ProShares Plans M&A, Private Equity ETFs

April 02, 2012

ProShares registers specialized ETFs aimed at mergers and takeovers, and private equity, respectively.

ProShares, the largest purveyor of leveraged and inverse ETFs, filed regulatory paperwork to bring to market two index ETFs focused on alternative investments—one targeting mergers and acquisitions and the other seeking exposure to private equity.

The ETFs are:

  • ProShares Merger Arbitrage ETF, which aims to capture the spread between the stock price of a target company at the time the deal is announced, and the price that the acquiring company will pay
  • ProShares Listed Private Equity ETF, which will track an index of publicly listed companies in the private equity space


The filing with the Securities and Exchange Commission didn’t specify the indexes, ticker symbols or the proposed annual expense ratios of the two funds.

The Proshares Merger Arbitrage ETF will be joining a number of merger and acquisition ETPs that have come to market in the past couple of years, as ETF providers look to develop products that can perform in periods of lackluster economic growth. The ETF focused on private equity appears to be in a class by itself among U.S. exchange-traded products.

The most direct competition for the ProShares M&A fund is the IQ Merger Arbitrage ETF (NYSEArca: MNA), which has $25.6 million in assets, according to data compiled by IndexUniverse. Credit Suisse also has two arbitrage ETPs in an ETN wrapper. Those are the Credit Suisse Merger Arbitrage Liquid Index Exchange Traded Notes (NYSEArca: CSMA), which has $91.6 million in assets; and a double-exposure cousin, the 2X Monthly Leveraged Credit Suisse Merger Arbitrage Liquid Index (Net) ETN (NYSEArca: CSMB), which has $23.6 million in assets.

ProShares said that both indexes use a mathematical approach and can gain exposure using representative sampling, meaning the funds don’t have to own all the underlying components in their respective indexes.


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