ProShares, a division of ProFunds Group, has unveiled Merger ETF (MRGR), which the company claims to be the first ETF based on a true merger arbitrage strategy.
Through the new ETF, which will be listed on BATS Exchange, the MRGR aims to generate the risk/return distinctiveness of a merger arbitrage strategy by tracking the performance of the S&P Merger Arbitrage Index.
Institutions and high-net-worth investors commonly use merger arbitrage strategies to access the information about a target company’s stock price after a proposed merger or acquisition is announced and the deal price that the acquiring company will pay for the target company.
ProShare Advisors chairman and CEO Michael Sapir said, "The goal of MRGR is to produce consistent, positive returns under virtually any market conditions."
S&P Merger Arbitrage Index has been designed to offer a merger arbitrage strategy, which uses commonly observed price changes linked with a global selection of publicly announced mergers, acquisitions and other corporate reorganizations.
ProShares manages a group of 139 ETFs, which includes Global Fixed Income, Hedge Strategies, Geared (leveraged and inverse), and Inflation and Volatility ETFs.