Investors can also tap into alternative strategies through specialized ETFs. For instance, the First Trust Long/Short Equity ETF (NYSEArca: FTLS) and ProShares RAFI Long/Short ETF (NYSEArca: RALS) are two long-short strategies that take both long positions in U.S. equities and pare bets with short positions.
To capture the merger-arbitrage strategy, the Index IQ Merger Arbitrage ETF (NYSEArca: MNA), Credit Suisse Merger Arbitrage Index ETN (NYSEArca: CSMA) and ProShares Merger Arbitrage ETF (NYSEArca: MRGR) provide investors with a diversified approach to a group of takeover targets. The ETFs employ a type of alternative, “directional hedge fund strategy” called merger arbitrage. Specifically, the funds capture the spread or difference between a stock’s trading price before a deal is announced and its eventual takeover price. [ETFs to Capture the Rise in M&A Activity]
Additionally, the recently launched IQ Leaders GTAA Tracker ETF (NYSEArca: QGTA) and the AdvisorShares Morgan Creek Global Tactical ETF (NYSEArca: GTAA) both follow tactical asset allocation strategies that adapt to changes in the market environment. GTAA takes a discretionary macro approach in its global tactical portfolio. [New Fund-of-Funds ETF Tries to Track the Best of the Best]
For more information on liquid alts, visit our alternatives category.
Max Chen contributed to this article