At a glance
ARB charges 0.82% a year, below the 0.94% average of the 3 funds most like it (the 3rd cheapest of 4). It has $51.1M in assets, the 2nd largest of that group; it paid 0.43% of its price in distributions over the past 12 months, annual. Over the past year it returned +3.3% with distributions reinvested (S&P 500: +11.5%), 3rd of those 4 funds; over three years it returned +5.1% a year. At its worst it fell 4.1% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 2 months after the low. Its ten largest positions make up 38.6% of the fund, out of 79 in all.
The short version
AltShares Merger Arbitrage ETF (ARB) tracks the Water Island Merger Arbitrage USD Hedged Index. It buys shares of companies that have agreed to be acquired. In stock-for-stock deals it also bets against the buyer's shares. Returns have been small but steady, and the fund has moved little with the stock market. Its 0.82% expense ratio is lower than EVNT's but higher than two other merger ETFs, MRGR (0.75%) and MNA (0.77%).
Price history
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ARB +3.3% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| ARB official prospectus, to Dec 31, 2025 | — | +5.58% | — | +3.88% | — | +4.18% |
| ARB price data to Oct 27, 2026 | +2.9% | +3.3% | +5.1% | +4.1% | — | +4.1% |
- Over the year to Oct 27, 2026, ARB returned +3.3%, 3rd of 4 among similar funds.
- Its 5-year annualized return was +4.1%.
- Its worst full calendar year was 2022 (+2.7%); its best was 2025 (+6.1%).
- The deepest fall in its price history was 5.6% (Nov 1, 2022 to May 22, 2023), recovered by Sep 12, 2023.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +2.9% | — |
| 2025 | +6.1% | +5.58% |
| 2024 | +4.1% | +4.04% |
| 2023 | +3.9% | +4.04% |
| 2022 | +2.7% | +2.59% |
| 2021 | +3.2% | +3.20% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Gained 2.7% over that stretch · deepest drop along the way 4.1%, back to its old high 1.6 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2025 | $0.1300 | -58.1% |
| 2024 | $0.3100 | -71.3% |
| 2022 | $1.0800 |
What's inside
As of Aug 31, 2026, the fund held 79 securities; the ten largest made up 38.65% of assets.
| Holding | Weight | |
|---|---|---|
| MORGAN STANLEY PRIME BROKER US Other | 8.34% | |
| TXNM Energy Inc | 4.12% | |
| Endeavor Group Holdings Inc | 4.08% | |
| ECHOSTAR CORP Bonds and notes | 3.70% | |
| Caesars Entertainment Inc | 3.62% | |
| Warner Bros Discovery Inc | 3.51% | |
| Dick's Sporting Goods Inc | 3.17% | |
| LiveRamp Holdings Inc | 2.83% | |
| Penumbra Inc | 2.78% | |
| Schroders PLC | 2.50% | |
| BioLife Solutions Inc | 2.40% | |
| Element Solutions Inc | 2.18% | |
| Roku Inc | 2.14% | |
| Norfolk Southern Corp | 2.09% | |
| NCR ATLEOS LLC Bonds and notes | 2.04% |
By country
United States 84.84%United Kingdom 4.92%Canada 4.16%Germany 2.98%Cayman Islands 2.03%By asset type
Stocks 74.25%Bonds and notes 18.15%Other 8.34%Loans 0.56%What changed recently
- Over the three months to Aug 31, 2026, investors withdrew a net $263K (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +2.18%, +0.15%, +0.15%.
How it works
ARB aims to match the Water Island Merger Arbitrage USD Hedged Index. Water Island Indices LLC built the index. It is an affiliate of Water Island Capital, the fund's adviser. Solactive AG, an unrelated firm, calculates the index. The strategy is called merger arbitrage. When a company agrees to be bought, its shares usually trade a little below the agreed price until the deal closes, because the deal could still fail. That gap is called the spread, and the index buys the target company to capture it. When the buyer pays in its own stock, the index shorts the buyer's shares at the deal's exchange ratio. Shorting means betting that a stock will fall. This locks in the spread and protects against a drop in the buyer's stock.
The index is rebalanced and rebuilt twice a month. The adviser expects 30 to 50 target companies each time. As of August 31, 2026, the index held 65 long positions and 16 short positions. When a deal closes or collapses, that money moves into cash-like holdings until the next rebuild. The fund may use swaps for its long and short positions. It uses forward and futures contracts to hedge foreign currencies back to the US dollar. Portfolio turnover was 399%.
The fund is non-diversified. As of August 31, 2026, its largest positions were an 8.3% Morgan Stanley prime broker account, TXNM Energy (4.1%), Endeavor Group (4.1%), EchoStar bonds (3.7%) and Caesars Entertainment (3.6%).
What it really costs
- ARB charges 0.82% a year, versus an average of 0.94% for the similar funds below (3rd of 4, cheapest first).
- Of that, 0.75% is the management fee; the rest covers other fund expenses.
- Using the prospectus's standard example, $10,000 invested would cost about $84 in the first year and $1,014 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| ARB | $84 | $262 | $455 | $1,014 |
In a retirement portfolio
ARB's returns have moved little with stocks, which may help offset swings elsewhere in a portfolio.
ARB's beta, a measure of how much it moves with the stock market, was 0.09 for the year to October 27, 2026. In the 2022 bear market it gained 2.7%. Its deepest drop in that stretch was 4.1%, and it recovered in about 1.6 months. Its largest decline since launch was 5.6%, from November 2022 to May 2023, and it recovered by September 2023. The prospectus shows a positive return in every calendar year from 2021 to 2025. The weakest was 2.59% in 2022. ARB launched in May 2020, so it has no record from 2008 or the 2020 crash. A collapsed deal can still cause sudden losses.
The trade-off is modest growth: 3.88% a year over five years to December 31, 2025. The yield was 0.43% as of October 27, 2026, paid once a year. Fees are 0.82% a year. Past results don't predict future ones, and any plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors seeking a diversifier: ARB's beta to stocks was 0.09, and it posted a positive return every calendar year from 2021 through 2025.
- Those who want rules-based merger arbitrage: an index rebuilt twice monthly that hedges stock deals and foreign currencies.
- Holders using IRAs or other tax-advantaged accounts, where 399% turnover and short-term gains matter less.
Look elsewhere if
- Income seekers: the yield was 0.43% as of October 27, 2026, paid only once a year.
- Cost-focused investors: the 0.82% expense ratio is higher than MRGR's 0.75% and MNA's 0.77%.
- Those seeking growth: ARB returned 3.88% a year over five years to December 31, 2025, and failed deals can cause sudden losses.
Close alternatives
Matched by holdings overlap from the latest N-PORT reports.
Net assets from each fund's latest N-PORT or annual report where available. Returns through Oct 27, 2026.Questions investors ask
Is ARB good for a retirement portfolio?
ARB may suit retirees looking for a holding that doesn't follow the stock market. Its beta was 0.09 for the year to October 27, 2026. It gained 2.7% during the 2022 bear market, and its largest drop since its 2020 launch was 5.6%. The trade-off is modest returns: 3.88% a year over five years to December 31, 2025. It has no record from 2008 or the 2020 crash.
Does ARB pay dividends?
Yes, but not much, and only once a year. As of October 27, 2026, ARB paid $0.13 per share over the previous 12 months, a yield of 0.43%. Most of the fund's return comes from closing merger spreads, not from dividends. It may not suit investors who need regular income. The 0.82% annual expense ratio also cuts into what holders keep.
What happens to ARB if a merger deal falls through?
The fund usually loses money on that position. When a deal collapses, the target's shares often fall well below the agreed price. The prospectus names this as the main risk of the strategy. Spreading money across many deals limits the damage from any one failure. The index held 65 long positions as of August 31, 2026, but several single positions were above 4% of the fund.
What's the difference between ARB and EVNT?
Both are AltShares ETFs, and their holdings overlapped 93% in the latest N-PORT reports. EVNT costs 1.31% a year, against 0.82% for ARB. As of October 27, 2026, EVNT returned 8.7% over one year and 11.3% a year over three years. ARB returned 3.3% and 5.1% over the same periods. ARB has the lower fee, but EVNT has returned more despite costing more.
Is ARB cheaper than MNA or MRGR?
No. ARB's 0.82% expense ratio is higher than MNA's 0.77% and MRGR's 0.75%. All three follow merger arbitrage strategies but hold different deals. ARB's holdings overlap 20% with MNA's and 29% with MRGR's. As of October 27, 2026, MRGR returned 7.5% a year over three years and MNA returned 5.8%, against ARB's 5.1%. MNA is larger, with $251.5 million in net assets as of July 31, 2026.