Definitive Materials Filed by Investment Companies. (497)
17 April 2020 - 3:35AM
Edgar (US Regulatory)
INDEXIQ ACTIVE ETF TRUST
(the “Trust”)
Supplement dated April 16, 2020 (“Supplement”)
to the IQ MacKay Municipal Insured ETF,
IQ MacKay Municipal Intermediate ETF
and IQ MacKay Municipal Short Duration
ETF Prospectus dated August 29, 2019 and
the IQ Ultra Short Duration ETF Prospectus
dated July 22, 2019
(collectively, the “Prospectuses”)
Capitalized terms and certain other
terms used in this Supplement, unless otherwise defined in this Supplement, have the meanings assigned to them in the Prospectuses.
The following
change is effective immediately. In the “Description of the Principal Risks of the Funds” section of the Prospectuses,
“Market Risk” is deleted in its entirety and replaced with the following:
Market Risk
The value of a Fund’s investments may fluctuate and/or
decline because of changes in the markets in which the Fund invests, which could cause the Fund to underperform other funds with
similar investment objectives and strategies. Security markets are volatile and may decline significantly in response to adverse
issuer, regulatory, political, or economic developments. Different sectors of the market and different security types may react
differently to such developments. Changes in these markets may be rapid and unpredictable. Fluctuations in the markets generally
or in a specific industry or sector may impact the securities in which a Fund invests. From time to time, markets may experience
periods of stress for potentially prolonged periods that may result in: (i) increased market volatility; (ii) reduced market liquidity;
and (iii) increased redemptions of Fund shares. Such conditions may add significantly to the risk of volatility in the net asset
value of a Fund’s shares and the market prices at which shares of a Fund trade on a securities exchange. During periods of
market stress shares of a Fund may also experience significantly wider “bid/ask” spreads and premiums and discounts
between a Fund’s net asset value and market price.
Market changes may impact equity and fixed income securities
in different and, at times, conflicting manners. A Fund potentially will be prevented from executing investment decisions at an
advantageous time or price as a result of any domestic or global market disruptions, particularly disruptions causing heightened
market volatility and reduced market liquidity, as well as increased or changing regulations or market closures. Thus, investments
that the Subadvisor believes represent an attractive opportunity or in which a Fund seeks to obtain exposure may be unavailable
entirely or in the specific quantities sought by the Subadvisor and the Fund may need to obtain the exposure through less advantageous
or indirect investments or forgo the investment at the time. Securities and investments held by a Fund may be susceptible to declines
in value, including declines in value that are not believed to be representative of the issuer’s value or fundamentals, due
to investor reactions to such events.
Political and diplomatic
events within the United States and abroad, such as the U.S. budget and deficit reduction plans, protectionist measures, trade
tensions central bank policy and government intervention in the economy, has in the past resulted, and may in the future result,
in developments that present additional risks to a Fund's investments and operations. Geopolitical and other events, such as war,
acts of terrorism, natural disasters, the spread of infectious illnesses, epidemics and pandemics, environmental and other public
health issues, recessions or other events, and governments’ reactions to such events, may lead to increased market volatility
and instability in world economies and markets generally and may have adverse effects on the performance of a Fund and its investments.
Additional and/or prolonged geopolitical or other events may affect investor and consumer confidence and may adversely impact financial
markets and the broader economy, perhaps suddenly and to a significant degree. Any such market, economic and other disruptions
could also prevent a Fund from executing its investment strategies and processes in a timely manner.
An investment in a Fund is not a deposit in a bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your Shares,
they could be worth less than what you paid for them.
Investors Should Retain this Supplement
for Future Reference
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