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Name

As of 03/25/2024

Price

Aum/Mkt Cap

YIELD

Annualized forward dividend yield. Multiplies the most recent dividend payout amount by its frequency and divides by the previous close price.

Exp Ratio

Expense ratio is the fund’s total annual operating expenses, including management fees, distribution fees, and other expenses, expressed as a percentage of average net assets.

Watchlist

$11.65

$112 M

0.72%

$0.08

1.46%

Vitals

YTD Return

0.0%

1 yr return

6.4%

3 Yr Avg Return

1.1%

5 Yr Avg Return

4.5%

Net Assets

$112 M

Holdings in Top 10

56.4%

52 WEEK LOW AND HIGH

$11.6
N/A
N/A

Expenses

OPERATING FEES

Expense Ratio 1.46%

SALES FEES

Front Load N/A

Deferred Load N/A

TRADING FEES

Turnover 320.00%

Redemption Fee N/A


Min Investment

Standard (Taxable)

$100,000

IRA

$100,000


Fund Classification

Fund Type

Open End Mutual Fund


Name

As of 03/25/2024

Price

Aum/Mkt Cap

YIELD

Annualized forward dividend yield. Multiplies the most recent dividend payout amount by its frequency and divides by the previous close price.

Exp Ratio

Expense ratio is the fund’s total annual operating expenses, including management fees, distribution fees, and other expenses, expressed as a percentage of average net assets.

Watchlist

$11.65

$112 M

0.72%

$0.08

1.46%

AEDNX - Profile

Distributions

  • YTD Total Return 0.0%
  • 3 Yr Annualized Total Return 1.1%
  • 5 Yr Annualized Total Return 4.5%
  • Capital Gain Distribution Frequency Annually
  • Net Income Ratio -0.24%
DIVIDENDS
  • Dividend Yield 0.7%
  • Dividend Distribution Frequency Annual

Fund Details

  • Legal Name
    WATER ISLAND EVENT-DRIVEN FUND
  • Fund Family Name
    Arbitrage Fund
  • Inception Date
    Oct 01, 2010
  • Shares Outstanding
    N/A
  • Share Class
    I
  • Currency
    USD
  • Domiciled Country
    US
  • Manager
    Todd Munn

Fund Description

The Fund invests in equity and debt and debt-like instruments (including high yield bonds commonly known as "junk bonds") of companies whose prices the Fund's investment adviser (the "Adviser") believes are or will be impacted by a corporate event. Specifically, the Fund employs investment strategies designed to capture price movements generated by corporate events such as mergers, acquisitions, asset sales, restructurings, refinancings, recapitalizations, reorganizations, or other special situations (referred to as "event-driven opportunities"). The Fund may invest in both U.S. and foreign securities and may invest in securities of companies of any market capitalization and in debt securities of any maturity. The Fund may also invest in derivatives, such as options and swaps. Furthermore, the Fund may invest in exchange traded funds ("ETFs"). The Adviser expects the Fund's assets to be invested in various industries; however, if, for example, a large percentage (namely, at least 50%) of corporate events taking place within the U.S. are within one industry over a given period of time, a large portion of the Fund's assets could be concentrated in that industry for that period of time.

The Fund may utilize investment strategies such as merger arbitrage, convertible arbitrage, capital structure arbitrage, and special situations in order to profit from event-driven opportunities. These investment strategies are described more fully below.

Merger Arbitrage: Merger arbitrage is a highly specialized investment approach designed to profit from the successful completion of mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations, and other corporate reorganizations. The most common merger arbitrage activity, and the approach the Fund generally uses, involves purchasing the shares of an announced acquisition target company at a discount to their expected value upon completion of the acquisition. The Fund may engage in selling securities short when the terms of a proposed acquisition call for the exchange of common stock and/or other securities. In such a case, the securities of the company to be acquired may be purchased and, at approximately the same time, an amount of the acquiring company's common stock and/or other securities as per the terms of the transaction may be sold short.

Convertible Arbitrage: Convertible arbitrage is a specialized strategy that seeks to profit from pricing inefficiencies between a firm's convertible securities and its underlying equity. The most common convertible arbitrage approach, and the strategy the Fund generally uses, matches a long position in the convertible security with a short position in the underlying common stock. The Fund seeks to purchase convertible securities at discounts to their expected future values and sell short shares of the underlying common stock in order to mitigate equity market movements. As stock prices rise and the convertible security becomes more equity sensitive, the Fund may sell short additional common shares in order to maintain the relationship between the convertible and the underlying common stock. As stock prices fall, the Fund will typically buy back a portion of shares which it had sold short. Positions are typically designed to earn income from coupon or dividend payments and net gains from the purchase and sale of the convertible securities' positions and the underlying common stocks.

Capital Structure Arbitrage: Capital structure arbitrage seeks to profit from relative pricing discrepancies between related debt and/or equity securities. For example, when the Fund believes that unsecured securities are overvalued in relation to senior secured securities, the Fund may purchase a senior secured security of an issuer and sell short an unsecured security of the same issuer. In this example the trade would be profitable if credit quality spreads widened or if the issuer went bankrupt and the recovery rate for the senior debt was higher than anticipated. Another example might involve the Fund purchasing one class of common stock while selling short a different class of common stock of the same issuer. It is expected that, over time, the relative mispricing of the securities may decline, at which point the position will be liquidated.

Special Situations: The special situations strategy seeks to profit by investing in securities of companies whose stock price trades significantly higher or lower from where the Adviser believes they should trade, as the result of an ongoing or anticipated corporate catalyst. Corporate catalysts may include spin-offs, split-offs, asset sales, speculative mergers and acquisitions, transformational mergers and acquisitions, Dutch tenders (whereby an offer is made to purchase securities within a given price range through an auction structure, wherein shareholders are invited to sell shares over a specific time period by specifying the lowest price within the range that they will accept), regulatory changes, recapitalizations, refinancings, corporate levering/de-levering, un-solicited hostile offers, litigation, bankruptcy processes, distressed credit, and other catalysts. The strategy invests primarily in equity securities, but may also invest in debt, warrants, debentures, convertible securities, and preferred securities. The strategy may engage in short sales and derivatives to implement trading strategies and to mitigate volatility and market risk.

The Fund generally engages in active and frequent trading of portfolio securities to achieve its principal investment objective. The Fund may sell or close out a security when the securities of the companies involved in the transaction no longer meet the Fund's expected return criteria when gauged by prevailing market prices and the relative risks of the situation. The Fund may hold a significant portion of its assets in cash, money market or similar cash management funds, or short-term investments for defensive purposes, to preserve the Fund's ability to capitalize quickly on new market opportunities, or for other reasons, such as because the Adviser has determined to obtain investment exposure through derivative instruments instead of direct cash investments. The Fund may also hold a significant amount of cash or short-term investments immediately after a period in which several transactions in which the Fund has invested close in a similar timeframe, yet before capital is redeployed to other opportunities. The Fund may, but is not required to, seek to reduce currency risk by hedging part or all of its exposure to various foreign currencies.

The Fund is non-diversified, which means that it may invest a greater portion of its assets in one or a limited number of issuers and may invest overall in a smaller number of issuers than a diversified fund.

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AEDNX - Performance

Return Ranking - Trailing

Period AEDNX Return Category Return Low Category Return High Rank in Category (%)
YTD 0.0% -11.6% 15.8% 39.00%
1 Yr 6.4% -33.0% 41.7% 11.65%
3 Yr 1.1%* -10.5% 13.4% 11.22%
5 Yr 4.5%* -4.8% 11.1% 10.84%
10 Yr 2.2%* -4.6% 7.6% 44.12%

* Annualized

Return Ranking - Calendar

Period AEDNX Return Category Return Low Category Return High Rank in Category (%)
2023 5.1% -31.7% 23.2% 5.10%
2022 -0.6% -20.7% 10.7% 16.49%
2021 1.2% -12.4% 14.7% 54.44%
2020 13.1% -13.2% 12.9% 21.52%
2019 4.3% -11.7% 7.9% 8.57%

Total Return Ranking - Trailing

Period AEDNX Return Category Return Low Category Return High Rank in Category (%)
YTD 0.0% -11.7% 15.8% 39.00%
1 Yr 6.4% -33.0% 41.7% 11.65%
3 Yr 1.1%* -10.5% 13.4% 10.20%
5 Yr 4.5%* -4.8% 11.1% 10.84%
10 Yr 2.2%* -4.6% 7.6% 44.12%

* Annualized

Total Return Ranking - Calendar

Period AEDNX Return Category Return Low Category Return High Rank in Category (%)
2023 5.9% -31.7% 23.2% 5.10%
2022 -0.6% -20.7% 10.7% 16.49%
2021 1.2% -12.4% 14.7% 71.11%
2020 13.4% -12.7% 12.9% 41.77%
2019 4.8% -11.5% 13.2% 12.86%

NAV & Total Return History


AEDNX - Holdings

Concentration Analysis

AEDNX Category Low Category High AEDNX % Rank
Net Assets 112 M 105 K 12.6 B 49.04%
Number of Holdings 149 5 2526 61.54%
Net Assets in Top 10 62.9 M -619 M 6.53 B 45.19%
Weighting of Top 10 56.42% 7.6% 96.1% 47.56%

Top 10 Holdings

  1. Morgan Stanley Institutional Liquidity Funds - Government Portfolio 12.25%
  2. State Street Institutional US Government Money Market Fund 12.25%
  3. Seagen Inc 5.43%
  4. Splunk Inc 4.92%
  5. Sovos Brands Inc 4.91%
  6. Pioneer Natural Resources Co 4.17%
  7. Morgan Stanley Institutional Liquidity Funds - Government Portfolio 3.22%
  8. State Street Institutional U.S. Government Money Market Fund 3.22%
  9. PNM Resources Inc 3.07%
  10. Amedisys Inc 2.99%

Asset Allocation

Weighting Return Low Return High AEDNX % Rank
Stocks
65.11% -57.09% 325.56% 17.31%
Cash
30.93% -225.56% 102.75% 75.00%
Bonds
3.09% -1.04% 63.30% 38.46%
Convertible Bonds
2.75% 0.00% 95.47% 32.69%
Other
0.07% -11.90% 43.69% 76.92%
Preferred Stocks
0.00% 0.00% 5.67% 87.50%

Stock Sector Breakdown

Weighting Return Low Return High AEDNX % Rank
Technology
32.28% 0.00% 100.00% 12.90%
Healthcare
13.34% 0.00% 27.28% 17.20%
Financial Services
12.66% 0.00% 98.37% 41.94%
Industrials
10.97% 0.00% 27.58% 52.69%
Real Estate
7.27% 0.00% 93.91% 56.99%
Communication Services
7.20% 0.00% 33.72% 15.05%
Consumer Defense
3.94% 0.00% 30.58% 63.44%
Consumer Cyclical
3.60% 0.00% 29.06% 78.49%
Utilities
3.49% 0.00% 66.28% 61.29%
Basic Materials
2.99% 0.00% 42.74% 61.29%
Energy
2.25% 0.00% 53.30% 56.99%

Stock Geographic Breakdown

Weighting Return Low Return High AEDNX % Rank
US
59.17% -55.82% 325.56% 16.35%
Non US
5.95% -7.09% 86.98% 15.38%

Bond Sector Breakdown

Weighting Return Low Return High AEDNX % Rank
Corporate
57.17% 0.00% 100.00% 27.88%
Cash & Equivalents
30.93% 0.00% 100.00% 52.88%
Derivative
0.07% 0.00% 30.95% 84.62%
Securitized
0.00% 0.00% 27.70% 82.69%
Municipal
0.00% 0.00% 3.82% 82.69%
Government
0.00% 0.00% 73.33% 86.54%

Bond Geographic Breakdown

Weighting Return Low Return High AEDNX % Rank
US
2.84% -1.04% 80.93% 38.46%
Non US
0.25% -64.71% 9.68% 6.73%

AEDNX - Expenses

Operational Fees

AEDNX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Expense Ratio 1.46% 0.73% 9.52% 66.02%
Management Fee 1.10% 0.13% 1.65% 51.92%
12b-1 Fee N/A 0.00% 1.00% N/A
Administrative Fee N/A 0.06% 0.40% 24.14%

Sales Fees

AEDNX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Front Load N/A 2.75% 5.75% 96.77%
Deferred Load N/A 1.00% 5.00% N/A

Trading Fees

AEDNX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Max Redemption Fee N/A 1.00% 2.00% 42.50%

Related Fees

Turnover provides investors a proxy for the trading fees incurred by mutual fund managers who frequently adjust position allocations. Higher turnover means higher trading fees.

AEDNX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Turnover 320.00% 30.00% 483.00% 96.63%

AEDNX - Distributions

Dividend Yield Analysis

AEDNX Category Low Category High AEDNX % Rank
Dividend Yield 0.72% 0.00% 0.75% 79.81%

Dividend Distribution Analysis

AEDNX Category Low Category High Category Mod
Dividend Distribution Frequency Annual Annually Quarterly Annually

Net Income Ratio Analysis

AEDNX Category Low Category High AEDNX % Rank
Net Income Ratio -0.24% -2.49% 4.20% 37.86%

Capital Gain Distribution Analysis

AEDNX Category Low Category High Capital Mode
Capital Gain Distribution Frequency Annually Annually Annually Annually

Distributions History

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AEDNX - Fund Manager Analysis

Managers

Todd Munn


Start Date

Tenure

Tenure Rank

Oct 01, 2010

11.67

11.7%

Munn is a portfolio manager of Water Island Capital, LLC. Prior to becoming a portfolio manager of the Fund, Mr. Munn was a senior equity analyst for the Fund. Mr. Munn received a Master of Business Administration degree from Fordham Graduate School of Business in 2003 and a Bachelors degree from Gettysburg College in 1993 — with a double major in Finance and Accounting.

Gregory Loprete


Start Date

Tenure

Tenure Rank

Oct 01, 2010

11.67

11.7%

Gregory(Gregg) Loprete joined Water Island Capital in 2009 and currently serves as a portfolio manager. He is primarily responsible for management of the firm’s convertible and fixed income investments. Prior to joining Water Island Capital, Mr. Loprete worked at Keefe, Bruyette & Woods as a Convertible and Preferred Trader where he evaluated, implemented and managed convertible and capital structure investments. From 2007-2008, Mr. Loprete was a Director in the Convertible Arbitrage Group at Ramius Capital Group, LLC. At Ramius Mr. Loprete also served as co-manager and trader. From 2003 to 2007, Mr. Loprete was a Senior Convertible Analyst and Convertible Banking Liaison at SG Cowen & Company. Mr. Loprete received a Masters of Business Administration degree in Finance from New York University in 1993 and a Bachelors degree from the University of Delaware in 1987 — with a major in English Literature with a minor in Economics.

Roger Foltynowicz


Start Date

Tenure

Tenure Rank

Oct 01, 2010

11.67

11.7%

Roger Foltynowicz, CAIA, received a Master of Science degree from Pace University in 2006 – with a major in Investment Management – and a Bachelor's degree from Presbyterian College in 1999 – with a major in Business Administration.

John Orrico


Start Date

Tenure

Tenure Rank

Mar 31, 2018

4.17

4.2%

Mr. Orrico founded Water Island Capital, the advisor to The Arbitrage Funds, in 2000. He currently serves as Chairman of The Arbitrage Funds series trust and Chief Investment Officer of the firm. Prior to founding Water Island Capital, Mr. Orrico directed arbitrage, special situations, and distressed hedge fund portfolios at Lindemann Capital, which he joined in 1999, in conjunction with starting the organizational process for the Arbitrage Fund. Prior to joining Lindemann Capital, Mr. Orrico joined Gruss & Co in 1994, focusing on merger arbitrage and special situations, and became Senior Arbitrage Analyst in 1996. Mr. Orrico has worked in the securities industry since joining Morgan Stanley in 1982, beginning in corporate finance, with additional experience in institutional equity trading, equity research analysis and portfolio management. Mr. Orrico received a BA from Georgetown University.

Tenure Analysis

Category Low Category High Category Average Category Mode
0.08 30.59 6.3 9.42