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After a Solid Q3, Can M&A ETF Soar in Q4?

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It was a great Q3 for mergers and acquisitions (M&A) that were on hold amid the peak of coronavirus-led lockdowns. A flurry of deals in September led to a record Q3 with more than $1 trillion worth transactions globally, according to Refinitiv data, as quoted on Reuters.

M&A activity skyrocketed 80% sequentially in Q3. These include the announcements of Nvidia-Arm deal for $40 billion, the Microsoft-ZeniMax Media deal for $7.5 billion, the Gilead Sciences–Immunomedics deal for about $21 billion, the Verizon Communications-America Movil deal for about $6.9 billion and ByteDance’s selection of Oracle as its technology partner in the United States.

While the sky-high valuation of stocks may slow down the deal-making momentum in Q4, rock-bottom interest rate levels should keep favoring the space. IQ Merger Arbitrage ETF (MNA - Free Report) has amassed about $714.8 million in assets so far. The underlying IQ Merger Arbitrage Index seeks to identify opportunities in companies involved in announced mergers, acquisitions and other buyout-related transactions. MNA has gained about 7.4% in the past three months.

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