This is an actively managed ETF that does not track a specific index. It combines merger arbitrage, volatility arbitrage, and corporate event strategies. It spreads its investments across stocks, closed-end funds, rights, and derivatives, and targets long-term capital growth.

It suits investors who want to blend alternative strategies that move differently from stocks and bonds into part of their portfolio. Investors should understand the strategy structure before approaching it.

It is an ETF run with an active management approach by Mast Investments.

The fund runs merger arbitrage, which targets price gaps in stocks involved in announced mergers and acquisitions, volatility arbitrage, which exploits differences in implied volatility, and other corporate event strategies. Each strategy is hedged to dampen fluctuations, and when opportunities are scarce, the fund raises its allocation to Treasuries, short-term bonds, and cash equivalents.

• Access to hedge-fund-style arbitrage strategies in a listed ETF format
• Management goal of dampening net asset value swings by hedging each strategy
• An alternative source of returns that aims for low correlation with the stock market
• Flexible asset allocation that waits in cash equivalents when no opportunities arise

Assets under management (AUM) stand at $50.7M, and the total expense ratio is 0.99% per year.

Active alternative strategy ETFs tend to carry higher fees than core index ETFs, and their trading volume is often thinner than that of large products. When trading, it is safer to check the bid-ask spread and use limit orders.

The performance of arbitrage strategies depends on how active merger and acquisition deals are and whether announced deals close as scheduled. In periods when deals frequently collapse, performance is held back, while in periods when deals close smoothly, returns tend to be steady.

When stock market volatility rises, money tends to flow into alternative strategies with low correlation. Conversely, when the index rallies strongly, interest can fade because of relatively weaker returns. Its size is still at the level of a newly launched product.

The advantage is that it seeks a return source different from the stock market, while reliance on active management and a short track record are drawbacks.

Long-running products in the same merger arbitrage space include MNA and ARB, which are useful for comparing performance trends and costs. If you want to broaden return sources that are independent of market direction, a product such as DBMF, which uses a managed futures strategy, is also a candidate. However, comparison category data is still limited, so a table-style peer comparison is difficult, and it is better to review products based on the nature of their strategies.

This ETF is not a product that follows an index but one in which you buy the management strategy itself. Before buying, it is wise to check the strategy composition, costs, and trading conditions separately.

Merger failures and sudden volatility swings are the main paths to losses. Even with hedges in place, the fund cannot fully avoid price movements in underlying assets, and when the market tilts heavily in one direction, several strategies can be shaken at the same time.

Consider it as a way to add a small amount of a different type of return source to a portfolio with a heavy equity weighting. It is not suitable as a replacement for core assets, and we recommend making a decision after checking strategy weightings and costs in the management report.