent”) serves as the Funds’ Administrator, Custodian and Transfer Agent pursuant to the Fund Administration and Accounting Agreement. Under the terms of this agreement, the Advisor pays the Funds’ Administrative, Custody and Transfer Agency fees. The Bank of New York Mellon is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company.

4. ORGANIZATIONAL AND OFFERING COSTS

Expenses incurred in connection with organizing and the offering of the Trust and the Funds were paid by the Advisor. The Funds do not have an obligation to reimburse the Advisor or its affiliates for organizational and offering expenses paid on their behalf.

5. CAPITAL SHARE TRANSACTIONS

As of April 30, 2012, there was an unlimited number of no par value shares of beneficial interest authorized by the Trust. Shares are created and redeemed on a continuous basis at NAV only in groups of 50,000 shares called Creation Units. Except when aggregated in Creation Units, shares are not redeemable. Transactions in shares of

Notes to Financial Statements (continued)

April 30, 2012

the Funds are disclosed in detail in the Statements of Changes in Net Assets. Only “Authorized Participants” may purchase or redeem shares directly from the Funds. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of National Securities Clearing Corporation or (ii) a Depository Trust Company (“DTC”) participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors will not qualify as Authorized Participants or have the resources to create and redeem whole Creation Units. Therefore, they will be unable to purchase or redeem the shares directly from the Funds. Rather, most retail investors will purchase shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees.

6. FEDERAL INCOME TAX

At April 30, 2012, the cost of investments on a tax basis was as follows:

Fund	Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Net Unrealized Appreciation/ (Depreciation)
IQ Hedge Multi-Strategy Tracker ETF	$	212,327,992	$	2,595,006	$	90,153	$	2,504,853
IQ Hedge Macro Tracker ETF		56,177,873		757,873		26,226		731,647
IQ Real Return ETF		30,694,739		161,110		59,491		101,619
IQ Global Resources ETF		71,202,745		1,237,053		2,977,684		(1,740,631	)
IQ Merger Arbitrage ETF		25,708,243		875,368		114,127		761,241
IQ Australia Small Cap ETF		20,107,702		968,319		3,295,979		(2,327,660	)
IQ Canada Small Cap ETF		45,563,816		1,021,447		9,750,383		(8,728,936	)
IQ South Korea Small Cap ETF		7,830,684		697,816		1,264,787		(566,971	)
IQ Global Agribusiness Small Cap ETF		44,193,683		1,625,487		5,266,508		(3,641,021	)
IQ Global Oil Small Cap ETF		3,342,190		77,377		479,932		(402,555	)
IQ US Real Estate Small Cap ETF		32,191,119		2,265,911		472,393		1,793,518
IQ Emerging Markets Mid Cap ETF		1,851,236		47,392		268,576		(221,184	)

The differences between book and tax basis cost of investments and net unrealized appreciation (depreciation) are primarily attributable to wash sale loss deferrals, pass through investments and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies held at April 30, 2012.

At April 30, 2012, the components of earnings/loss on a tax-basis were as follows:

Fund	Undistributed Net Investment Income			Undistributed Capital and Other Losses			Net Unrealized Appreciation/ (Depreciation)			Total Earnings/ (Losses)
IQ Hedge Multi-Strategy Tracker ETF	$	509,353		$	(15,307,015	)	$	2,504,853		$	(12,292,809	)
IQ Hedge Macro Tracker ETF		126,609			(2,082,246	)		731,647			(1,223,990	)
IQ Real Return ETF		(11,260	)		(99,001	)		101,619			(8,642	)
IQ Global Resources ETF		507,665			(11,423,174	)		(1,738,280	)		(12,653,789	)
IQ Merger Arbitrage ETF		24,413			(1,628,637	)		761,516			(842,708	)
IQ Australia Small Cap ETF		254,721			(2,974,341	)		(2,327,629	)		(5,047,249	)
IQ Canada Small Cap ETF		237,082			(7,369,122	)		(8,720,332	)		(15,852,372	)
IQ South Korea Small Cap ETF		—			(2,054,570	)		(566,563	)		(2,621,133	)
IQ Global Agribusiness Small Cap ETF		134,721			(2,516,990	)		(3,636,919	)		(6,019,188	)
IQ Global Oil Small Cap ETF		10,760			(80,835	)		(402,342	)		(472,417	)
IQ US Real Estate Small Cap ETF		154,244			(208,167	)		1,793,518			1,739,595
IQ Emerging Markets Mid Cap ETF		75,558			(462,101	)		(222,053	)		(608,596	)

The differences between book and tax basis components of net assets are primarily attributable to wash sale loss deferrals and other book and tax differences including foreign currency contracts, swap contracts and post-October losses.

Notes to Financial Statements (continued)

April 30, 2012

At April 30, 2012, the effect of permanent book/tax reclassifications resulted in increases(decreases) to the components of net assets as follows:

Fund	Undistributed Net Investment Income/ (Accumulated Net Investment Loss)			Accumulated Net Realized Gain/(Loss) on Investments			Paid-in Capital
IQ Hedge Multi-Strategy Tracker ETF	$	(133,378	)	$	(6,453,193	)	$	6,586,571
IQ Hedge Macro Tracker ETF		(11,559	)		(848,397	)		859,956
IQ Real Return ETF		4,783			(604,937	)		600,154
IQ Global Resources ETF		(141,234	)		(6,158,240	)		6,299,474
IQ Merger Arbitrage ETF		(51,073	)		(196,265	)		247,338
IQ Australia Small Cap ETF		319,319			(186,274	)		(133,045	)
IQ Canada Small Cap ETF		276,710			3,009,351			(3,286,061	)
IQ South Korea Small Cap ETF		39,233			25,423			(64,656	)
IQ Global Agribusiness Small Cap ETF		(44,468	)		(1,380,553	)		1,425,021
IQ Global Oil Small Cap ETF		(904	)		(150,908	)		151,812
IQ US Real Estate Small Cap ETF		0			(791,598	)		791,598
IQ Emerging Markets Mid Cap ETF		67,178			59,391			(126,569	)

For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to the tax treatment of net operating losses, distribution reclassifications and foreign currency reclassifications.

The tax character of distributions paid during the years ended April 30, 2012 and 2011 were as follows:

	2012				2011
Fund	Ordinary Income		Long-Term Capital Gains		Ordinary Income		Long-Term Capital Gains
IQ Hedge Multi-Strategy Tracker ETF	$	2,465,773	$	—	$	1,865,556	$	—
IQ Hedge Macro Tracker ETF		349,947		—		133,209		—
IQ Real Return ETF		—		70,733		1,985		—
IQ Global Resources ETF		1,183,908		—		414,505		—
IQ Merger Arbitrage ETF		—		—		312,056		—
IQ Australia Small Cap ETF		1,908,146		54,281		438,192		—
IQ Canada Small Cap ETF		400,361		—		468,240		—
IQ South Korea Small Cap ETF		180,575		—		9,440		—
IQ Global Agribusiness Small Cap ETF		331,760		—		—		—
IQ Global Oil Small Cap ETF		12,378		—		—		—
IQ US Real Estate Small Cap ETF		328,571		—		—		—
IQ Emerging Markets Mid Cap ETF		23,390		—		—		—

Notes to Financial Statements (continued)

April 30, 2012

Capital losses incurred after October 31 (“Post-October Losses”) and certain late year ordinary income losses within the taxable year can be deemed to arise on the first business day of the Funds’ next taxable year. For the year ended April 30, 2012, the Funds incurred and elected to defer to May 1, 2012 post-October losses and late year ordinary losses of:

Fund	Late Year Ordinary Losses		Post-October Capital Losses
IQ Hedge Multi-Strategy Tracker ETF	$	—	$	4,376,700
IQ Hedge Macro Tracker ETF		—		1,070,921
IQ Real Return ETF		11,260		20,641
IQ Global Resources ETF		—		3,368,295
IQ Merger Arbitrage ETF		—		157,684
IQ Australia Small Cap ETF		—		1,510,262
IQ Canada Small Cap ETF		—		1,441,889
IQ South Korea Small Cap ETF		—		419,230
IQ Global Agribusiness Small Cap ETF		—		744,384
IQ Global Oil Small Cap ETF		—		40,965
IQ US Real Estate Small Cap ETF		—		190,225
IQ Emerging Markets Mid Cap ETF		—		275,249

On December 22, 2010, the Regulated Investment Company (“RIC”) Modernization Act of 2010 (the “Act”) was enacted. The Act modernizes several of the federal income and excise tax provisions related to RICs, and, with certain exceptions, is effective for taxable years beginning after December 22, 2010. Among the changes made are changes to the capital loss carryforward rules allowing for RICs to carry forward capital losses indefinitely and to retain the character of capital loss carryforwards as short-term or long-term. Rules in effect previously limited the carryforward period to eight years and all carryforwards were considered short-term in character. Capital loss carryforwards generated in taxable years beginning after the effective date of the Act must be fully used before capital loss carryforwards generated in taxable years prior to the effective date of the Act; therefore, under certain circumstances, capital loss carryforwards available as of the report date, if any, may expire unused.

At April 30, 2012, the Funds listed below had net capital loss carryforwards for Federal income tax purposes which are available for offset against future taxable net capital gains. The amounts were determined after adjustments for certain differences between financial reporting and tax purposes, such as wash sale losses. Accordingly, no capital gain distributions are expected to be paid to shareholders of these Funds until future net capital gains have been realized in excess of the available capital loss carryforwards. There is no assurance that any Fund will be able to utilize all of its capital loss carryforwards before they expire. For the year ended April 30, 2012, there were no capital loss carryforwards utilized or expired. These loss carryforwards expire in amounts and fiscal years as follows:

Fund	April 30, 2018		April 30, 2019		Short-Term Post-Effective No Expiration		Long-Term Post-Effective No Expiration
IQ Hedge Multi-Strategy Tracker ETF	$	841,667	$	5,603,304	$	4,169,832	$	315,512
IQ Hedge Macro Tracker ETF		80,017		531,209		400,099		—
IQ Real Return ETF		—		—		78,360		—
IQ Global Resources ETF		—		—		8,054,879		—
IQ Merger Arbitrage ETF		—		971,183		355,189		144,581
IQ Australia Small Cap ETF		—		—		1,089,836		374,243
IQ Canada Small Cap ETF		—		161,421		5,765,812		—
IQ South Korea Small Cap ETF		—		—		1,635,340		—
IQ Global Agribusiness Small Cap ETF		—		—		1,772,606		—
IQ Global Oil Small Cap ETF		—		—		39,870		—
IQ US Real Estate Small Cap ETF		—		—		17,942		—
IQ Emerging Markets Mid Cap ETF		—		—		186,852		—

Notes to Financial Statements (continued)

April 30, 2012

7. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short-term investments) for the period ended April 30, 2012 are as follows:

Fund	Purchases		Sales		Purchases In-Kind		Sales In-Kind
IQ Hedge Multi-Strategy Tracker ETF	$	122,300,647	$	139,867,718	$	172,704,308	$	105,531,663
IQ Hedge Macro Tracker ETF		39,087,133		34,822,284		33,378,780		15,770,340
IQ Real Return ETF		12,455,692		12,572,493		36,356,603		22,017,426
IQ Global Resources ETF		113,971,878		111,480,668		71,199,486		74,674,566
IQ Merger Arbitrage ETF		71,254,826		67,376,423		6,707,528		8,746,063
IQ Australia Small Cap ETF		10,327,746		10,041,712		2,437,052		21,609,897
IQ Canada Small Cap ETF		23,019,030		19,651,292		1,623,973		70,873,396
IQ South Korea Small Cap ETF		11,733,072		16,019,323		—		—
IQ Global Agribusiness Small Cap ETF		23,358,402		11,532,996		3,936,652		24,627,147
IQ Global Oil Small Cap ETF		593,678		194,641		4,714,203		2,186,491
IQ US Real Estate Small Cap ETF		3,534,780		1,630,328		39,177,738		10,666,045
IQ Emerging Markets Mid Cap ETF		2,965,311		1,594,316		1,596,249		658,437

8. DERIVATIVE FINANCIAL INSTRUMENTS

Futures Contracts

Certain Funds may invest in futures contracts (“futures”) in order to replicate exposures to their respective underlying index components. Investments in futures may increase or leverage exposure to a particular market risk, thereby increasing price volatility of derivative instruments a Fund holds. No price is paid or received by a Fund upon the purchase of a futures contract. Initially, a Fund will be required to deposit with the broker an amount of cash or cash equivalents, known as initial margin, based on the value of the contract. Subsequent payments, called variation margin, to and from the broker, will be made on a daily basis as the price of the underlying instruments fluctuate making the long and short positions in the futures contract more or less valuable, a process known as ‘marking-to-the-market.’ Once a final determination of variation margin is made, additional cash is required to be paid by or released to a Fund, and a Fund will realize a loss or gain. During the period, the IQ Merger Arbitrage ETF and IQ Global Resources ETF utilized futures contracts to effect short exposure to U.S. and international equity returns, while the IQ Hedge Multi-Strategy ETF and IQ Hedge Macro Tracker ETF utilized futures to effect short exposure to U.S. small cap equity returns, international developed and emerging markets equity returns, international currency returns and commodity returns.

The open futures contracts at April 30, 2012 are listed in the Schedules of Investments. The variation margin receivable or payable, as applicable, is included in the Statements of Assets and Liabilities.

Swap Transactions

A swap agreement is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indexes, reference rates, currencies or other instruments. Most swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Funds’ obligations or rights under a swap agreement entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each counterparty. Swap agreements are not entered into or traded on exchanges and there is no central clearing or guaranty function for swaps. Therefore, swaps are subject to credit risk or the risk of default or non-performance by the counterparty. Swaps could result in losses if interest rate or foreign currency exchange rates or credit quality changes are not correctly anticipated by the Funds or if the reference index, security or investments do not perform as expected.

When the Funds have an unrealized loss on a swap agreement, the Funds have instructed the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate.

Notes to Financial Statements (continued)

April 30, 2012

Certain Funds use total return swaps to achieve the same exposures as their underlying index components. Total return swaps give the Funds the right to receive the appreciation in the value of a specified security, index or other instrument in return for a fee paid to the counterparty, which will typically be an agreed upon interest rate. Total return swaps can also be used to replicate an exposure to a short position in an asset class where a Fund has the right to receive the depreciation in value of a specified security, index or other instrument. If the underlying asset in a total return swap declines over the term of the swap, a Fund may also be required to pay the dollar value of that to the counterparty. The Funds segregate or receive liquid assets, which may include securities, cash, or cash equivalents, to cover the daily marked-to-market net obligations under outstanding swap agreements. During the period, the IQ Hedge Multi-Strategy Tracker ETF and IQ Emerging Markets Mid Cap ETF utilized swaps to effect short exposure to the real estate asset class, and the IQ Hedge Multi-Strategy Tracker ETF utilized swaps to effect long exposure to the convertible bond asset class and mid-term volatility asset class and the IQ Hedge Macro Tracker ETF utilized swaps to effect long exposure to the mid-term volatility asset class, which was consistent with the exposure of both Funds’ underlying indexes. At April 30, 2012, the IQ Hedge Multi-Strategy Tracker ETF posted $5,700,515 as collateral for swaps.

Pursuant to documentation governing the Funds’ swap transactions with Morgan Stanley Capital Services Inc. (“Morgan Stanley”), Morgan Stanley has the right to terminate the swaps early in the event that the net assets of the given Fund decline below specific levels set forth in the documentation (“net asset contingent features”). In the event of early termination, Morgan Stanley may require the Funds to pay or receive a settlement amount in connection with the terminated swap transaction. As of April 30, 2012, the Funds have not triggered the conditions under such documentation that will give the counterparty the right to call for an early termination. As of such date, the settlement values of these contracts were approximately equal to the fair value of such contracts.

At April 30, 2012, the fair values of derivative instruments reflected on the Statements of Assets and Liabilities were as follows:

Asset Derivatives
	Equity Risk		Total
IQ Hedge Multi-Strategy Tracker ETF
Unrealized appreciation on futures contracts¹	$	193,227	$	193,227
IQ Hedge Macro Tracker ETF
Unrealized appreciation on futures contracts¹		3,760		3,760
IQ Global Resources ETF
Unrealized appreciation on futures contracts¹		108,495		108,495
IQ Merger Arbitrage ETF
Unrealized appreciation on futures contracts¹		22,889		22,889
IQ Emerging Markets Mid Cap ETF
Unrealized appreciation on swap transactions		29		29

Liability Derivatives
		Equity Risk		Total
IQ Hedge Multi-Strategy Tracker ETF
Unrealized depreciation on futures contracts¹	$	136,631	$	136,631
IQ Hedge Macro Tracker ETF
Unrealized depreciation on futures contracts¹		13,366		13,366
IQ Global Resources ETF
Unrealized depreciation on futures contracts¹		14,930		14,930
IQ Merger Arbitrage ETF
Unrealized depreciation on futures contracts¹		3,289		3,289
IQ Emerging Markets Mid Cap ETF
Unrealized depreciation on swap transactions		44		44

Includes cumulative appreciation (depreciation) of futures contracts as reported in the Schedules of Investments. Only unsettled variation margin is reported within the Statements of Assets and Liabilities.

Notes to Financial Statements (continued)

April 30, 2012

Transactions in derivative instruments reflected on the Statements of Operations during the year ended April 30, 2012, were as follows:

	Equity Risk			Total
IQ Hedge Multi-Strategy Tracker ETF
Realized loss
Futures contracts	$	(1,882,294	)	$	(1,882,294	)
Swap transactions		(1,366,601	)		(1,366,601	)
Total realized loss	$	(3,248,895	)	$	(3,248,895	)
Change in Unrealized appreciation (depreciation)
Futures contracts	$	230,639		$	230,639
IQ Hedge Macro Tracker ETF
Realized loss
Futures contracts	$	(15,530	)	$	(15,530	)
Swap transactions		(23,794	)		(23,794	)
Total realized loss	$	(39,324	)	$	(39,324	)
Change in Unrealized appreciation (depreciation)
Futures contracts	$	58,791		$	58,791
IQ Global Resources ETF
Realized loss
Futures contracts	$	(175,358	)	$	(175,358	)
Change in Unrealized appreciation (depreciation)
Futures contracts	$	925,613		$	925,613
IQ Merger Arbitrage ETF
Realized loss
Futures contracts	$	(105,112	)	$	(105,112	)
Change in Unrealized appreciation (depreciation)
Futures contracts	$	328,605		$	328,605
IQ Emerging Markets Mid Cap ETF
Realized loss
Swap transactions	$	(47,076	)	$	(47,076	)
Change in Unrealized depreciation (depreciation)
Swap transactions	$	(15	)	$	(15	)

For the year ended April 30, 2012, the monthly average volume of the derivatives held by the Funds were as follows:

Fund	Number of Futures Contracts			Market Value of Futures Contracts
IQ Hedge Multi-Strategy Tracker ETF		(199	)	$	(12,004,771	)
IQ Hedge Macro Tracker ETF		(26	)		(2,045,867	)
IQ Global Resources ETF		(197	)		(13,928,185	)
IQ Merger Arbitrage ETF		(47	)		(3,341,646	)

Fund	Notional Amount of Swap Contracts
IQ Hedge Multi-Strategy Tracker ETF	$	2,017,291
IQ Hedge Macro Tracker ETF		1,436,169	¹
IQ Emerging Markets Mid Cap ETF		71,764

IQ Hedge Macro Tracker ETF utilized swaps during the last month of the fiscal year only.

Notes to Financial Statements (continued)

April 30, 2012

9. RISKS INVOLVED WITH INVESTING IN THE FUNDS

The Funds are subject to the principal risks described below. Some or all of these risks may adversely affect a Fund’s NAV, trading price, yield, total return and ability to meet its investment objective. As with any investment, an investment in a Fund could result in a loss or the performance of a Fund could be inferior to that of other investments.

Fund of Funds Risk*

Certain of the Funds’ investment performance, because they are funds of funds, depends on the investment performance of the underlying ETFs in which they invest. An investment in any such Fund is subject to the risks associated with the underlying ETFs that comprise its underlying Index. Such a Fund will indirectly pay a proportional share of the asset-based fees, if any, of the underlying ETFs in which it invests.

Exchange Traded Vehicle Risk*

Unlike an investment in a mutual fund, the value of the Funds’ investments in ETFs, exchange-traded vehicles (“ETVs”) and exchange-traded notes (“ETNs”) is based on stock market prices and the Fund could lose money due to stock market developments, the failure of an active trading market to develop, or exchange trading halts or de-listings. Federal law prohibits the Funds from acquiring investment company shares, including shares of ETFs, in excess of specific thresholds unless exempted by rule, regulation or exemptive order. These prohibitions may prevent the Funds from allocating their investments to ETFs in an optimal manner.

Index Risk

The underlying Indexes have limited historical performance data that is not predictive of future results. In addition, the underlying Indexes and the Funds rebalance only on a monthly or quarterly basis, which may cause the performance of the underlying Indexes and the Funds to deviate from that of the market exposure that they are trying to achieve.

Tracking Error Risk

Each Fund’s performance may not match its underlying Index during any period of time. Although each Fund attempts to track the performance of its underlying Index, a Fund may not be able to duplicate its exact composition or return for any number of reasons, including but not limited to risk that the strategies used by the Advisor to match the performance of the underlying Indexes may fail to produce the intended results, liquidity risk and new fund risk, as well as the incurring of Fund expenses, which the underlying Index does not incur.

Foreign Securities Risk

Certain of the Funds invest directly or indirectly (through underlying ETFs) in the securities of non-U.S. issuers, which involves risks beyond those associated with investments in U.S. securities. These additional risks include greater market volatility, the availability of less reliable financial information, higher transactional and custody costs, taxation by foreign governments, decreased market liquidity and political instability.

Small Capitalization Companies Risk**

Certain of the Funds invest primarily in the stocks of small capitalization companies, which may be more volatile than those of larger companies. Stock prices of small capitalization companies are also more vulnerable than those of large capitalization companies to adverse business and economic developments, and the stocks of small capitalization companies may be thinly traded, making it difficult to buy and sell them.

New Fund Risk***

Certain of the Funds are new funds. As new funds, there can be no assurance that the Funds will grow to or maintain an economically viable size, in which case the Funds may experience greater tracking error to their Underlying Indexes than they otherwise would be at higher asset levels or they could ultimately liquidate.

Applies to IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF and IQ Real Return ETF.

Applies to IQ Australia Small Cap ETF, IQ Canada Small Cap ETF, IQ South Korea Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF and IQ US Real Estate Small Cap ETF.

***

Applies to IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid Cap ETF.

10. SUBSEQUENT EVENTS

The Funds have evaluated subsequent events through the date of issuance of this report and have determined that there are no other material events that would require disclosure.

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of IndexIQ ETF Trust:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of IndexIQ ETF Trust (comprising, respectively, IQ Hedge Multi-Strategy Tracker ETF, IQ Hedge Macro Tracker ETF, IQ Real Return ETF, IQ Global Resources ETF, IQ Merger Arbitrage ETF, IQ Australia Small Cap ETF, IQ Canada Small Cap ETF, IQ South Korea Small Cap ETF, IQ Global Agribusiness Small Cap ETF, IQ Global Oil Small Cap ETF, IQ US Real Estate Small Cap ETF and IQ Emerging Markets Mid Cap ETF) (collectively, the “Funds”) as of April 30, 2012, and the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2012, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds constituting the IndexIQ ETF Trust at April 30, 2012, and the results of their operations, changes in their net assets, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

New York, New York
June 28, 2012

Supplemental Information (unaudited)

Federal Tax Status of Dividends Declared During the Tax Year

Qualified Dividend Income — Certain dividends paid by the fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The percentage of ordinary income distributions for the fiscal year ended April 30, 2012 taxed at a maximum rate of 15% is as follows:

IQ Hedge Multi-Strategy Tracker ETF		33.58%
IQ Hedge Macro Tracker ETF		31.94%
IQ Real Return ETF		0.00%
IQ Global Resources ETF		45.45%
IQ Merger Arbitrage ETF		0.00%
IQ Australia Small Cap ETF		29.63%
IQ Canada Small Cap ETF		47.95%
IQ South Korea Small Cap ETF		28.27%
IQ Global Agribusiness Small Cap Equity ETF		81.38%
IQ Global Oil Small Cap ETF		100.00%
IQ US Real Estate Small Cap ETF		0.00%
IQ Emerging Markets Mid Cap ETF		16.68%

Dividends Received Deduction — For corporate shareholders, the percentage of ordinary income distributions for the year ended April 30, 2012 that qualifies for the dividends received deduction is as follows:

IQ Hedge Multi-Strategy Tracker ETF		25.93%
IQ Hedge Macro Tracker ETF		0.00%
IQ Real Return ETF		0.00%
IQ Global Resources ETF		20.51%
IQ Merger Arbitrage ETF		0.00%
IQ Australia Small Cap ETF		0.00%
IQ Canada Small Cap ETF		0.00%
IQ South Korea Small Cap ETF		0.00%
IQ Global Agribusiness Small Cap Equity ETF		16.99%
IQ Global Oil Small Cap ETF		44.27%
IQ US Real Estate Small Cap ETF		0.00%
IQ Emerging Markets Mid Cap ETF		0.00%

Foreign Taxes Paid — The following Funds elect under the Internal Revenue Code Section 853 to pass through foreign taxes paid to its shareholders. The total amount of foreign taxes passed through to shareholders on a per share basis for the year ended April 30, 2012, are as follows:

	Foreign Taxes		Income
	Per Share		Per Share
IQ Hedge Multi-Strategy Tracker ETF		—		—
IQ Hedge Macro Tracker ETF		—		—
IQ Real Return ETF		—		—
IQ Global Resources ETF		0.0372		0.4501
IQ Merger Arbitrage ETF		—		—
IQ Australia Small Cap ETF		0.0132		1.0691
IQ Canada Small Cap ETF		0.0913		0.6088
IQ South Korea Small Cap ETF		0.0594		0.3588
IQ Global Agribusiness Small Cap Equity ETF		0.0388		0.4252
IQ Global Oil Small Cap ETF		0.0271		0.1937
IQ US Real Estate Small Cap ETF		—		—
IQ Emerging Markets Mid Cap ETF		0.0848		0.4948

In January 2013, you will be advised on IRS Form 1099 DIV as to the Federal tax status of the distributions received by you in calendar year 2012.

Board Review of Investment Advisory Agreement (unaudited)

At the March 13, 2012 meeting of the Board of Trustees (the “Board”) of IndexIQ ETF Trust (the “Trust”), the Board, including those Trustees who are not “interested persons” of the Trust (the “Independent Trustees”), as that term is defined in the Investment Company Act of 1940, as amended (“1940 Act”), approved IndexIQ Advisors LLC (“IndexIQ”) to continue to serve as investment adviser to the Fund and approved the continuation of the investment advisory agreement between IndexIQ and the Trust with respect to the Fund (the “Investment Advisory Agreement”), upon the same terms and conditions set forth therein, for the period February 2, 2012 until February 2, 2013. In connection with considering approval of the Investment Advisory Agreement, the Independent Trustees met in executive session with counsel to the Trust, who provided assistance and advice.

In considering the approval of the continuation of the Investment Advisory Agreement, the Independent Trustees reviewed the materials provided for the Meeting by IndexIQ, including: (i) a copy of the Investment Advisory Agreement with IndexIQ; (ii) information describing the nature, quality, and extent of the services that IndexIQ provides to the Funds, and the fees that IndexIQ receives from the Funds; (iii) information concerning business and operations, compliance program and portfolio management team of IndexIQ; (iv) a copy of the current Form ADV for IndexIQ; and (v) memoranda from Katten Muchin Rosenman LLP on the fiduciary responsibilities of trustees, including the Independent Trustees, in considering advisory arrangements under the 1940 Act. The independent Trustees also considered the information presented at Board meetings throughout the year. In addition, the Independent Trustees received data comparing the advisory fees, expenses and performance of the Funds with expenses and performance of other exchange-traded funds (“ETFs”) with similar investment objectives and policies.

During their review of this information, the Independent Trustees focused on and analyzed the factors they deemed relevant, including: (1) the nature, quality, and extent of the services provided to the Funds; (2) the personnel and operations of IndexIQ; (3) the investment performance of each Fund; (4) IndexIQ’s financial condition and profitability; (5) potential “fall-out” benefits to IndexIQ and its affiliates (i.e., ancillary benefits that may be realized by IndexIQ and its affiliates from IndexIQ’s relationship with the Funds); and (6) possible conflicts of interest.

In particular, the Board considered and discussed the following with respect to each Fund:

(a)

The nature, extent, and quality of services provided to the Funds by IndexIQ. The Board reviewed the services that IndexIQ provides to the Funds. The Board noted the responsibilities that IndexIQ has as the Funds’ investment adviser, including overall supervisory responsibility for the general management and investment of each Fund’s securities portfolio, daily monitoring of tracking error and quarterly reporting to the Board, and the implementation of Board directives as they relate to the Funds.

The Board reviewed the experience, resources, and strengths of IndexIQ in managing the Operating Funds, the IndexIQ Trust’s mutual fund, as well as separately managed accounts. Based on their consideration and review of the foregoing information, the Board determined that the Funds were likely to continue to benefit from the nature, quality, and extent of these services, as well as IndexIQ’s ability to render such services based on its experience, operations, and resources.

(b)

Comparison of services provided and fees charged by IndexIQ and other investment advisers to similar clients, and the cost of the services provided and profits realized by IndexIQ from its relationship with the Funds. The Board then compared both the services rendered and the fees paid pursuant to the Investment Advisory Agreement to contracts of other registered investment advisers providing services to similar ETFs. In particular, the Board compared each Fund’s advisory fee and expense ratio to other investment companies considered to be in each such Fund’s peer group.

After comparing each Fund’s fees with those of other ETFs in the Fund’s peer group, and in light of the nature, quality, and extent of services provided by IndexIQ and the costs incurred by IndexIQ in rendering those services, the Board concluded that the level of fees paid to IndexIQ with respect to each Fund were fair and reasonable.

(c)

IndexIQ’s profitability and the extent to which economies of scale would be realized as the Fund grows and whether fee levels would reflect such economies of scale. The Board discussed with IndexIQ the costs and profitability of IndexIQ in connection with its serving as investment adviser to each Fund, including operational costs.

Board Review of Investment Advisory Agreement (unaudited) (continued)

(d)

Investment performance of IndexIQ. The Board considered the investment performance of the Funds, including tracking error. In particular, the Board considered the investment performance of the Funds relative to their stated objectives and the success of IndexIQ in reaching such objectives. The Board considered each Fund’s investment performance compared to the benchmark index that each Fund uses for comparison in its prospectus and shareholder reports. The Board also considered each Fund’s investment performance compared to the average of the respective Fund’s peer group.

The Board also received and considered information about the premium/discount history of the Funds, which illustrated the number of times that the market price of the Funds trading on the secondary market closed above or below the NAV of the Funds, and by how much, measured in basis points.

Conclusion. No single factor was determinative to the decision of the Board. Based on the foregoing and such other matters as were deemed relevant, the Board concluded that the advisory fee rates and total expense ratios were reasonable in relation to the services provided by IndexIQ to the Funds, as well as the costs incurred and benefits gained by IndexIQ in providing such services. The Board also found the investment advisory fees to be reasonable in comparison to the fees charged by investment advisers to other comparable ETFs of similar size. As a result, the Board determined that the continuation of the Investment Advisory Agreement with IndexIQ was in the best interests of each Fund and its shareholders.

Board of Trustees and Officers (unaudited)

The business of the Trust is managed under the direction of the Trust's Board of Trustees. The Board elects the officers of the Trust who are responsible for administering the Trust's day-to-day operations. Each Trustee serves until his or her successor is duly elected or appointed and qualified.

The name, year of birth, address and principal occupations during the past five years for each Trustee and Officer of the Trust is set forth below, along with the other public directorships held by the Trustees.

Independent Trustees

Name and Year of Birth¹	Position(s) Held with Trust	Term of Office and Length of Time Served²	Principal Occupation(s) During Past 5 Years³	Number of Portfolios in Fund Complex Overseen by Trustee⁴	Other Directorships Held by Trustee
Reena Aggarwal 1957	Trustee	Since August 2008	Deputy Dean, McDonough School of Business, Georgetown University (2006 to 2008); Visiting Professor of Finance, Sloan School of Management, MIT (2005 to 2006); Interim Dean, McDonough School of Business, Georgetown University (2004 to 2005); Stallkamp Faculty Fellow and Professor of Finance, McDonough School of Business, Georgetown University (2003 to present).	21	FBR Funds (2006-2011)

Gene Chao 1970	Trustee	Since August 2008	Vice President, Global Industries Strategy & Solutions, Juniper Networks (2011 to present); Vice President and GM, Global Network, Hewlett-Packard (2010 to 2011); Vice President, Strategic Services, Dimension Data, Americas (2007 to 2010); Senior Vice President, Strategic Outsourcing, France Telecom Americas (2004 to 2007).	21	None

Interested Trustees⁵
Adam S. Patti 1970	Chairman and Trustee	Since November 2008	Chairman, Trustee, President and Principal Executive, IndexIQ Trust (2008 to present); Chief Executive Officer, the Advisor (2007 to present);	21	None

	President and Principal Executive Officer	Since July 2008	Chief Executive Officer, IndexIQ. (2006 to present); Associate Publisher, Time Inc. (2006).

Officers of the Trust

Name and Year of Birth¹	Position(s) Held with Trust	Term of Office and Length of Time Served²	Principal Occupation(s) During Past 5 Years
Gregory D. Bassuk 1972	Secretary	Since July 2008	Chief Compliance Officer, the Advisor (2008 to present); Secretary, IndexIQ Trust (2008 to present); Chairman and Trustee, IndexIQ ETF Trust (July 2008 to November 2008); Chairman and Trustee, IndexIQ Trust (February 2008 to November 2008); Chief Operating Officer, the Advisor (2007 to present); Chief Operating Officer, IndexIQ (2006 to present); Director, Time Inc. (2004 to 2006).

David Fogel 1971	Treasurer, Principal Financial Officer and Chief Compliance Officer	Since October 2008	Executive Vice President, IndexIQ Trust (2011 to present); Treasurer, Principal Financial Officer and Chief Compliance Officer, IndexIQ Trust (2008 to present);

	Executive Vice President	Since June 2011	Executive Vice President, IndexIQ (2006 to present); Vice President, Groton Partners LLC (2005 to 2006).

The address of each Trustee or Officer is c/o IndexIQ, 800 Westchester Avenue, Suite N-611, Rye Brook, New York 10573.

Trustees and Officers serve until their successors are duly elected and qualified.

Principal occupations(s) of the Trustees may cover more than the past five years.

The Funds are part of a "fund complex" as defined in the 1940 Act. The fund complex includes all open-end funds (including all of their portfolios) advised by the Advisor and any funds that have an investment advisor that is an affiliated person of the Advisor.

Mr. Patti is an "interested person" of the Trust (as that term is defined in the 1940 Act) because of his affiliations with the Advisor.

ANNUAL REPORT | APRIL 30, 2012

IndexIQ ETF Trust

IQ Hedge Multi-Strategy Tracker ETF
IQ Hedge Macro Tracker ETF
IQ Real Return ETF
IQ Global Resources ETF
IQ Merger Arbitrage ETF
IQ Australia Small Cap ETF
IQ Canada Small Cap ETF
IQ South Korea Small Cap ETF
IQ Global Agribusiness Small Cap ETF
IQ Global Oil Small Cap ETF
IQ US Real Estate Small Cap ETF
IQ Emerging Markets Mid Cap ETF

Investment Advisor
IndexIQ Advisors LLC
800 Westchester Avenue,
Suite N-611
Rye Brook, NY 10573

Distributor
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203

Custodian/Fund Administrator/Transfer Agent
The Bank of New York Mellon
One Wall Street
New York, NY 10286

Legal Counsel
Katten Muchin Rosenman, LLP
575 Madison Avenue
New York, New York 10022

Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036

Item 2. Code of Ethics.

a). The Registrant has adopted a code of ethics that applies to the Registrant’s Principal Executive Officer, Principal Financial Officer or persons performing similar functions.

b). There have not been any changes to the Code of Ethics.

c). Not Applicable

d). During the period, Registrant granted no waivers from the provisions of its code of ethics that applies to the Registrant's Principal Executive Officer, Principal Financial Officer or persons performing similar functions.

e). Not Applicable

f). Attached

Item 3. Audit Committee Financial Expert.

a). The Registrant’s Board of Trustees has one audit committee financial expert serving on its audit committee, an “independent” Trustee, Reena Aggarwal. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services.

a). Audit Fees: the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the audit are as follows:

2012: $185,000

2011: $165,000

b). Audit-Related Fees: the aggregate fees billed in each of the previous last two fiscal years for assurance and related services by the principal accountant that are principally related to the

Registrant’s tax return reviews and are not reported under paragraph (a) of this item are as follows:

2012: $0

2011: $0

c). Tax Fees, the aggregate fees billed in each of the previous last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are as follows:

2012: $53,200

2011: $47,600

d). All Other Fees, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) and (c) of this Item are as follows:

2012: $0

2011: $0

e) Audit Committee Pre-Approval Policies and Procedures.

(i) Per Rule 2-01(c)(7)(A), the Audit Committee pre-approves all of the Audit, Audit-Related, Tax and Other Fees of the Registrant.

(ii) 100% of services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(A) of Rule 2-01 of Regulation S-X.

(f) No response required.

(g) The aggregate non-audit fees billed by the Registrant's accountant for services rendered to the Funds, the Advisor or any entity controlling, controlled by, or under common control with the Advisor that provides ongoing services to the Registrant (except for any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor) that directly impacted the Funds for the period ended April 30, 2012 were as follows:

2012: $53,200

2011: $47,600

(h) Not Applicable

Item 5. Audit Committee of Listed Registrants.

(a) The Fund has a designated Audit Committee in accordance with Section 3(a)(58)(A) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and the members of such committee are Reena Aggarwal and Gene Chao.

(b) Not applicable.

Item 6. Schedule of Investments.

(a) Schedule 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 & Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 11. Controls and Procedures.

(a)

The Principal Executive Officer and Principal Financial Officer have evaluated the Registrant's disclosure controls and procedures within 90 days of the filing date of this report and have concluded that these controls and procedures are effective.

(b)

There were no significant changes in the Registrant's internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

Item 12. Exhibits.

(a) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the Registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Attached

(b) Separate certifications for each Principal Executive Officer and Principal Financial Officer of the Registrant as required by Rule 30a-2(a) under the 1940 Act (17CFR 270.30a-(a)).

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 ETF Trust

By: /s/ Adam S. Patti

Adam S. Patti, Principal Executive Officer

Date: July 6, 2012

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.

Registrant: IndexIQ ETF Trust

By: /s/ Adam S. Patti

Adam S. Patti, Principal Executive Officer

Date: July 6, 2012

By: /s/ David L. Fogel

David L. Fogel, Principal Financial Officer

Date: July 6, 2012