IndexIQ will begin trading its new “IQ Hong Kong Small Cap ETF” (NYSE:HKK) Wednesday May, 18 2011. The IQ Hong Kong Small Cap ETF (NYSE Arca: HKK) seeks to track, before fees and expenses, the performance of the IQ Hong Kong Small Cap Index. The IQ Hong Kong Small Cap Index is floatadjusted market cap-weighted and seeks to provide investors with a means of tracking the overall performance of small cap Hong Kong companies.
Total Annual Fund Operating Expenses 0.69%
PRINCIPAL INVESTMENT STRATEGIES
The Fund employs a “passive management” – or indexing – investment approach designed to track the performance of the Underlying Index, which was developed by Financial Development Holdco LLC (“IndexIQ”), the parent company of IndexIQ Advisors LLC, the Fund’s investment advisor (the “Advisor”).
The Underlying Index is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in Hong Kong. The Underlying Index Components that are eligible for inclusion in the Underlying Index include the following characteristics, measured as of each quarterly rebalance date:
- Issuer domiciled in Hong Kong;
- Primary stock exchange listing in Hong Kong;
- Minimum average market capitalization of $150 million for the prior 90 days and as of the quarterly rebalance date;
- Maximum average market capitalization equal to bottom 15 percent ranking of companies in Hong Kong based on market capitalization for the prior 90 days (the “Market Cap Ceiling”);
- Minimum average daily trading volume of at least $1 million for the prior 90 days; and
- Minimum monthly volume of 250,000 shares each month over the prior six months.
Securities of issuers with recent stock exchange listings (i.e., recent initial public offerings) may be added to the Underlying Index on a quarterly basis, provided that the companies meet all eligibility criteria and have been trading for more than 10 trading days. Existing Underlying Index Components whose average market capitalization falls below $100 million or increases above the level 65% higher than the Market Cap Ceiling for the 90 days prior to any rebalancing date will no longer be eligible for inclusion.
The Underlying Index Components are selected quarterly in connection with the reconstitution of the Underlying Index. Their respective weights are rebalanced quarterly in connection with the rebalance of the Underlying Index.
As of December 31, 2010, the U.S. dollar-denominated market capitalizations of the Underlying Index Components ranged from approximately $450 million to approximately $2.5 billion. For additional information about the Fund’s principal investment strategies, see “Additional Description of the Principal Strategies of the Funds.”
For the complete prospectus click: HERE