{"id":1329,"date":"2025-07-10T17:37:00","date_gmt":"2025-07-10T17:37:00","guid":{"rendered":"http:\/\/8b4ae5d4-0616-4d23-be62-e2d4a21d3d95"},"modified":"2025-07-10T17:37:00","modified_gmt":"2025-07-10T17:37:00","slug":"corey-hoffstein-merger-arbitrage-isnt-just-for-institutions-anymore-heres-how-you-can-use-it","status":"publish","type":"episode","link":"https:\/\/advisoranalyst.com\/podcast\/episode\/corey-hoffstein-merger-arbitrage-isnt-just-for-institutions-anymore-heres-how-you-can-use-it\/","title":{"rendered":"Corey Hoffstein: Merger Arbitrage Isn\u2019t Just for Institutions Anymore \u2014 Here\u2019s How You Can Use It"},"content":{"rendered":"<p>Forget what you thought about merger arbitrage \u2014 it\u2019s no longer out of reach for individual investors and advisors.<\/p>\n<p>In this episode, Corey Hoffstein, CIO at Newfound Research and co-creator of Return Stacked ETFs, joins us for a deep dive into merger arbitrage \u2014 a long-used institutional strategy that\u2019s now accessible to retail and advisor portfolios via the RSBA ETF (<a rel=\"noreferrer noopener\" target=\"_blank\" href=\"https:\/\/links.advisoranalyst.com\/rsba\">Return Stacked Bonds &amp; Arbitrage ETF<\/a>)Corey explains that merger arbitrage isn\u2019t just about betting on deals; it\u2019s about systematically capturing a risk premium tied to time and deal closure uncertainty. With low correlation to stocks, bonds, and credit spreads, merger arb serves as a powerful diversifier \u2014 especially in today\u2019s tight credit environment. The discussion covers how RSBA overlays this risk premium on top of core U.S. Treasuries, allowing investors to enhance returns without sacrificing their bond sleeve. Corey unpacks the return stacking framework, behavioral benefits, and why this method reduces &#8220;line item risk&#8221; while expanding portfolio breadth. This isn\u2019t just theory \u2014 it\u2019s a practical way for advisors and investors to get exposure to uncorrelated return streams, preserve core holdings, and finally access what institutions have done for decades.Chapters<\/p>\n<p>00:00 \u2013 Introduction: Why Merger Arb is Timely01:00 \u2013 What is Merger Arbitrage? Mechanics of the Strategy03:00 \u2013 Risk Premium vs Arbitrage: What You\u2019re Really Capturing04:00 \u2013 How Merger Arb Correlates (or Doesn\u2019t) with Stocks, Bonds, and Credit05:30 \u2013 Why Tight Credit Spreads Make Merger Arb a Strong Alternative07:00 \u2013 What RSBA Is and How It\u2019s Constructed08:30 \u2013 Bonds + Merger Arb = Corporate Bond Alternative?10:00 \u2013 Return Stacking Explained: Keep Your Core Beta, Add a Layer12:00 \u2013 Why Merger Arb Is Historically Undervalued by Advisors13:30 \u2013 Behavioral Obstacles and Reducing Line Item Risk15:00 \u2013 Breadth vs Depth in Diversification: Expanding Risk Premiums16:30 \u2013 From T-Bills + Arb to Treasuries + Arb: A Better Structural Design17:00 \u2013 Building a \u201cHyper Diversified\u201d Portfolio with Return Stacking18:30 \u2013 How Stacking Reduces Tracking Error and Behavioral Risk19:30 \u2013 Democratizing Portable Alpha for Every Investor20:00 \u2013 Closing Remarks: The Future of Diversification Is Here<\/p>\n<h4>\ud83d\udca1 Key Takeaways<\/h4>\n<ul>\n<li>Merger arbitrage is a true, durable risk premium, not a speculative bet \u2014 it compensates investors for time and deal break risk post-announcement.<\/li>\n<li>RSBA combines Treasuries and merger arb into a single ETF, offering a compelling alternative to corporate credit without the same economic exposure.<\/li>\n<li>Return stacking allows investors to \u201cadd without subtracting\u201d, enhancing portfolios with diversifiers while retaining core holdings.<\/li>\n<li>Behavioral issues like tracking error and client discomfort are reduced by maintaining traditional exposures while quietly layering on return streams.<\/li>\n<li>You no longer need to give up your bonds to get alpha. With ETFs like RSBA, you can have both \u2014 and do it with institutional-grade tools.<\/li>\n<\/ul>\n<h4>More&#8230;<\/h4>\n<p><a rel=\"noreferrer noopener\" target=\"_blank\" href=\"https:\/\/links.advisoranalyst.com\/return-stacked-etfs\">Return Stacked ETFs<\/a><a rel=\"noreferrer noopener\" target=\"_blank\" href=\"https:\/\/links.advisoranalyst.com\/rsba\">RSBA<\/a>#ReturnStacking #MergerArbitrage #CoreyHoffstein #InvestmentStrategies <span>#alternativeinvesting<\/span>Copyright \u00a9 AdvisorAnalyst<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Forget what you thought about merger arbitrage \u2014 it\u2019s no longer out of reach for individual investors and advisors.n<\/p>\n<p>In this episode, Corey Hoffstein, CIO at Newfound Research and co-creator of Return Stacked ETFs, joins us for a deep dive into merger arbitrage \u2014 a long-used institutional strategy that\u2019s now accessible to retail and advisor portfolios via the RSBA ETF (<a rel=\"noreferrer noopener\" target=\"_blank\" href=\"https:\/\/links.advisoranalyst.com\/rsba\">Return Stacked Bonds &amp; Arbitrage ETF<\/a>)nnCorey explains that merger arbitrage isn\u2019t just about betting on deals; it\u2019s about systematically capturing a risk premium tied to time and deal closure uncertainty. With low correlation to stocks, bonds, and credit spreads, merger arb serves as a powerful diversifier \u2014 especially in today\u2019s tight credit environment. The discussion covers how RSBA overlays this risk premium on top of core U.S. Treasuries, allowing investors to enhance returns without sacrificing their bond sleeve. Corey unpacks the return stacking framework, behavioral benefits, and why this method reduces &#8220;line item risk&#8221; while expanding portfolio breadth. This isn\u2019t just theory \u2014 it\u2019s a practical way for advisors and investors to get exposure to uncorrelated return streams, preserve core holdings, and finally access what institutions have done for decades.nnChapters<\/p>\n<p>n00:00 \u2013 Introduction: Why Merger Arb is Timelynn01:00 \u2013 What is Merger Arbitrage? Mechanics of the Strategynn03:00 \u2013 Risk Premium vs Arbitrage: What You\u2019re Really Capturingnn04:00 \u2013 How Merger Arb Correlates (or Doesn\u2019t) with Stocks, Bonds, and Creditnn05:30 \u2013 Why Tight Credit Spreads Make Merger Arb a Strong Alternativenn07:00 \u2013 What RSBA Is and How It\u2019s Constructednn08:30 \u2013 Bonds + Merger Arb = Corporate Bond Alternative?nn10:00 \u2013 Return Stacking Explained: Keep Your Core Beta, Add a Layernn12:00 \u2013 Why Merger Arb Is Historically Undervalued by Advisorsnn13:30 \u2013 Behavioral Obstacles and Reducing Line Item Risknn15:00 \u2013 Breadth vs Depth in Diversification: Expanding Risk Premiumsnn16:30 \u2013 From T-Bills + Arb to Treasuries + Arb: A Better Structural Designnn17:00 \u2013 Building a \u201cHyper Diversified\u201d Portfolio with Return Stackingnn18:30 \u2013 How Stacking Reduces Tracking Error and Behavioral Risknn19:30 \u2013 Democratizing Portable Alpha for Every Investornn20:00 \u2013 Closing Remarks: The Future of Diversification Is Heren<\/p>\n<h4>\ud83d\udca1 Key Takeaways<\/h4>\n<ul>\n<li>Merger arbitrage is a true, durable risk premium, not a speculative bet \u2014 it compensates investors for time and deal break risk post-announcement.<\/li>\n<li>RSBA combines Treasuries and merger arb into a single ETF, offering a compelling alternative to corporate credit without the same economic exposure.<\/li>\n<li>Return stacking allows investors to \u201cadd without subtracting\u201d, enhancing portfolios with diversifiers while retaining core holdings.<\/li>\n<li>Behavioral issues like tracking error and client discomfort are reduced by maintaining traditional exposures while quietly layering on return streams.<\/li>\n<li>You no longer need to give up your bonds to get alpha. With ETFs like RSBA, you can have both \u2014 and do it with institutional-grade tools.<\/li>\n<\/ul>\n<h4>More&#8230;<\/h4>\n<p>n<a rel=\"noreferrer noopener\" target=\"_blank\" href=\"https:\/\/links.advisoranalyst.com\/return-stacked-etfs\">Return Stacked ETFs<\/a>n<a rel=\"noreferrer noopener\" target=\"_blank\" href=\"https:\/\/links.advisoranalyst.com\/rsba\">RSBA<\/a>nnn#ReturnStacking #MergerArbitrage #CoreyHoffstein #InvestmentStrategies <span>#alternativeinvesting<\/span>nnnCopyright \u00a9 AdvisorAnalyst<\/p>\n","protected":false},"author":1,"featured_media":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"categories":[18],"tags":[],"_links":{"self":[{"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/episode\/1329"}],"collection":[{"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/episode"}],"about":[{"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/types\/episode"}],"author":[{"embeddable":true,"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/comments?post=1329"}],"version-history":[{"count":0,"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/episode\/1329\/revisions"}],"wp:attachment":[{"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/media?parent=1329"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/categories?post=1329"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisoranalyst.com\/podcast\/wp-json\/wp\/v2\/tags?post=1329"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}