NYLI Merger Arbitrage ETF

NYLI Merger Arbitrage ETF (MNA) tracks the NYLIM Merger Arbitrage Index. It buys shares of companies that have agreed to be acquired, and in stock-for-stock deals it also shorts the buyer's shares. Its returns have moved little with the stock market: its one-year beta was 0.11 as of October 27, 2026. Its 0.78% expense ratio is below the 0.97% average of three similar funds, but it paid no income in the last year.

• Over the year to Oct 27, 2026, MNA returned +2.6%, 4th of 4 among similar funds.
• Its 5-year annualized return was +2.5% and its 10-year +2.8%.
• In the 2020 COVID crash it fell 16.2% and regained its old high 6.4 months after the low.
• Its worst full calendar year was 2021 (-3.2%); its best was 2025 (+8.6%).
• The deepest fall in its price history was 16.7% (Jan 24, 2020 to Mar 18, 2020), recovered by Sep 29, 2020.

As of Jul 31, 2026, the fund held 53 securities; the ten largest made up 35.95% of assets, and 9.73% sat in cash and money-market holdings.

• Over the three months to Jul 31, 2026, investors added a net $1.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -0.42%, +0.65%, +0.06%.

When one company agrees to buy another, the target's stock usually trades a little below the agreed price until the deal closes. That gap is called the "spread." MNA tracks an index built to capture it. The fund's advisor, part of New York Life, also runs the index. To get in, a deal must be friendly, meaning the target's board recommends that shareholders accept. It must also meet minimum size, liquidity and spread tests, and the target must trade in a developed market, including the U.S. In deals paid in stock, the index also shorts the buyer's shares. A short position is a bet that a stock will fall.

The index rebalances every month. It weights holdings by market-value ranking and caps each one at 7.5% at each rebalance. A company leaves when its deal closes, when the deal is called off or has dragged on more than a year since it was announced, or when it fails the spread and price tests. As of July 31, 2026, the largest holdings were Teck Resources (5.1%), Norfolk Southern (4.3%) and Electronic Arts (4.0%).

When there aren't enough eligible deals, the index puts the spare money in Treasury bills and short-term bond ETFs. On those assets the fund is not doing merger arbitrage. Cash was 9.7% of assets as of July 31, 2026. The fund also used 23 swap contracts with Morgan Stanley. Turnover was 335%, which means the portfolio is replaced several times a year.

• MNA charges 0.78% a year, versus an average of 0.97% for the similar funds below (2nd 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 $80 in the first year and $966 over 10 years (assuming a 5% annual return).

Its returns depend mostly on whether announced deals close, not on the stock market, and its one-year beta was 0.11 as of October 27, 2026.

MNA could add a return stream with little link to stock prices, but it is not crash-proof. From January 24 to March 18, 2020, it fell 16.7% and took about 6.4 months to recover. In 2022 its deepest drop was 6.4%, yet it took about 25 months to get back to its peak. That is a long wait for anyone selling shares to cover spending. Its worst calendar year was 2021, at −3.27%. It launched in 2009, so it has no 2008 record. It paid no distributions in the year through October 27, 2026, so it is not an income source. On the SEC's $10,000 example, its 0.78% expense ratio costs $80 in year one and $966 over ten years. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).