IndexIQ, 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 (NYSEARCA: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 October 2, 2014, the deals that were added to and removed from the IQ Merger Arbitrage ETF are as follows:
|MNA Deals Added to MNA ETF|
|Alere Inc.||Alere, Inc. /Private Group/||Health Care||United States||09/15/2014||10/03/2014|
|Athlon Energy, Inc.||EnCana Corp.||Energy||United States||09/29/2014||10/03/2014|
|Auxilium Pharmaceuticals, Inc.||Endo International Plc||Health Care||United States||09/16/2014||10/03/2014|
|Compuware Corporation||Thoma Bravo LLC||Technology||United States||09/02/2014||10/03/2014|
|Concur Technologies, Inc.||SAP SE||Consumer Cyclicals||United States||09/18/2014||10/03/2014|
|Conversant Inc.||Alliance Data Systems Corp.||Consumer Cyclicals||United States||09/11/2014||10/03/2014|
|Dresser-Rand Group Inc.||Siemens AG||Energy||United States||09/21/2014||10/03/2014|
|Glimcher Realty Trust||Washington Prime Group, Inc.||Financials||United States||09/16/2014||10/03/2014|
|Kodiak Oil & Gas Corp.||Whiting Petroleum Corp.||Energy||United States||07/13/2014||10/03/2014|
|Nobel Biocare Services AG||Danaher Corp.||Health Care||Switzerland||09/15/2014||10/03/2014|
|Sigma-Aldrich Corporation||Merck KGaA||Basic Materials||United States||09/22/2014||10/03/2014|
|TIBCO Software Inc.||Vista Equity Partners LLC||Technology||United States||09/29/2014||10/03/2014|
|MNA Deals Removed from MNA ETF|
|InterMune, Inc.||Roche Holding AG||Health Care||United States||08/24/2014||09/04/2014||Completed|
|Bell Aliant Inc.||BCE, Inc.||Communication Services||Canada||07/23/2014||08/05/2014||Completed|
|Panaust Limited||Guangdong Rising Assets Management Co., Ltd.||Basic Materials||Australia||05/12/2014||06/04/2014||Min Wt|
|Safeway Inc.||Cerberus Capital Management LP||Consumer Staples||United States||03/06/2014||05/05/2014||Max Age|
|Sai Global Limited||Pacific Equity Partners Pty Ltd.||Consumer Cyclicals||Australia||05/26/2014||06/04/2014||Cancelled|
|Treasury Wine Estates Limited||KKR Holdings LP||Consumer Staples||Australia||05/20/2014||06/04/2014||Cancelled|
“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.
The IQ Merger Arbitrage ETF seeks to track, before fees and expenses, the performance of the IQ Merger Arbitrage Index. The Index seeks to achieve capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer. This approach is based on a passive strategy of owning certain announced takeover targets with the goal of generating returns that are representative of global merger arbitrage activity. The Index also includes short exposure to global equities as a partial equity market hedge.
IndexIQ indexes underlie a variety of investment products, including ETFs, mutual funds, and institutional accounts. IndexIQ products are designed to be liquid, transparent, low cost,* and accessible to a broad range of investors, many of which are the first of their kind to be introduced to the market, including:
- IQ Alpha Hedge Strategy Fund (IQHIX – Institutional Share Class; IQHOX – Investor Share Class), the first open-end, no-load hedge fund replication mutual fund;
- IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first US-listed hedge fund replication Exchange-Traded Fund;
- IQ Hedge Market Neutral Tracker ETF (NYSE Arca: QMN) providing exposure to the market neutral hedge fund universe;
- IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro/Emerging Markets hedge fund replication ETF;
- IQ Merger Arbitrage ETF (NYSE Arca: MNA), the first merger arbitrage ETF;
- IQ Real Return ETF (NYSE Arca: CPI), the first US-listed “real return” ETF, which seeks to generate a real return above the rate of inflation as measured by changes in the Consumer Price Index;
- IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF), the first US Real Estate Small Cap ETF;
- IQ Global Resources ETF (NYSE Arca: GRES), the first hedged global natural resources ETF;
- IQ Global Agribusiness Small Cap ETF (NYSE Arca: CROP), the first agribusiness small cap ETF;
- IQ Global Oil Small Cap ETF (NYSE Arca: IOIL), the first global oil small cap ETF;
- IQ Canada Small Cap ETF (NYSE Arca: CNDA), the first Canada small cap ETF;
- IQ Australia Small Cap ETF (NYSE Arca: KROO), the first Australia small cap ETF.