ProShares Debuts Merger Arb ETF

February 19, 2013

ProShares rolled out a merger-arbitrage ETF in mid-December that tracks the S&P Merger Arbitrage Index; the benchmark seeks to capture the spread between the actual stock price of a company targeted for acquisition at the time of the deal’s announcement and the price the acquiring company has said it will pay.

The ProShares Merger ETF (BATS: MRGR) will go head-to-head with IndexIQ’s IQ ARB Merger Arbitrage ETF (NYSE Arca: MNA), which employs a similar strategy and launched in 2009. However, after waivers and reimbursements are taken into account, MRGR is 1 basis point cheaper than MNA, at a net expense ratio of 0.75 percent.

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