News Column

IndexIQ Announces September 2014 M&A Deal Holdings in IQ Merger Arbitrage ETF (Ticker: MNA)

September 3, 2014

MNA is designed to provide exposure to accelerating global M&A activity; ETF was the first merger arbitrage ETF in the market

RYE BROOK, N.Y.--(BUSINESS WIRE)-- 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 August 4, 2014, the deals that were added to and removed from the IQ Merger Arbitrage ETF are as follows:

         
M&A Deals Added to MNA ETF
TargetAcquirerTargetTargetAnnounceAdded
Name   Name   Sector   Country   Date   Date
Bally Technologies, Inc. Scientific Games Corp. Consumer Cyclicals United States08/01/201409/04/2014
El Paso Pipeline Partners, L.P. Kinder Morgan, Inc. Utilities United States08/10/201409/04/2014
InterMune, Inc. Roche Holding AG Health Care United States08/24/201409/04/2014
International Rectifier Corporation Infineon Technologies AG Technology United States08/20/201409/04/2014
Kinder Morgan Energy Partners, L.P. Kinder Morgan, Inc. Utilities United States08/10/201409/04/2014
Kinder Morgan Management, LLC Kinder Morgan, Inc. Utilities United States08/10/201409/04/2014
OmniVision Technologies, Inc. Omnivision Technologies, Inc. Capital Goods United States08/14/201409/04/2014
Swiss National Insurance Company Ltd Helvetia Holding AG Financials Switzerland07/07/201409/04/2014
Tim Hortons Inc. Burger King Worldwide, Inc. Consumer Staples Canada08/26/201409/04/2014
TUI Travel PLC   TUI AG   Consumer Cyclicals   United Kingdom   06/27/2014   09/04/2014
 
 
M&A Deals Removed from MNA ETF
Target   Acquirer       Announce   Added   Deal
Name   Name   Sector   Country   Date   Date   Result
Questcor Pharmaceuticals, Inc. Mallinckrodt Plc Health Care United States04/07/201405/05/2014 Completed
Kentz Corporation Limited SNC-Lavalin Group, Inc. Capital Goods United Kingdom06/23/201407/07/2014 Completed
Hillshire Brands Company Tyson Foods, Inc. Consumer Staples United States05/29/201406/04/2014 Completed
Susser Holdings Corporation Energy Transfer Partners LP Consumer Staples United States04/28/201405/05/2014 Completed
Corio N.V. Klepierre SA Financials Netherlands07/29/201408/05/2014 Min Wt
Orbital Sciences Corporation Alliant Techsystems, Inc. Capital Goods United States04/29/201406/04/2014 Min Wt
Time Warner Inc. 21st Century Fox, Inc. Consumer Staples United States07/16/201408/05/2014 Cancelled
TriQuint Semiconductor, Inc.   RF Micro Devices, Inc.   Technology   United States   02/24/2014   03/05/2014   Max Age
 


“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;
  • 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.

    IDX001562.090215




    MacMillan Communications

    Mike MacMillan/Chris Sullivan

    212.473.4442

    mike@macmillancom.com



    Source: IndexIQ


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