IndexIQ Announces February 2014 M&A Deal Holdings in IQ Merger Arbitrage ETF [IndexIQ IQ ARB Merger Arbitrage ETF]

indexiqIndexIQ, a leading developer of index-based alternative investment solutions, today announced the mergers and acquisitions (M&A) deals to which investors can gain exposure in the IQ Merger Arbitrage ETF (Ticker: MNA). MNA was the industry’s first exchange-traded fund (ETF) to give investors exposure to global corporate M&A activity, which is rapidly increasing.

“Historically, investors have not had broad access to capitalize on mergers and acquisitions activity in an ETF”

MNA has more than four years of live performance, having launched on November 17, 2009, while its underlying index, the IQ Merger Arbitrage Index, has more than six years of live performance, having launched on October 31, 2007.

MNA was designed to provide capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer, a strategy generally known as “merger arbitrage.” This strategy generally seeks to take advantage of the price differential, where it exists, between the current trading price of a stock and the price of that stock at the time the deal is completed.

As of February 5, 2014, the deals that were added to and removed from the IQ Merger Arbitrage ETF are as follows:

M&A Deals Added to MNA ETF
Target Acquirer Target Target Announce Added
Name Name Sector Country Date Date
American Pacific Corporation H.I.G. Capital Management, Inc. Basic Materials United States 01/10/2014 02/05/2014
Beam Inc. Kotobuki Realty Co., Ltd. Consumer Staples United States 01/13/2014 02/05/2014
CEC Entertainment, Inc. Apollo Global Management LLC Consumer Staples United States 01/16/2014 02/05/2014
F&C Asset Management plc Bank of Montreal Financials United Kingdom 01/27/2014 02/05/2014
Foster Wheeler AG AMEC Plc Capital Goods United States 01/13/2014 02/05/2014
Osisko Mining Corporation Goldcorp, Inc. Basic Materials Canada 01/13/2014 02/05/2014
Pacer International, Inc. XPO Logistics, Inc. Transportation United States 01/06/2014 02/05/2014
Rautaruukki Oyj SSAB AB Basic Materials Finland 01/22/2014 02/05/2014
Riverbed Technology, Inc. Elliott Capital Advisors LP Technology United States 01/08/2014 02/05/2014
Texas Industries, Inc. Martin Marietta Materials, Inc. Basic Materials United States 01/28/2014 02/05/2014
Ziggo NV Liberty Global Plc Communication Services Netherlands 01/27/2014 02/05/2014
M&A Deals Removed From MNA ETF
Target Acquirer Announce Added Removed
Name Name Sector Country Date Date Date
Invensys plc Schneider Electric SA Technology United Kingdom 07/12/2013 08/05/2013 02/05/2014
Coastal Energy Co. International Petroleum Investment Co. Energy Cayman Islands 11/19/2013 12/04/2013 02/05/2014
Cole Real Estate Investments, Inc. American Realty Capital Properties Financials United States 10/23/2013 11/05/2013 02/05/2014
Solta Medical, Inc. Valeant Pharmaceuticals International Health Care United States 12/16/2013 01/06/2014 02/05/2014
ViroPharma Incorporated Shire Plc Health Care United States 11/11/2013 12/04/2013 02/05/2014
Health Management Associates Community Health Systems, Inc. Health Care United States 07/30/2013 08/05/2013 02/05/2014
Harris Teeter Supermarkets Inc The Kroger Co. Consumer Staples United States 07/09/2013 08/05/2013 02/05/2014
Costa Inc. Class A Essilor International SA Consumer Cyclicals United States 11/08/2013 01/06/2014 02/05/2014
Blyth, Inc. CVSL, Inc. Consumer Staples United States 10/29/2013 11/05/2013 02/05/2014
BRE Properties, Inc. Class A Essex Property Trust, Inc. Financials United States 12/09/2013 01/06/2014 02/05/2014
CapitalSource Inc. PacWest Bancorp Financials United States 07/22/2013 08/05/2013 02/05/2014
Celesio AG McKesson Corp. Health Care Germany 10/24/2013 11/05/2013 02/05/2014
Home Federal Bancorp, Inc. Banner Corp. Financials United States 09/24/2013 10/03/2013 02/05/2014
Leap Wireless International, Inc. AT&T, Inc. Communication Services United States 07/12/2013 08/05/2013 02/05/2014
Life Technologies Corporation Thermo Fisher Scientific, Inc. Health Care United States 04/15/2013 05/03/2013 02/05/2014
Omnicom Group Inc Publicis Groupe SA Consumer Cyclicals United States 07/28/2013 08/05/2013 02/05/2014
Valassis Communications, Inc. M&F Worldwide Corp. Consumer Cyclicals United States 12/18/2013 01/06/2014 02/05/2014
Warrnambool Cheese and Butter Factory Murray Goulburn Co-operative Co. Consumer Staples Australia 10/18/2013 12/04/2013 02/05/2014

“Historically, investors have not had broad access to capitalize on mergers and acquisitions activity in an ETF,” said Adam Patti, chief executive officer at IndexIQ. “The Merger Arbitrage ETF is a hedged strategy designed to take advantage of price disparities that exist in merger activity and strengthen investor portfolios by buying below the target price and realizing the capital appreciation if the deal closes at or above the target price. As such a strategy had not historically been accessible in an ETF before the launch of MNA more than four years ago, we are very excited about providing investors with this liquid, transparent, low cost, and easily tradable product.”

Merger Arbitrage funds typically have the potential to benefit from buying target companies below the target price. The “spread” in price, the difference between the target price and market price, can be quite lucrative for investors, especially if there are competitive bids for a company. Given today’s relatively low corporate valuations and the significant amount of cash on corporate balance sheets, industry experts forecast a rapid increase in M&A activity.

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