Play M&A Activity Like a Pro With This ETF

MNA’s strategy might “may sound a bit risky, but the strategy produces a calm, low-risk ETF. MNA has less than half the volatility of the S&P 500 Index. And it has a solid track record. It’s up 13 percent in the past two years, compared with 7 percent for the HFR Merger Arbitrage Index, which tracks merger arbitrage hedge funds,” reports Eric Balchunas for Bloomberg.

Additionally, M&A funds also provide a diversification factor to an investment portfolio. According to Morningstar, these types of funds are 0.66 correlated to the S&P Index – investments move perfectly in lockstep when correlation is at 1.0. Additionally, funds that arbitrage a broad range of markets like M&A have a correlation of 0.25 to the S&P 500. [Nifty Hedge Fund ETFs]

Top 10 holdings in MNA currently include Baker Hughes (NYSE: BHI), Allergan (NYSE: AGN) and Time Warner Cable (NYSE: TWC).

Investors have grown to like MNA’s story as the ETF has more than quadrupled in size to $100 million in assets under management over the past year, according to Bloomberg.

IQ Merger Arbitrage ETF