Putting Arbitrage on Autopilot

By Lee Bellinger / March 3, 2014

Putting Arbitrage on Autopilot

Investors who are keen on arbitraging their way to profits should be aware of a specialty mutual fund that is dedicated to employing a merger arbitrage strategy. Appropriately, it’s known as the Arbitrage Fund (ARBFX).

According to Arbitrage’s Summary Prospectus, “the Fund will invest at least 80% of its net assets in equity securities of companies (both U.S. and foreign) that are involved in publicly announced
mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations and other corporate reorganizations.

The $2.6 billion fund has delivered steady – though unspectacular – returns since its inception in 2002. It shouldn’t be viewed as a core holding, necessarily. However, a small allocation to the Arbitrage Fund could be suitable for conservative investors who seek exposure to alternative strategies for greater portfolio diversification.

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