New ETF Focuses On "Merger Arbitrage"
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Today the first merger arbitrage ETF was introduced on the NYSE Arca by IndexIQ. The IQ ARB Merger Arbitrage ETF (NYSE: MNA) seeks 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."
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.
The ETF only traded 3,801 shares on its first day, closing at $25.25.
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.
The ETF only traded 3,801 shares on its first day, closing at $25.25.
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