IndexIQ will not be paying any capital gains distributions on its lineup of exchange-traded funds this year.
Those ETFs are:
- IQ Hedge Multi-Strategy Tracker ETF (NYSEArca: QAI)
- IQ Hedge Macro Tracker ETF (NYSEArca: MCRO)
- IQ CPI Inflation Hedged ETF (NYSEArca: CPI)
- IQ ARB Global Resources ETF (NYSEArca: GRES)
- IQ ARB Merger Arbitrage ETF (NYSEArca: MNA)
According to the company, while no capital gains were posted in 2009, the investment strategy behind MNA could mean high portfolio turnover moving forward, which might not only lead to higher transaction costs and lower total returns to the fund, but also could expose taxable investors to capital gains distributions in the future.
MNA, which was launched mid-November, invests in global companies that are the targets of a takeover; it is the first ETF to enter the mergers and acquisitions space. You can read more about the fund here.