0001426439
2021-12-13
2021-12-13
0001426439
ck0001426439:S000069622Member
2021-12-13
2021-12-13
0001426439
ck0001426439:S000069622Member
ck0001426439:C000222073Member
2021-12-13
2021-12-13
pure
iso4217:USD
2021-12-13
N-1A
INDEXIQ ACTIVE ETF TRUST
2021-12-14
2021-12-14
MMCA
IQ MacKay California Municipal Intermediate ETF
Investment Objective
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11pt;">The IQ MacKay California Municipal Intermediate ETF (the “Fund”) seeks current income exempt from federal and California income taxes. </div>
Fees and Expenses of the Fund
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:11pt;">This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund (“Shares”). Investors may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example set forth below. </div>
Shareholder Fees (fees paid directly from your investment):None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):
0.0045
0
0.0022
0.0001
0.0068
-0.0032
0.0036
The Fund has not yet commenced operations and Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year.
The Fund has not yet commenced operations and Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year.
2022-08-31
<div style="margin-top:6pt; text-align:justify; width:480pt; line-height:11pt;"> This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. This example does not take into account brokerage commissions that you pay when purchasing or selling Shares of the Fund. </div>
<div style="margin-top:6pt; text-align:justify; width:480pt; line-height:11pt;">The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain at current levels. The return of 5% and estimated expenses are for illustration purposes only, and should not be considered indicators of expected Fund expenses or performance, which may be greater or less than the estimates. Although your actual costs may be higher or lower, based on these assumptions your costs would be: </div>
Example.
37
185
Portfolio Turnover
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">The Fund pays transaction costs, such as commissions, when it buys and sells securities or other instruments. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in annual Fund operating expenses or in the example, affect the Fund’s performance. This rate excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Shares. The Fund is newly organized and, as of the date of the Prospectus, has not yet commenced operations. </div>
Principal Investment Strategies
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">The Fund is an actively managed ETF and thus does not seek to replicate the performance of a specific index. Instead, the Fund uses an active management strategy to meet its investment objective. Consequently, investors should not expect the Fund’s returns to track the returns of any index or market for any period of time. </div>
<div style="-sec-ix-redline:true;margin-top:6pt; text-align:justify; width:480pt; line-height:11.5pt;">The Fund, under normal circumstances, invests at least 80% of its assets (net assets plus any borrowings for investment purposes) in municipal bonds, whose interest is, in the opinion of bond counsel for the issuers at the time of issuance, exempt from federal and California income taxes. Municipal bonds are generally debt </div>
<div style="-sec-ix-redline:true;text-align:justify; width:480pt; line-height:12.5pt;">obligations issued by or on behalf of states, territories and possessions of the United States, and their political subdivisions, agencies and instrumentalities that provide income free from federal, state and potentially local income taxes. If the interest on a particular municipal bond is exempt from federal and California income taxes, the Fund will treat the bond as qualifying for purposes of the 80% policy even though the issuer of the bond may be located outside of California. </div>
<div style="-sec-ix-redline:true;margin-top:6pt; text-align:justify; width:480pt; line-height:12.5pt;">Although the Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds, MacKay Shields LLC (the “Subadvisor”) intends to invest primarily in investment grade quality bonds as rated by at least one nationally recognized statistical rating organization (“NRSRO”) or if unrated, judged to be of comparable quality by the Subadvisor. The Fund may invest up to 20% of its net assets in municipal bonds that are rated below investment grade (commonly referred to as “high-yield securities” or “junk bonds”) as rated by at least one NRSRO, or if unrated, judged to be of comparable quality by the Subadvisor. If NRSROs assign different ratings to the same security, the Fund will use the higher rating for purposes of determining the security’s credit quality. The Fund generally will maintain a portfolio modified duration to worst of 3 to 8 years. Duration to worst is the duration of a bond computed using the bond’s nearest call date or maturity, whichever comes first. This measure ignores future cash flow fluctuations due to embedded optionality. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. </div>
<div style="-sec-ix-redline:true;margin-top:6pt; text-align:justify; width:480pt; line-height:12.5pt;">Municipal bonds include, among other instruments, general obligation bonds, revenue bonds, industrial revenue bonds, industrial development bonds, private activity bonds, as well as short-term, tax-exempt obligations such as municipal notes and variable rate demand obligations. The Fund may invest up to 20% of its net assets in municipal bonds subject to the federal alternative minimum tax and municipal bonds that pay interest that is subject to federal and/or California income taxes. The Fund may invest more than 25% of its total assets in municipal bonds that are related in such a way that an economic, business or political development or change affecting one such security could also affect the other securities. </div>
<div style="-sec-ix-redline:true;margin-top:6pt; text-align:justify; width:480pt; line-height:12.5pt;">If the supply of California state tax-exempt municipal bonds is insufficient to meet the Fund’s investment needs, the Fund may invest in municipal bonds issued by other states. Municipal bonds issued by other states purchased by the Fund will generally be exempt from federal income taxes but may not be exempt from California income taxes. </div>
<div style="-sec-ix-redline:true;margin-top:6pt; text-align:justify; width:480pt; line-height:12.5pt;">In choosing investments, the Subadvisor analyzes the credit quality of issuers and considers the yields available on municipal bonds with different maturities. </div>
<div style="-sec-ix-redline:true;margin-top:6pt; text-align:justify; width:480pt; line-height:12.5pt;">The Subadvisor uses active management in an effort to identify municipal bonds it believes to be mispriced and to build a consistent yield advantage. The Subadvisor focuses on reducing volatility through a disciplined investment process, which includes fundamental, “bottom-up” credit research and risk management. In addition, the Subadvisor reviews macroeconomic events, technical in the municipal market, tax policies and analyzes individual municipal securities and sectors. The Subadvisor’s investment process includes a risk analysis that gives consideration to a variety of security-specific risks, including but not limited to, environmental, social and governance (“ESG”) risks that may have a material impact on the performance of a security. In addition to proprietary research, the Subadvisor may use screening tools and, to the extent available, third-party data to identify ESG risk factors that may not have been captured through its own research. The Subadvisor’s consideration of ESG risk is weighed against other criteria and therefore does not mean that any sectors, industries or individual securities are explicitly excluded from the Fund. </div>
<div style="margin-top:6pt; text-align:justify; width:480pt; line-height:12.5pt;">The Subadvisor may sell a security if it no longer believes the security will contribute to meeting the investment objective of the Fund. In considering whether to sell a security, the Subadvisor may evaluate, among other things, the condition of the economy and meaningful changes in the issuer’s financial condition. </div>
Principal Risks
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">As with all investments, there are certain risks of investing in the Fund. The Shares will change in value and you could lose money by investing in the Fund. An investment in the Fund does not represent a complete investment program. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. You should consider carefully the following risks before investing in the Fund. A more complete discussion of Principal Risks is included under “Description of the Principal Risks of the Fund.” </div>
<div style="-sec-ix-redline:true;width:480pt; line-height:10pt;font-style:italic;">Alternative Minimum Tax Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">Although the interest received from municipal securities is generally exempt from federal income tax, the Fund may invest in municipal securities subject to the federal alternative minimum tax. Accordingly, an investment in the Fund could cause shareholders to be subject to the federal alternative minimum tax. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Authorized Participant Concentration Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">Only certain large institutions may engage in creation or redemption transactions directly with the Fund (each, an “Authorized Participant”). The Fund has a limited number of institutions that may act as Authorized Participants on an agency basis (i.e., on behalf of other market participants). To the extent that those Authorized Participants exit the business or are unable to proceed with creation and/or redemption orders with the Fund and no other Authorized Participant is able to step forward to engage in creation and redemption transactions with the Fund, Shares may be more likely to trade at a premium or discount to NAV and possibly face trading halts and/or delisting. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">California State Specific Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">Because the Fund invests principally in municipal bonds issued by, or on behalf of, the State of California, and its political subdivisions, agencies and instrumentalities, events in California may affect the value of the Fund’s investments and performance. These events may include fiscal or political policy changes, tax base erosion, budget deficits and other financial difficulties. Any deterioration of California’s fiscal situation and economic situation of its municipalities could cause greater volatility and increase the risk of investing in California. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Cash Transactions Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">The Fund currently intends to effect creations and redemptions principally for cash, rather than for in-kind securities. For this reason, the Fund may be required to sell portfolio securities in order to obtain the cash needed to distribute redemption proceeds. The Fund may recognize a capital gain on these sales that might not have been incurred if the Fund had made a redemption in-kind. This may decrease the tax efficiency of the Fund compared to ETFs that utilize an in-kind redemption process. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Credit Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">Credit risk is the risk that the issuer or guarantor of a debt instrument or the counterparty to a derivatives contract, repurchase agreement or loan of portfolio securities will be unable or unwilling to make its timely interest and/or principal payments when due or otherwise honor its obligations. Changes in an issuer’s or counterparty’s credit rating or the market’s perception of an issuer’s or counterparty’s creditworthiness may also adversely affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on an issuer’s or counterparty’s financial condition and on the terms of an obligation. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Cyber Security Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">The Fund is susceptible to operational risks through breaches in cyber security. Such events may cause the Fund to lose proprietary information, suffer data corruption or lose operational capacity and could cause the Fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. In addition, cyber security breaches of the securities issuers or the Fund’s third-party service providers can also subject the Fund to many of the same risks associated with direct cyber security breaches. Although the Fund has established risk management systems designed to reduce the risks associated with cyber security, there is no guarantee that such efforts will succeed. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Debt Securities Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">The risks of investing in debt securities include (without limitation): (i) credit risk, e.g., the issuer or guarantor of a debt security may be unable or unwilling (or be perceived as unable or unwilling) to make timely principal and/or interest payments or otherwise honor its obligations; (ii) interest rate risk, e.g., when interest rates go up, the value of a debt security generally goes down, and when interest rates go down, the value of a debt security generally goes up; (iii) liquidity risk and valuation risk, e.g., debt securities generally do not trade on a securities exchange, making them generally less liquid and more difficult to value than common stock; (iv) call risk and income risk, e.g., during a period of falling interest rates, the issuer may redeem a security by repaying it early, which may reduce the Fund’s income if the proceeds are reinvested at lower interest rates; and (v) extension risk, e.g., if interest rates rise, repayments of debt securities may occur more slowly than anticipated by the market, which may drive the prices of these securities down because their interest rates are lower than the current interest rate and the securities remain outstanding longer. Debt securities most frequently trade in institutional round lot size transactions. If the Fund purchases bonds in amounts less than the institutional </div><div style="text-align:justify; width:480pt; line-height:11.5pt;">round lot size, which are frequently referred to as “odd” lots, the odd lot size positions may have more price volatility than institutional round lot size positions. The Fund uses a third-party pricing service to value bond holdings and the pricing service values bonds assuming orderly transactions of an institutional round lot size. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Focused Investment Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">To the extent that the Fund invests a large percentage of its assets in a single asset class or the securities of issuers within the same country, group of countries, region, industry, group of industries or sector, an adverse economic, market, political or regulatory development may affect the value of the Fund’s investments more than if the Fund were more broadly diversified. Different asset classes, countries, groups of countries, regions, industries, groups of industries or sectors tend to go through cycles of outperformance and underperformance in comparison to each other and to the general financial markets. </div>
<div style="-sec-ix-redline:true;margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">High-Yield Municipal Bond Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">High-yield or non-investment grade municipal bonds (commonly referred to as “junk bonds”) may be subject to increased liquidity risk as compared to other high-yield debt securities. There may be little or no active trading market for certain high-yield municipal bonds, which may make it difficult for the Fund to sell such bonds at or near their perceived value. In such cases, the value of a high-yield municipal bond may decline dramatically, even during periods of declining interest rates. The high-yield municipal bonds in which the Fund intends to invest may be more likely to pay interest that is includable in taxable income for purposes of the federal alternative minimum tax than other municipal bonds. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Income Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">The Fund’s income may decline when interest rates fall or if there are defaults in its portfolio. This decline can occur because the Fund may subsequently invest in lower-yielding securities when securities in its portfolio mature or the Fund otherwise needs to purchase additional securities. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Interest Rate Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">An increase in interest rates may cause the value of securities held by the Fund to decline. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, making them more volatile than securities with shorter durations or floating or adjustable interest rates. The negative impact on the Fund from potential interest rate increases could be swift and significant, including falling market values, increased redemptions and reduced liquidity. The Fund may be subject to a greater risk of rising interest rates than would normally be the case due to the current period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives. </div>
<div style="margin-top:6pt; text-align:justify; width:480pt; line-height:11.5pt;">When interest rates rise, certain obligations will be paid off by the issuer (or other obligated party) more slowly than anticipated, causing the value of these securities to fall. As a result, in a period of rising interest rates, securities may exhibit additional volatility and may lose value. The value of securities with longer maturities generally changes more in response to changes in interest rates than does the value of securities with shorter maturities. </div>
<div style="margin-top:6pt; text-align:justify; width:480pt; line-height:11.5pt;">During periods of falling interest rates, an issuer of a callable security held by the Fund may “call” or repay the security before its stated maturity, which may result in the Fund having to reinvest the proceeds in securities with lower yields, resulting in a decline in the Fund’s income, or in securities with greater risks or with other less favorable features. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Issuer Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">The performance of the Fund depends on the performance of individual securities to which the Fund has exposure. Changes to the financial condition or credit rating of an issuer of those securities may cause the value of the securities to decline. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Liquidity Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">Liquidity risk exists when particular investments are difficult to purchase or sell. Certain investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Accordingly, the Fund may not be able to sell or close out of such investments at favorable times or prices (or at all), or at the prices approximating those at which the Fund currently values them. Illiquid securities may trade at a discount from comparable, more liquid investments and may be subject to wide fluctuations in market value. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Market Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:11.5pt;">Market risks include political, regulatory, market and economic developments, including developments that impact specific economic sectors, industries or segments of the market, which may affect the Fund’s value. Turbulence in financial markets, tariffs and other protectionist measures, political developments and </div><div style="text-align:justify; width:480pt; line-height:12pt;">uncertainty, central bank policy, and reduced liquidity in equity, credit and fixed income markets may negatively affect many issuers worldwide, which could have an adverse effect on the Fund. During a general downturn in the securities markets, multiple asset classes may be negatively affected. Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, public health crises and related geopolitical events have led, and in the future may lead, to disruptions in the U.S. and world economies and markets, which may increase financial market volatility and have significant adverse direct or indirect effects on the Fund and its investments. Market disruptions could cause the Fund to lose money, experience significant redemptions, and encounter operational difficulties. Although multiple asset classes may be affected by a market disruption, the duration and effects may not be the same for all types of assets. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Municipal Bond Market Liquidity Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">Inventories of municipal bonds held by brokers and dealers may decrease, lessening their ability to make a market in these securities. Any reduction in market-making capacity has the potential to decrease the Fund’s ability to buy or sell municipal bonds and increase price volatility and trading costs, particularly during periods of economic or market stress. As a result, the Fund may be forced to accept a lower price to sell a municipal bond, to sell other securities to raise cash, or to give up an investment opportunity, any of which could have a negative effect on performance. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Municipal Bond Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">Issuers, including governmental issuers, may be unable to pay their obligations as they come due. The values of municipal bonds that depend on a specific revenue source to fund their payment obligations may fluctuate as a result of actual or anticipated changes in the cash flows generated by the revenue source or changes in the priority of the municipal obligation to receive the cash flows generated by the revenue source. The values of municipal bonds held by the Fund may be adversely affected by local political and economic conditions and developments. Adverse conditions in an industry significant to a local economy could have a correspondingly adverse effect on the financial condition of local issuers. This risk would be heightened to the extent that the Fund invests a substantial portion of its assets in municipal bonds issued pursuant to similar projects or whose interest is paid solely from revenues of similar projects. In addition, income from municipal bonds held by the Fund could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of an issuer or other obligated party. Loss of tax-exempt status may cause interest received and distributed to shareholders by the Fund to be taxable and may result in a significant decline in the values of such municipal securities. There are various different types of municipal bonds, each with its own unique risk profile. Some of these risks include: </div>
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<span style="font-style:italic;">General Obligation Bonds Ris</span>k—timely payments depend on the issuer’s credit quality, ability to raise tax revenues and ability to maintain an adequate tax base; </div><div style="clear:both; padding:0pt; margin:0pt;font-size:0pt;line-height:0pt;"></div>
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<span style="font-style:italic;">Revenue Bonds (including Industrial Development Bonds) Risk—</span>timely payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source, and may be negatively impacted by the general credit of the user of the facility; </div><div style="clear:both; padding:0pt; margin:0pt;font-size:0pt;line-height:0pt;"></div>
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<span style="font-style:italic;">Private Activity Bonds Risk—</span>municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise, which is solely responsible for paying the principal and interest on the bonds, and payment under these bonds depends on the private enterprise’s ability to do so; </div><div style="clear:both; padding:0pt; margin:0pt;font-size:0pt;line-height:0pt;"></div>
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<span style="font-style:italic;">Moral Obligation Bonds Risk—</span>moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality; </div><div style="clear:both; padding:0pt; margin:0pt;font-size:0pt;line-height:0pt;"></div>
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<span style="font-style:italic;">Municipal Notes Risk—</span>municipal notes are shorter-term municipal debt obligations that pay interest that is, in the opinion of bond counsel for the issuer at the time of issuance, generally excludable from gross income for federal income tax purposes (except that the interest may be includable in taxable income for purposes of the federal alternative minimum tax) and that have a maturity that is generally one year or less. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money; and </div><div style="clear:both; padding:0pt; margin:0pt;font-size:0pt;line-height:0pt;"></div>
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<span style="font-style:italic;">Municipal Lease Obligations Risk—</span>in a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. </div><div style="clear:both; padding:0pt; margin:0pt;font-size:0pt;line-height:0pt;"></div><div style="width:480pt; line-height:10pt;font-style:italic;">Municipal Bond Valuation Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">The municipal bonds in which the Fund invests are typically valued by a pricing service utilizing a range of market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making markets in such securities, cash flows and transactions for comparable instruments. There is no assurance that the Fund will be able to sell a portfolio security at the price established by the pricing service, which could result in a loss to the Fund. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Municipal Insurance Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">The Fund’s investments may include investments in insured municipal bonds. Municipal security insurance does not guarantee the value either of individual municipal securities or of Shares of the Fund. In addition, a municipal security insurance policy generally will not cover: (i) repayment of a municipal security before maturity (redemption), (ii) prepayment or payment of an acceleration premium (except for a mandatory sinking fund redemption) or any other provision of a bond indenture that advances the maturity of the bond or (iii) non-payment of principal or interest caused by negligence or bankruptcy of the paying agent. A mandatory sinking fund redemption may be a provision of a municipal security issue whereby part of the municipal security issue may be retired before maturity. Market conditions or changes to ratings criteria could adversely impact the ratings of municipal bond insurance companies. Downgrades and withdrawal of ratings from municipal bond insurers have substantially limited the availability of insurance sought by municipal bond issuers, thereby reducing the supply of insured municipal bonds that meet the Fund’s investment guidelines or the ability of the Fund to purchase insurance on municipal bonds held by the Fund. A rating downgrade of a municipal bond insurer could negatively impact the market value of insured municipal bonds held by the Fund. If the insurer of a defaulted municipal bond were to become unable or unwilling to pay the principal or interest on the defaulted municipal bond, the Fund would incur losses. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">New Fund Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">As a new fund, there can be no assurance that the Fund will grow to or maintain an economically viable size. Like other new funds, large inflows and outflows may impact the Fund’s market exposure for limited periods of time. This impact may be positive or negative, depending on the direction of market movement during the period affected. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Operational Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">The Fund is exposed to operational risks arising from a number of factors, including, but not limited to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. The Fund and Advisor seek to reduce these operational risks through controls and procedures. However, these measures do not address every possible risk and may be inadequate to address significant operational risks. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Portfolio Management Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">The Fund is subject to portfolio management risk because it is an actively managed portfolio. In managing the Fund’s investment portfolio, the portfolio managers will apply investment techniques and risk analyses that may not produce the desired result or, while it may be the desired result, may underperform other types of investment strategies. The Subadvisor may give consideration to certain ESG criteria when evaluating an investment opportunity. The application of ESG criteria may result in the Fund (i) having exposure to certain securities or industry sectors that are significantly different than the composition of the Fund’s benchmark; and (ii) performing differently than other funds and strategies in its peer group that do not take into account ESG criteria or the Fund’s benchmark. There can be no guarantee that the Fund will meet its investment objective(s). </div>
<div style="-sec-ix-redline:true;margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Private Placement and Restricted Securities Risk </div>
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">The Fund may invest in privately issued securities, including those which may be resold only in accordance with Rule 144A under the Securities Act of 1933, as amended. Securities acquired in a private placement generally are subject to strict restrictions on resale, and there may be no market or a limited market for the resale of such securities. Therefore, the Fund may be unable to dispose of such securities when it desires to do so or at the most favorable price. This potential lack of liquidity also may make it more difficult to accurately value these securities. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Trading Price Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12pt;">Shares of the Fund trade on securities exchanges at prices at, above or below the Fund’s most recent NAV. The NAV of the Fund is calculated at the end of each business day and fluctuates with changes in the market value of the Fund’s holdings. The trading price of the Fund’s Shares fluctuates continuously throughout trading hours </div><div style="text-align:justify; width:480pt; line-height:12.5pt;">based on both market supply of and demand for Shares and the underlying value of the Fund’s portfolio holdings or NAV. As a result, the trading prices of the Fund’s Shares may deviate significantly from NAV during periods of market volatility. Any of these factors, among others, may lead to the Fund’s Shares trading at a premium or discount to NAV. Although it is generally expected that the market price of the Shares of the Fund will approximate the Fund’s NAV, there may be times when the market price and the NAV vary significantly. Thus, an investor may pay more than NAV when purchasing Shares and receive less than NAV when selling Shares. </div>
<div style="margin-top:6pt; width:480pt; line-height:10pt;font-style:italic;">Variable and Floating Rate Instruments Risk </div>
<div style="margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">Variable and floating rate instruments include debt securities issued by corporate and governmental entities, bank loans, mortgage-backed securities and asset-backed securities, preferred equity securities and derivative variable rate securities, such as inverse floaters. Variable and floating rate instruments are structured so that the instrument’s coupon rate fluctuates based upon the level of a reference rate. A variable or floating rate instrument’s coupon rate resets periodically according to its terms. Consequently, in a rising interest rate environment, variable and floating rate instruments with coupon rates that reset infrequently may lag behind the changes in market interest rates. </div>
The Shares will change in value and you could lose money by investing in the Fund.
An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Performance Information
<div style="-sec-ix-redline:true;margin-top:2pt; text-align:justify; width:480pt; line-height:12.5pt;">As of the date of this Prospectus, the Fund has not commenced operations and therefore does not report its performance information. The Fund’s performance current to the most recent month-end is available by calling 1-888-474-7725 or by visiting newyorklifeinvestments.com. </div>
As of the date of this Prospectus, the Fund has not commenced operations and therefore does not report its performance information.
1-888-474-7725
newyorklifeinvestments.com
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2021-12-13
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