M&A indexes getting second look after torrent of deals

Unusual dealmaking activity means strategy underperforming the S&P 500

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Investors allocated more money this quarter to a hedge fund strategy that profits from mergers and acquisitions (M&A) activity than last quarter, even though most merger arbitrage strategies have underperformed the broader stock market so far this year. The HFRX ED: Merger Arbitrage index, a benchmark for strategies that seek to profit from buying the shares of M&A targets and shorting the shares of buyers, had dropped 0.21% this year as of August 7. The S&P 500 index rose nearly