IndexIQ Launches Two Actively Managed Municipal Bond ETFs

RYE BROOK, N.Y., Oct. 18, 2017 /PRNewswire/ -- IndexIQ, a leading provider of innovative investment solutions, today announced the launch of the IQ MacKay Shields Municipal Intermediate ETF (MMIT) and the IQ MacKay Shields Municipal Insured ETF (MMIN), the latest additions to the firm's fast-growing suite of fixed income ETF offerings.

Both funds are actively managed by subadvisor MacKay Municipal Managers™ of MacKay Shields LLC, an award-winning investment team led by co-CIOs John Loffredo and Robert DiMella who collectively have over 50 years of investment experience and have managed municipal strategies together for over 20 years. They are supported by an experienced investment team that provides expertise across all facets of the municipal market.

MMIT seeks current income exempt from federal income tax. The Fund seeks to achieve its objective by investing primarily in investment grade municipal bonds and will also seek to enhance total return potential through the subadvisor's active management approach. MMIN seeks current income exempt from federal income tax.

MMIN principally invests in investment-grade municipal bonds covered by an insurance policy guaranteeing the payment of principal and interest, and will also seek to enhance total return potential through the subadvisor's active management approach.

MMIT and MMIN join a growing family of fixed income ETF offerings from IndexIQ, including three first-of-their-kind factor-based fixed income offerings: the IQ Enhanced Core Bond U.S. ETF (NYSE Arca: AGGE) and IQ Enhanced Core Plus Bond U.S. ETF (NYSE Arca: AGGP), which were launched in May of 2016, and the IQ S&P High Yield Low Volatility Bond ETF (HYLV), the first high yield low volatility fixed income ETF, which launched in February of 2017.

MacKay Municipal Managers™ Portfolio Manager David Dowden said:

"A number of major changes have taken place in the municipal bond category in recent years, introducing new risks and inefficiencies. The benefits of active management in the municipal bond arena are clear when one looks at the dizzying array of credit types available, the substantial number of new issuances entering the market each year, and the dramatically different liquidity environment to be found in the space now. Much of the alpha to be generated in municipal bonds is based on market access and a strong understanding of supply and demand dynamics; all of which we strive to deliver to clients."

Salvatore Bruno, Chief Investment Officer with IndexIQ said:

"These products allow us to bring the municipal bond expertise of MacKay Shields, a fellow New York Life Investment Management boutique, to investors through an innovative, cost-effective ETF chassis. We expect that these new products will allow more investors to gain the benefits of exposure to this complex, yet important, sector of the bond market."

About IndexIQ

IndexIQ is a pioneer and leading provider of innovative investment solutions focused on absolute return, real assets, international and fixed income strategies. IndexIQ's solutions are offered as ETFs, mutual funds, separately managed accounts, and ETF model portfolios. The company's philosophy is to democratize investment management by providing all investors with cost-effective access to the types of high-quality, sophisticated investment products that typically have been reserved for institutional and ultra-high-net-worth investors. IndexIQ's mission is to take indexing to the next level by combining the best attributes of both passive and active investing, and make strategies available to investors in low cost, liquid, and transparent products. IndexIQ is an indirect, wholly-owned subsidiary of New York Life Insurance Company. Additional information about IndexIQ and its products can be found at IQetfs.com.  

About Risk:

MMIN:

The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund's investments more than the market as a whole, to the extent that the Fund's investments are concentrated in the securities of a particular issuer or issuers, region, market, industry, group of industries, project types, group of project types, sector or asset class. Municipal Bond risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers, and the possibility of future tax and legislative changes, which could affect the market for and value of municipal securities.

The Fund is a new fund. As a new fund, there can be no assurance that it will grow to or maintain an economically viable size, in which case it could ultimately liquidate. Fixed income securities most frequently trade in institutional round lot size transactions. Until the Fund grows significantly in size, the Fund expects to purchase a significant number of bonds in amounts less than the institutional round lot size, which are frequently referred to as "odd" lots. Odd lot size positions may have more price volatility than institutional round lot size positions.

A portion of the Fund's income may be subject to state and local taxes or the alternative minimum tax. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise. Bonds are also subject to credit risk, in which the bond issuer may fail to pay interest and principal in a timely manner. Municipal bond risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers, and the possibility of future tax and legislative changes, which could affect the market for and value of municipal securities.

MMIT:

The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund's investments more than the market as a whole, to the extent that the Fund's investments are concentrated in the securities of a particular issuer or issuers, region, market, industry, group of industries, project types, group of project types, sector or asset class. Municipal Bond risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers, and the possibility of future tax and legislative changes, which could affect the market for and value of municipal securities.

The Fund is a new fund. As a new fund, there can be no assurance that it will grow to or maintain an economically viable size, in which case it could ultimately liquidate. Fixed income securities most frequently trade in institutional round lot size transactions. Until the Fund grows significantly in size, the Fund expects to purchase a significant number of bonds in amounts less than the institutional round lot size, which are frequently referred to as "odd" lots. Odd lot size positions may have more price volatility than institutional round lot size positions.

A portion of the Fund's income may be subject to state and local taxes or the alternative minimum tax. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise. Bonds are also subject to credit risk, in which the bond issuer may fail to pay interest and principal in a timely manner. Municipal bond risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers, and the possibility of future tax and legislative changes, which could affect the market for and value of municipal securities.

Market conditions or changes to ratings criteria could adversely impact the ratings of municipal bond insurance companies.  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.

Consider the Fund's investment objectives, risks, charges and expenses carefully before investing. The prospectus and the statement of additional information includes this and other relevant information about the Fund and are available by visiting IQetfs.com or calling 888-474-7725. Read the prospectus carefully before investing.

IndexIQ® is the indirect wholly owned subsidiary of New York Life Investment Management Holdings LLC. ALPS Distributors, Inc. (ALPS) is the principal underwriter of the ETFs. NYLIFE Distributors LLC is a distributor of the ETFs and the principal underwriter of the IQ Hedge Multi-Strategy Plus Fund NYLIFE Distributors LLC is located at 30 Hudson Street, Jersey City, NJ 07302. ALPS Distributors, Inc. is not affiliated with NYLIFE Distributors LLC. NYLIFE Distributors LLC is a Member FINRA/SIPC.

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called "creation units", and otherwise, can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in-kind.

SOURCE IndexIQ