IndexIQ, a leading developer of index-based alternative investment solutions, today announced the mergers and acquisitions (M&A) deals to which investors can gain exposure in the IQ Merger Arbitrage ETF (Ticker: MNA). MNA was the industry’s first exchange-traded fund (ETF) to give investors exposure to global corporate M&A activity, which is rapidly increasing.
MNA has more than four years of live performance, having launched on November 17, 2009, while its underlying index, the IQ Merger Arbitrage Index, has more than six years of live performance, having launched on October 31, 2007.
MNA was designed to provide capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer, a strategy generally known as “merger arbitrage.” This strategy generally seeks to take advantage of the price differential, where it exists, between the current trading price of a stock and the price of that stock at the time the deal is completed.
As of May 5, 2014, the deals that were added to and removed from the IQ Merger Arbitrage ETF are as follows:
MNA Deals Added To MNA ETF | |||||||||||||||
Target | Acquirer | Target | Target | Announce | Added | ||||||||||
Name | Name | Sector | Country | Date | Date | ||||||||||
Australand Property Group | Stockland | Financials | Australia | 04/23/2014 | 06/04/2014 | ||||||||||
Bull SA | ATOS SE | Technology | France | 05/26/2014 | 06/04/2014 | ||||||||||
Capitamalls Asia Limited | CapitaLand Ltd. | Financials | Singapore | 04/14/2014 | 06/04/2014 | ||||||||||
Chelsea Therapeutics International, Ltd. | H. Lundbeck A/S | Health Care | United States | 05/08/2014 | 06/04/2014 | ||||||||||
David Jones Limited | Woolworths Holdings Ltd. | Consumer Cyclicals | Australia | 04/09/2014 | 06/04/2014 | ||||||||||
DFC Global Corp. | Lone Star Global Acquisitions Ltd. | Financials | United States | 04/02/2014 | 06/04/2014 | ||||||||||
DIRECTV | AT&T, Inc. | Consumer Staples | United States | 05/18/2014 | 06/04/2014 | ||||||||||
Dixons Retail plc | Carphone Warehouse Group Plc | Consumer Cyclicals | United Kingdom | 05/15/2014 | 06/04/2014 | ||||||||||
Gentiva Health Services, Inc. | Kindred Healthcare, Inc. | Health Care | United States | 05/15/2014 | 06/04/2014 | ||||||||||
Goodman Fielder Limited | Goodman Fielder Ltd. /Private Group/ | Consumer Staples | Australia | 04/27/2014 | 06/04/2014 | ||||||||||
Hillshire Brands Company | Tyson Foods, Inc. | Consumer Staples | United States | 05/29/2014 | 06/04/2014 | ||||||||||
Orbital Sciences Corporation | Alliant Techsystems, Inc. | Capital Goods | United States | 04/29/2014 | 06/04/2014 | ||||||||||
Panaust Limited | Guangdong Rising Assets Management Co., Ltd. | Basic Materials | Australia | 05/12/2014 | 06/04/2014 | ||||||||||
Pinnacle Foods, Inc. | The Hillshire Brands Co. | Consumer Staples | United States | 05/12/2014 | 06/04/2014 | ||||||||||
Roland Corporation | Taiyo Pacific Partners LP | Consumer Cyclicals | Japan | 05/14/2014 | 06/04/2014 | ||||||||||
Sai Global Limited | Pacific Equity Partners Pty Ltd. | Consumer Cyclicals | Australia | 05/26/2014 | 06/04/2014 | ||||||||||
Taiyo Nippon Sanso Corporation | Mitsubishi Chemical Holdings Corp. | Basic Materials | Japan | 05/13/2014 | 06/04/2014 | ||||||||||
Treasury Wine Estates Limited | KKR Holdings LP | Consumer Staples | Australia | 05/20/2014 | 06/04/2014 | ||||||||||
VIVUS, Inc. | Aspen Investment Fund LLC | Health Care | United States | 05/28/2014 | 06/04/2014 | ||||||||||
MNA Deals Removed From MNA ETF | ||||||||||||||||||
Target | Acquirer | Announce | Added | Deal | ||||||||||||||
Name | Name | Sector | Country | Date | Date | Result | ||||||||||||
LSI Corporation | Avago Technologies Ltd. | Technology | United States | 12/16/2013 | 01/06/2014 | Completed | ||||||||||||
AMCOL International Corporation | Minerals Technologies, Inc. | Basic Materials | United States | 02/14/2014 | 03/05/2014 | Completed | ||||||||||||
F&C Asset Management plc | Bank of Montreal | Financials | United Kingdom | 01/27/2014 | 02/06/2014 | Completed | ||||||||||||
Olam International Limited | Temasek Holdings Pte Ltd. | Consumer Staples | Singapore | 03/14/2014 | 04/03/2014 | Completed | ||||||||||||
Pohjola Bank Plc Class A | OP-Pohjola Group Central Cooperative | Financials | Finland | 02/06/2014 | 04/03/2014 | Completed | ||||||||||||
Scania AB Class B | Volkswagen AG | Capital Goods | Sweden | 02/21/2014 | 04/03/2014 | Completed | ||||||||||||
Zale Corporation | Signet Jewelers Ltd. | Consumer Cyclicals | United States | 02/19/2014 | 03/05/2014 | Completed | ||||||||||||
ArthroCare Corporation | Smith & Nephew Plc | Health Care | United States | 02/03/2014 | 03/05/2014 | Completed | ||||||||||||
EPL Oil & Gas, Inc. | Energy XXI (Bermuda) Ltd. | Energy | United States | 03/12/2014 | 04/03/2014 | Completed | ||||||||||||
Osisko Mining Corporation | Goldcorp, Inc. | Basic Materials | Canada | 01/13/2014 | 02/06/2014 | Completed | ||||||||||||
AstraZeneca PLC | Pfizer Inc. | Health Care | United Kingdom | 04/28/2014 | 05/05/2014 | Cancelled | ||||||||||||
Bourbon SA | JACCAR Holdings SA | Energy | France | 03/17/2014 | 04/03/2014 | Min Wt | ||||||||||||
Chatham Lodging Trust | BlueMountain Capital Management LLC | Financials | United States | 11/04/2013 | 12/04/2013 | Max Age | ||||||||||||
Metso Oyj | The Weir Group Plc | Capital Goods | Finland | 04/01/2014 | 05/05/2014 | Cancelled | ||||||||||||
“Historically, investors have not had broad access to capitalize on mergers and acquisitions activity in an ETF,” said Adam Patti, chief executive officer at IndexIQ. “The Merger Arbitrage ETF is a hedged strategy designed to take advantage of price disparities that exist in merger activity and strengthen investor portfolios by buying below the target price and realizing the capital appreciation if the deal closes at or above the target price. As such a strategy had not historically been accessible in an ETF before the launch of MNA more than four years ago, we are very excited about providing investors with this liquid, transparent, low cost, and easily tradable product.”
Merger Arbitrage funds typically have the potential to benefit from buying target companies below the target price. The “spread” in price, the difference between the target price and market price, can be quite lucrative for investors, especially if there are competitive bids for a company. Given today’s relatively low corporate valuations and the significant amount of cash on corporate balance sheets, industry experts forecast a rapid increase in M&A activity.
The IQ Merger Arbitrage ETF seeks to track, before fees and expenses, the performance of the IQ Merger Arbitrage Index. The Index seeks to achieve capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer. This approach is based on a passive strategy of owning certain announced takeover targets with the goal of generating returns that are representative of global merger arbitrage activity. The Index also includes short exposure to global equities as a partial equity market hedge.
IndexIQ indexes underlie a variety of investment products, including ETFs, mutual funds, and institutional accounts. IndexIQ products are designed to be liquid, transparent, low cost,* and accessible to a broad range of investors, many of which are the first of their kind to be introduced to the market, including:
- IQ Alpha Hedge Strategy Fund (IQHIX – Institutional Share Class; IQHOX – Investor Share Class), the first open-end, no-load hedge fund replication mutual fund;
- IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI), the first US-listed hedge fund replication Exchange-Traded Fund;
- IQ Hedge Market Neutral Tracker ETF (NYSE Arca: QMN) providing exposure to the market neutral hedge fund universe (launch 10/4/12);
- IQ Hedge Macro Tracker ETF (NYSE Arca: MCRO), the first Global Macro/Emerging Markets hedge fund replication ETF;
- IQ Merger Arbitrage ETF (NYSE Arca: MNA), the first merger arbitrage ETF;
- IQ Real Return ETF (NYSE Arca: CPI), the first US-listed “real return” ETF, which seeks to generate a real return above the rate of inflation as measured by changes in the Consumer Price Index;
- IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF), the first US Real Estate Small Cap ETF;
- IQ Global Resources ETF (NYSE Arca: GRES), the first hedged global natural resources ETF;
- IQ Global Agribusiness Small Cap ETF (NYSE Arca: CROP), the first agribusiness small cap ETF;
- IQ Global Oil Small Cap ETF (NYSE Arca: IOIL), the first global oil small cap ETF;
- IQ Canada Small Cap ETF (NYSE Arca: CNDA), the first Canada small cap ETF;
- IQ Australia Small Cap ETF (NYSE Arca: KROO), the first Australia small cap ETF.
About IndexIQ
IndexIQ is a leading issuer of index-based liquid alternative solutions focused on absolute return, real asset and international strategies. IndexIQ solutions are offered as ETFs, Mutual Funds, Separate Accounts and Model Portfolios. IndexIQ’s philosophy is to democratize investment management by making innovative alternative investment strategies available to investors in low cost, liquid and transparent products.* IndexIQ strategies are marketed through the company’s proprietary investment products and select partnerships with leading global financial institutions. Additional information about the company and its products can be found at www.IndexIQ.com.
*IndexIQ’s ETF holdings are available daily on IndexIQ’s website. Brokerage commissions apply to ETFs. ETFs are liquid in that they are exchange-traded.
Index performance does not reflect charges and expenses associated with the Funds or brokerage commissions associated with buying and selling ETF shares. One cannot invest directly in an index.
Certain of the proposed takeover transactions in which MNA invests may be renegotiated, terminated or involve a longer time frame than originally contemplated, which may negatively impact MNA’s returns. MNA’s investment strategy may result in high portfolio turnover, which, in turn, may result in increased transaction costs to MNA and lower total returns. MNA is susceptible to foreign securities risk –since the Fund invests in foreign markets, it will be subject to risk of loss not typically associated with domestic markets, including currency transaction risk. Diversification does not eliminate the risk of experiencing investment losses. Stock prices of mid and small capitalization companies may be more volatile than those of larger companies.
Investors are reminded that all investing involves risk, including possible loss of principal. Consider the Funds’ investment objectives, risks, charges and expenses carefully before investing. A prospectus with this and other information about the Funds may be obtained by visiting www.indexiq.com or by calling (888) 934-0777. Read the prospectus carefully before investing.
IndexIQ ETFs and mutual funds are distributed by ALPS Distributors, Inc., which is not affiliated with IndexIQ.
IDX001497.0607015
Contacts:
Mike MacMillan/Chris Sullivan
212-473-4442
chris@macmillancom.com