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What is IQ Hedge Multi-Strategy Tracker ETF (QAI)?

By Amarendra Bhushan for CEOWORLD Magazine Updated:March 28, 2009

NYSE Arca, wholly-owned subsidiary of NYSE Euronext (NYX), began trading the IQ Hedge Multi-Strategy Tracker ETF under the ticker symbol “QAI.” The ETF is sponsored by IndexIQ Advisors LLC.

The IQ Hedge Multi-Strategy Tracker ETF is the first ETF to track hedge fund replication and the first product by IndexIQ Advisors to list on NYSE Arca.

The Fund’s investment objective is to seek investment results that correspond (before fees and expenses) generally to the price and yield performance of its underlying index, the IQ Hedge Multi-Strategy Tracker Index (the “Underlying Index”), developed by IndexIQ. The investment objective is not fundamental and may be changed without shareholder approval.

The Underlying Index components primarily will include ETFs and/or other exchange-traded vehicles listed and traded on U.S. exchanges. The Underlying Index seeks to replicate the risk-adjusted return characteristics of the collective hedge funds that employ various hedge fund investment styles, which may include but are not limited to long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, emerging markets and other strategies commonly used by hedge fund managers.

The fund’s prospectus and other fund information are available at: www.indexiq.com.

Background on Exchange Traded Products (ETPs) on NYSE Euronext

NYSE Euronext operates the world’s largest Exchange Traded Products marketplace, and is the leading venue for Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), Exchange Traded Vehicles (ETVs) and Warrants and Certificates trading. NYSE Euronext’s offering of these products provides investors access to regulated listings as well as fast and innovative trading tools to access liquidity. NYSE Arca, NYSE Euronext’s US market for ETFs, has 662 primary ETF and 46 primary ETV listings. Additionally, NYSE Arca lists 87 ETNs, 236 Certificates, while trading all other eligible ETPs on an Unlisted Trading Privileges basis. On its European markets, NYSE Euronext has 369 primary ETFs, 73 ETV listings, 1 ETN and lists a total of 15,686 Warrants and Certificates as of the end of February 2009.

About NYSE Euronext

NYSE Euronext (NYX) is the world’s most diverse exchange group, offering a broad and growing array of financial products and services in Europe and the United States that include cash equities, futures, options, exchange-traded products, bonds, market data, and commercial technology solutions. With over 8,000 listed issues globally, NYSE Euronext’s equities markets — the New York Stock Exchange, Euronext, NYSE Arca, and NYSE Amex — represent nearly 40% of the world’s cash equities trading volume, the most liquidity of any global exchange group. NYSE Euronext also operates NYSE Liffe, the leading European derivatives business and the world’s second largest derivatives business by value of trading. NYSE Euronext offers comprehensive global commercial technology, connectivity, and market data products and services through its innovative trading solutions unit, NYSE Technologies. NYSE Euronext is part of the S&P 500 index and the only exchange operator in the S&P 100 index. For more information, please visit: www.nyx.com.

IQ HEDGE MULTI-STRATEGY INDEX

The performance data quoted above represents past performance. Past performance is not a guarantee of future results. Performance may be lower or higher than performance data quoted. Index performance is for illustrative purposes only and does not represent actual Fund performance. One cannot invest directly in an index. Index performance information prior to September 15, 2008 (the date on which the Index began calculating in real-time) is based on a hypothetical back test based on calculations of what would have been the exposure and returns of the Index had it existed at that time, which has inherent limitations. Performance data for the Index assumes reinvestment of dividends and is net of the management fees for the Index’s components, as applicable, but it does not reflect management fees, transaction costs or other expenses that you would pay if you invested in the Fund directly. Results prior to an Index component’s existence as an ETF are based on its underlying index, which do not reflect underlying management fees.

The IQ Hedge Multi-Strategy Index is comprised solely of ETFs. Hypothetical returns presented are net of underlying ETF fees, but do not reflect the deduction of management fees, taxes and other expenses. The Credit Suisse/Tremont Blue Chip Index is compiled by Credit Suisse Tremont Index LLC, is comprised solely of hedge funds, and is designed to be representative of the overall composition of the hedge fund universe. Returns presented are net of underlying manager fees and calculation fees, but do not reflect the deduction of management fees, taxes and other expenses. The HFRX Global Hedge Fund Index is compiled by Hedge Fund Research, Inc., is comprised solely of hedge funds, and is designed to be representative of the overall composition of the hedge fund universe. Returns presented are net of underlying manager fees, but do not reflect the deduction of management fees, taxes and other expenses. The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is designed to represent the equity market in general (performance data assumes reinvestment of dividends, but it does not reflect management fees, transaction costs or other expenses).

The IQ Hedge Multi-Strategy Index is the exclusive property of IndexIQ which has contracted with Standard & Poor’s (“S&P”) to maintain and calculate the Index. S&P shall have no liability for any errors or omissions in calculating the Index.

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