MNA does not hold shares of Comcast or Time Warner Cable. Time Warner Cable entered MNA in March 2014, but the ETF’s holdings have a shelf life of 360 days within the fund, so when MNA rebalanced last month, Time Warner Cable departed. That disciplined, rules-based methodology removes emotion from the equation, in turn diminishing investor risk.
The strategy works and does so with relatively low correlations to traditional equity indexes. MNA has offered nearly double the performance of HFR Merger Arbitrage Index over the past two years. 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 MNA have a correlation of 0.25 to the S&P 500. [Nifty Hedge Fund ETFs]
Investors like MNA’s story as highlighted by the $37.1 million added to the ETF this year. MNA’s top holdings currently include Kraft (NasdaqGS: KRFT), Baker Hughes (NYSE: BHI) and Pharmacyclics (NasdaqGS: PCYC).
IQ Merger Arbitrage ETF
