The BT Quantitative Equity Fund may be a fund marketer's dream - a new equity product that has an interesting story, no peers and a great track record.

BT Quantitative Equity plans to bring a special form of merger arbitrage to retail mutual fund customers willing to invest as little as $2,500. The new Bankers Trust fund will invest in a combination of S&P 500 derivatives or stocks and the stocks of companies which are the targets in acquisitions. While forms of merger arbitrage are common in hedge fund investing, Quantitative Equity appears to be the first mutual fund which will use merger arbitrage coupled with derivatives or stock investing to try to beat the S&P 500.

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