The IQ ARB Merger Arbitrage ETF, from Index IQ in Rye, N.Y., has made its debut. The product is yet another ETF designed to mimic an institutional trading strategy. In this case, the ETF aims to give retail investors a chance to benefit from mergers and acquisitions, which seem to be on the rise.

The launch was met with some initial skepticism. One money manager notes some weaknesses: it doesn't short acquiring companies and the index is rebalanced only monthly, which may not be often enough in a fast-moving deal environment. But the index may yet prove to be enough of a short-term success with investors for Index IQ. TheDeal notes that the firm founders appear to be adept at marketing financial products.

This is definitely something that can be sold, given that people intuitively get mergers. The problem comes a few years later if the performance numbers look really poor. But old pros in the fund industry are adept at dealing with that too.

For more:
- here's an article from ETF Trends
- here's the article from TheDeal

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