Episode 14: A Conversation About Alternatives, featuring The Bahnsen Group and Sarian Strategic Partners

In this special episode, Portfolio Manager Gregg Loprete is joined by Steve Tresnan of The Bahnsen Group and Jeremiah Riethmiller of Sarian Strategic Partners. They discuss the general qualities of alternative investment strategies, how they can potentially benefit investors in today’s markets, and how alternatives, specifically event-driven strategies, may be used as part of a diversified portfolio.
[Transcript]

The discussion of market trends and companies throughout this podcast are not intended as advice to any person regarding the advisability of investing in any particular security or strategy. Any securities mentioned are selected for discussion purposes only and may not represent current holdings of Water Island Capital, LLC ("Water Island") or The Arbitrage Funds. Our views, opinions, and estimates – including any forward-looking statements – are a reflection of our best judgment at the time of recording and are subject to change based on market and other conditions. Water Island is under no obligation to update or revise any such views or statements, except as required by law. Past performance is no guarantee of future results. Additional information about Water Island can be obtained from our Form ADV, which is available at adviserinfo.sec.gov. View top ten holdings. Visit the glossary for definitions of terms.

View the Water Island Credit Opportunities Fund’s standardized returns. View the Arbitrage Fund’s standardized returns. The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling (800) 295-4485. Returns shown above include the reinvestment of all dividends and capital gains. Total Annual Fund Operating Expenses for ACFIX, ARCFX, and AGCAX are 1.72%, 1.97%, and 1.97%, respectively. The Water Island Credit Opportunities Fund has entered into an Expense Waiver and Reimbursement Agreement with the Fund’s investment adviser pursuant to which the adviser has contractually agreed to limit the total annual operating expenses of the Fund, not including taxes, interest, dividends on short positions, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase or sale of portfolio securities, so that they do not exceed 0.98% of the Fund’s average daily net assets allocable to the Class I shares, 1.23% of the Fund’s average daily net assets allocable to the Class R shares, and 1.23% of the Fund’s average daily net assets allocable to the Class A shares. The agreement remains in effect until September 30, 2021, unless terminated by the Board of Trustees. Class A shares have a maximum front-end sales charge of 3.25%. A deferred sales charge of up to 1.00% may be imposed on purchases of $250,000 or more of Class A shares purchased without a front-end sales charge that are redeemed within 18 months of purchase. Total Annual Fund Operating Expenses for ARBNX, ARBFX, and ARGAX are 1.46%, 1.71%, and 1.71%, respectively. Class A shares have a maximum front-end sales charge of 2.75%. A deferred sales charge of up to 1.00% may be imposed on purchases of $250,000 or more of Class A shares purchased without a front-end sales charge that are redeemed within 18 months of purchase.

FUND RISKS: The Funds use investment techniques and strategies with risks that are different from the risks ordinarily associated with equity and credit investments. Such risks include merger arbitrage risk (in that the proposed reorganizations in which the Funds invest may be renegotiated or terminated, in which case the Funds may realize losses); short sale risk (in that the Funds will suffer a loss if it sells a security short and the value of the security rises rather than falls); event-driven risk; special situations risk; market risk; sector risk; hedging transaction risk; derivatives risk; LIBOR rate risk; credit risk; convertible security risk; concentration risk; special purpose acquisition companies risk; non-diversification risk; active management risk; counterparty risk; high portfolio turnover risk (which may increase the Funds’ brokerage costs, which would reduce performance); interest rate risk; liquidity risk; options risk; swap risk; small and medium capitalization securities risk; investment company and ETF risk; when-issued securities risk; large shareholder transaction risk; foreign securities risk (in that the securities of foreign issuers may be less liquid and more volatile than securities of comparable US issuers, and may be subject to political uncertainty and currency fluctuations); leverage risk; currency risk; and temporary investment/cash management risk. Risks may increase volatility and may increase costs and lower performance.

Water Island Credit Opportunities Fund top ten holdings as of March 31, 2021: Capitol Investment Merger Sub 2 LLC 10% 8/1/2024; Golden Nugget Inc 6.75% 10/15/2024; Hillman Group Inc/The 6.375% 7/15/2022; Ingram Micro Inc 5.45% 12/15/2024; Laureate Education Inc 8.25% 5/1/2025; Michaels Stores Inc 4.75% 10/1/2027; Michaels Stores Inc 8% 7/15/2027; Pluralsight Inc 0.375% 3/1/2024; Stars Group Holdings BV 7% 7/15/2026; T-Mobile USA Inc 6% 3/1/2023. Top ten holdings represent 31.9% of the portfolio. Holdings are subject to change. Current and future holdings are subject to risk.

Arbitrage Fund top ten holdings as of March 31, 2021: Alexion Pharmaceuticals Inc; Cardtronics PLC; Coherent Inc; IHS Markit Ltd; Maxim Integrated Products Inc; Pluralsight Inc; RealPage Inc; Slack Technologies Inc; Water Island Event Driven Fund; Willis Towers Watson PLC. Top ten holdings represent 35.5% of the portfolio. Holdings are subject to change. Current and future holdings are subject to risk.