Additionally, the M&A ETFs may take a short position in the acquiring company or broadly short the global equity markets as a partial hedge.
For instance, MNA tracks a benchmark of announced takeover targets but also shorts the global market. Additionally, unlike the other M&A exchange traded products, MNA includes global deals, such as British soda maker Rexam PLC, which has been targeted by Ball Corp (NYSE: BLL).
CSMA, an exchange traded note, takes long positions in deal targets and also shorts positions in the acquiring firms. The ETN also takes some international exposure, covering deals in the U.S., Canada and Western Europe.
MRGR includes a group of deal targets and their acquisitiors. The ProShares option also takes long positions in acquisition target stocks and short positions in acquiring companies in stock-for-stock deals. Each short position can range between 0% to 3%, depending on the terms of the deal.
For more information on M&A funds, visit our mergers and acquisitions category.
Max Chen contributed to this article.