Water Island Capital has launched the AltShares Merger Arbitrage ETF, the first ETF offered in AltShares Trust. ARB seeks to provide passive exposure to the Water Island Merger Arbitrage USD Hedged Index (WIMARBH). The ETF aims to profit from the successful completion of definitive, publicly announced mergers and acquisitions.
The Water Island Merger Arbitrage USD Hedged Index employs a proprietary rules-based framework that was derived using research from Water Island Capital over its 20-year investment history. The index, and by extension ARB, offer exposure to select definitive, publicly announced mergers and acquisitions across developed markets globally. The deals that are selected for inclusion in the index and the ETF are weighted according to a risk-constrained, liquidity-based methodology and are rebalanced twice per month.
“We are pleased to bring Water Island’s time-tested approach to merger arbitrage investing to those interested in accessing this strategy through a passively managed ETF,” says John S Orrico, Founder and CIO of Water Island Capital. “We have leveraged the insights we derived over the course of our firm’s 20-year history to build a passive ETF for investors looking to merger arbitrage investing as a way to enhance portfolio diversification.”
ARB will complement Water Island Capital’s existing actively managed event-driven product suite and seeks to satisfy investor demand for specialised ETF solutions within the alternative investment universe. ARB has a total expense ratio of 0.75% and is listed on the New York Stock Exchange.