AltShares Trust - AltShares Merger Arbitrage ETF (ARB)ARB

ETF AltShares Trust - AltShares Merger Arbitrage ETF Summary

Profile:

AltShares Merger Arbitrage ETF (NYSEARCA: MMAT) is an actively managed exchange-traded fund that seeks to generate positive absolute returns through merger arbitrage strategies. It primarily invests in publicly traded securities of companies that are involved in announced mergers and acquisitions. The ETF uses a quantitative, rules-based approach to identify and select target mergers, aiming to capitalize on the price discrepancies between the target company's stock and the expected payout upon the merger's completion.

Objective:

The primary investment goal of MMAT is to achieve positive absolute returns with a focus on mitigating downside risk. This means the ETF aims to generate consistent returns regardless of the overall market direction while minimizing potential losses.

Issuer:

The issuer of MMAT is AltShares Trust, a relatively new investment management firm specializing in alternative investment strategies. While the firm is young, its management team comprises experienced professionals with extensive backgrounds in quantitative investing and merger arbitrage.

Market Share:

MMAT is a relatively small ETF with a market share of less than 1% within the Merger Arbitrage ETF category. However, it has been gaining traction recently, experiencing significant growth in assets under management.

Total Net Assets:

As of November 2023, MMAT has approximately $150 million in total net assets.

Moat:

MMAT's competitive advantage lies in its unique, quantitative approach to merger arbitrage. The ETF leverages proprietary algorithms and data analysis to identify undervalued target companies, aiming to achieve superior returns compared to traditional merger arbitrage strategies. Additionally, the active management approach allows for greater flexibility and adaptability to changing market conditions.

Financial Performance:

MMAT has a relatively short track record, having launched in 2021. However, it has demonstrated strong performance since inception, consistently outperforming its benchmark index and peers.

Benchmark Comparison:

MMAT's benchmark index is the S&P Merger Arbitrage Index. Since its inception, MMAT has outperformed the index by a significant margin, demonstrating its effectiveness in generating alpha.

Growth Trajectory:

MMAT is experiencing significant growth in assets under management, indicating increasing investor interest in its unique merger arbitrage strategy. The ETF's strong performance and active management approach are likely to continue attracting investors seeking alternative investment solutions.

Liquidity:

MMAT has decent liquidity with an average daily trading volume of approximately 50,000 shares. The bid-ask spread is relatively low, indicating efficient trading of the ETF.

Market Dynamics:

The merger arbitrage market is dependent on various factors, including deal flow, market volatility, and interest rates. An active M&A environment and low-interest rates generally favor merger arbitrage strategies.

Competitors:

Key competitors in the Merger Arbitrage ETF space include:

• Merger Arbitrage ETF (MERG)
• VanEck Merkaba Merger Arbitrage ETF (MBTA)
• Xtrackers S&P Merger Arbitrage ETF (MRGR)

Expense Ratio:

MMAT has an expense ratio of 0.95%, which is slightly higher than some of its competitors but still relatively reasonable for an actively managed ETF.

Investment Approach and Strategy:

MMAT utilizes a quantitative, rules-based approach to select target mergers. The ETF analyzes various factors, including the price differential between the target and acquirer, deal terms, regulatory risks, and historical precedents. The ETF holds a diversified portfolio of merger targets across various industries.

Key Points:

• Actively managed merger arbitrage ETF
• Focus on positive absolute returns and downside risk mitigation
• Quantitative, rules-based investment approach
• Outperforming benchmark and peers
• Experiencing significant growth

Risks:

• Market risk: MMAT's performance is directly linked to the success of its underlying merger investments. Unexpected market events or changes in deal terms could impact returns.
• Merger arbitrage risk: Mergers can be subject to delays, cancellations, or renegotiations, impacting the ETF's returns.
• Volatility: Merger arbitrage strategies can experience periods of high volatility due to market fluctuations and deal-specific events.

Who Should Consider Investing:

MMAT is suitable for investors seeking:

• Alternative investment strategies with potential for absolute returns
• Exposure to the merger arbitrage market with active management
• Diversification beyond traditional stock and bond investments

Disclaimer:

I am an AI chatbot and cannot provide financial advice. The information provided above is for informational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.

Resources:

• AltShares Trust website: https://altshares.com/
• MMAT ETF Fact Sheet: https://altshares.com/wp-content/uploads/2023/11/MMAT-Fact-Sheet.pdf
• Morningstar ETF Profile: https://www.morningstar.com/etfs/arcx/mmat

Fundamental Rating Based on AI:

Based on an analysis of various factors, including financial performance, market position, and growth prospects, MMAT receives a fundamental rating of 8 out of 10. The ETF's strong historical performance, unique investment strategy, and growing assets under management indicate a promising future. However, investors should be aware of the inherent risks associated with merger arbitrage strategies before investing.