NEW YORK--(EON: Enhanced Online News)--Water Island Capital, advisor to The Arbitrage Funds and a global event-driven asset manager with $3.5 billion under management as of October 1, 2013, today announced that The Arbitrage Event-Driven Fund I share (AEDNX) has earned a four-star overall Morningstar Rating™ based on strong three-year risk-adjusted performance since an October 1, 2010 inception. In addition, The Arbitrage Credit Opportunities Fund I share (ACFIX) recently reached its one year anniversary and was ranked in the top 9% of 213 Non-traditional Bond Funds rated by Morningstar (as of September 30, 2013).
“Because returns in The Arbitrage Event-Driven Fund (AEDNX) are driven solely by corporate events and catalysts, historically, the fund has a very low correlation to the fixed-income and equity markets”
The Arbitrage Event-Driven Fund, approaching $100 million under management, seeks to achieve capital growth through event-driven investing, a highly specialized strategy designed to profit from the behavior of both equity and fixed-income securities trading within the timelines of specific corporate events, such as mergers, acquisitions, recapitalizations, restructuring, refinancing, and corporate distress. Over the three years since inception, the I share (AEDNX) ranked in the top 15% of the 78 Market Neutral funds classified by Morningstar.
"Because returns in The Arbitrage Event-Driven Fund (AEDNX) are driven solely by corporate events and catalysts, historically, the fund has a very low correlation to the fixed-income and equity markets," said John Orrico, CFA, and CIO of Water Island Capital, Advisor to The Arbitrage Event-Driven Fund. "Event-driven strategies have played an important role in diversifying institutional portfolios for decades. With The Arbitrage Funds, we’ve been focused for more than a decade on bringing these non-correlated, low volatility strategies to the mutual fund investor."
In addition to The Arbitrage Event-Driven Fund, the firm runs the 4-star overall Morningstar-rated Arbitrage Fund (ARBNX), an equity-focused merger arbitrage offering, and the previously mentioned Arbitrage Credit Opportunities Fund (ACFIX). The Arbitrage Credit Opportunities Fund pursues an alternative credit-based strategy that seeks to generate returns from specific catalysts or company-specific events that are not correlated to overall market direction or interest rates.
For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages). The Overall Morningstar Rating™ for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. The Arbitrage Event-Driven Fund was rated against the following numbers of U.S.-domiciled Market Neutral funds over the following time periods: 156 funds in the last three years. With respect to these Market Neutral funds, The Arbitrage Event-Driven Fund received a Morningstar Rating of four stars for the three year period. Past performance is no guarantee of future results. The Percent Rank in Category is the Funds total-return percentile rank relative to all funds within the same Morningstar Category and is subject to change each month.
Morningstar Rating is for the retail and institutional share classes only; other classes may have different performance characteristics.
© 2013 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
About Water Island Capital
Water Island Capital has been serving the institutional and individual investor communities since 2000, pursuing non-traditional and alternative event-driven investment strategies seeking low correlation, low volatility, capital growth, and capital preservation via separately managed accounts, hedge funds, and mutual funds. The firm is advisor to The Arbitrage Fund, Arbitrage Event-Driven Fund, and Arbitrage Credit Opportunities Fund and has some three billion under management.
About the Arbitrage Funds
The Arbitrage Funds are a series of diversified, open-ended mutual funds offering alternative investment strategies in a format providing transparency, liquidity, and low investment minimums. Visit https://www.arbitragefunds.com to learn more.
The Arbitrage Funds are distributed by ALPS Distributors, Inc., which is not affiliated with the advisor or any of its affiliates.
An investor should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The Fund’s prospectus contains this and other important information. You may obtain a copy of the Fund’s prospectus at http://arbitragefunds.com or by calling (800) 295-4485. Please read the prospectus carefully before investing.
Risks: The Fund uses investment techniques that are different from the risks ordinarily associated with equity investments. Such techniques and strategies include merger arbitrage risks, high portfolio turnover risks, options risks, borrowing risks, short sale risks, and foreign investment risks, which may increase volatility and may increase costs and lower performance. The Arbitrage Event-Driven Fund also invests in debt securities, which decrease in value as interest rates increase.
Distributed by ALPS Distributors Inc., which is not affiliated with the advisor or any of its affiliates. [ARB000391 2014-02-01]