First Trust is listing a hedge fund-style merger arbitrage ETF in the US, with a hedge-fund style fee.
The First Trust Merger Arbitrage ETF (MARB) will be actively managed and exploit the differences between companies’ share prices when mergers and acquisitions are announced.
These differences – called “spreads” – in share prices typically exists due to risks about whether the deal will fall through or whether the terms will come unstuck.
MARB will exploit them by buying the stock of the company being acquired while short selling the stock of the acquirer.
The fund will be run day to day by Vivaldi Asset Management. When there are no M&A deals going on, the fund will hold cash.
The fee is a hedge fund-style 1.94%, making MARB one of the most expensive US ETFs.
Analysis – what are the most expenisve ETFs?
Today’s listing made me wonder: what are the most expensive ETFs listed in the United States. According to ETF.com, these are the top three:
Fund NameTotal FeeVanEck Vectors BDC Income ETF9.62%Virtus Private Credit Strategy ETF7.64%Teucrium Wheat Fund3.81%
The reason these are so expensive is because of acquired fund fees. The VanEck and Virtus funds invest in other funds, which themselves charge fees. Of MARB's total fee, 1.25% of it is management fee.