Proshares Merger ETF

ProShares Merger ETF (MRGR) tracks the S&P Merger Arbitrage Index, holding stocks of announced takeover targets and betting against their acquirers through swap contracts, aiming to capture the gap between a target's price and the deal price. It may suit those seeking returns that depend more on deals closing than on the stock market; its 0.75% fee, after a waiver, was the lowest of four similar ETFs, though it was also the smallest.

• Over the year to Oct 27, 2026, MRGR returned +5.4%, 2nd of 4 among similar funds.
• Its 5-year annualized return was +3.9% and its 10-year +3.7%.
• In the 2020 COVID crash it fell 13.2% and regained its old high 7.6 months after the low.
• Its worst full calendar year was 2022 (-4.8%); its best was 2025 (+12.0%).
• The deepest fall in its price history was 13.2% (Feb 20, 2020 to Mar 18, 2020), recovered by Nov 3, 2020.

As of Aug 31, 2026, the fund held 45 securities; the ten largest made up 25.23% of assets, and 5.36% sat in cash and money-market holdings.

• Over the three months to Aug 31, 2026, investors added a net $0.00 (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.52%, +0.19%, -0.17%.

S&P Dow Jones Indices builds the S&P Merger Arbitrage Index to track merger arbitrage. When a company announces it will acquire another, the target's shares often trade below the offered price because the deal might fail or change terms. That gap is the spread. The index picks up to 40 deals by deal size, age and performance. It owns the targets, shorts the acquirers (a position that gains if their shares fall) and holds cash for money not in a deal. The mix changes as deals are announced, withdrawn or completed.

ProShare Advisors holds most targets as shares (stocks were 91% of assets as of August 31, 2026). Short exposure generally comes through total return swaps (contracts that exchange the returns on an asset) with large banks, not direct short sales. Holdings are global (74% US, 14% UK), so the fund uses forward currency contracts to hedge currency moves. Cash typically sits in Treasury bills, repurchase agreements or a ProShares money market ETF.

Completed deals tend to bring small gains as targets rise toward the offer price. Failed deals often send targets back to pre-deal levels, with losses well beyond the spread. Turnover was 431%: the portfolio was replaced more than four times in a year. Swaps add counterparty risk, the chance a bank fails to pay.

• MRGR charges 0.75% a year, versus an average of 0.97% for the similar funds below (1st of 4, cheapest first).
• The fee includes a 1.28% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $77 in the first year and $2,256 over 10 years (assuming a 5% annual return).

Its returns depend mainly on announced takeovers closing rather than on the direction of the stock market, which it has followed only loosely.

MRGR could add returns that move little with stocks: its one-year beta, a gauge of market sensitivity, was 0.06 as of October 27, 2026. Launched in 2012, it has no 2008 record. In the 2020 COVID crash it fell 13.2%, its deepest drop, and needed about 7.6 months to recover, a reminder that panics can threaten many deals at once. In the 2022 bear market it fell 4.9% at worst and took about 18.4 months to regain its peak. Its 4.3% loss in 2022 was its worst calendar-year result. Withdrawing cash during slumps locks in losses.

Over the 12 months to October 27, 2026, it yielded 2.69%, paid in quarterly distributions. Its 0.75% expense ratio (annual fee), after a fee waiver, was below the 0.97% average of three similar ETFs. 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).