Strategy. The Fund is a fund of funds which means it invests, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the investments included in its Underlying Index, which includes underlying funds. The Underlying Index consists of a number of components (Underlying Index Components) selected in accordance with IndexIQs rules-based methodology of such Underlying Index. Such Underlying Index Components will include primarily ETFs and/or other exchange-traded vehicles issuing equity securities organized in the U.S., such as exchange-traded commodity pools (ETVs), and may include exchange-traded notes (ETNs) (such ETFs, ETVs and ETNs are referred to collectively as exchange-traded products or ETPs). The Fund may also invest in one or more financial … Show more… The Fund is a fund of funds which means it invests, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the investments included in its Underlying Index, which includes underlying funds. The Underlying Index consists of a number of components (Underlying Index Components) selected in accordance with IndexIQs rules-based methodology of such Underlying Index. Such Underlying Index Components will include primarily ETFs and/or other exchange-traded vehicles issuing equity securities organized in the U.S., such as exchange-traded commodity pools (ETVs), and may include exchange-traded notes (ETNs) (such ETFs, ETVs and ETNs are referred to collectively as exchange-traded products or ETPs). The Fund may also invest in one or more financial instruments, including but not limited to futures contracts and swap agreements (collectively, Financial Instruments). The Fund employs a passive management or indexing investment approach designed to track the performance of the Underlying Index, which was developed by IndexIQ LLC (IndexIQ), an affiliate of IndexIQ Advisors LLC, the Funds investment advisor (the Advisor). The Underlying Index 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 pursuing a long/short strategy (the Strategy). Long/short hedge funds typically diversify their risks by limiting the net exposure to particular regions, industries, sectors and market capitalization bands, allowing them to focus on company-specific anomalies. At the same time, long/short managers often hedge against un-diversifiable risk, such as market risk (i.e., the returns of the overall market). Certain long/short managers focus on specific sectors, regions or industries, on particular investment styles, such as value or growth, or certain types of stocks, such as small or large. The Fund does not invest in hedge funds, and the Underlying Index does not include hedge funds as Underlying Index Components. The Fund is not a fund of hedge funds. The Underlying Index may include both long and short positions in securities, including, primarily, ETPs. As opposed to taking long positions in which an investor seeks to profit from increases in the price of a security, short selling (or selling short) is a technique used by the Fund to try and profit from the falling price of a security. Short selling involves selling a security that has been borrowed from a third party with the intention of buying the identical security back at a later date to return to that third party. The basic principle of short selling is that one can profit by selling a security now at a high price and later buying it back at a lower price. The short seller hopes to profit from a decline in the price of the security between the sale and the repurchase, as the seller will pay less to buy the security than it received on selling the security. The Underlying Index generally is based on the premise that hedge fund returns, when aggregated among hedge funds with similar investment styles, display over time significant exposures to a set of common investment strategies and asset classes. By creating an index that has similar exposures to the same investment strategies and asset classes as hedge funds generally, IndexIQ seeks to replicate the beta return characteristics of hedge funds. The Underlying Index Components of this Strategy generally provide exposures to: Emerging market equity; ? Foreign equity, including small-capitalization equity; ? The implied volatility of the S&P 500 Index; ? U.S. and foreign preferred securities; ? U.S. and foreign real estate investment trusts; ? U.S. bank loans; ? U.S. government long-term maturity obligations; ? U.S. growth equity; ? U.S. momentum equity; ? U.S. investment grade corporate debt; ? U.S. large-capitalization equity; ? U.S. small-capitalization equity; and ? U.S. value equity. ? The Underlying Index is unlike traditional market-oriented indexes like the Standard & Poors 500 Composite Stock Total Return Index (the S&P 500 Index). Instead of tracking the performance of publicly-traded issuers representing a market or industry sector, the Underlying Index seeks to track the returns of distinct hedge fund investment styles. The Underlying Index may include as a component one or more ETFs advised by the Advisor (Affiliated ETFs) and the Fund will typically invest in any Affiliated ETF included in the Underlying Index. The Fund also may invest in Affiliated ETFs that are not components of the index if such an investment will help the Fund track the Underlying Index. The weights of the Underlying Index Components are rebalanced on a monthly basis. Annually, IndexIQ conducts a review process pursuant to which it may reconstitute the Underlying Indexes by adding or subtracting Underlying Index Components according to IndexIQs rules-based process. Show less