Episode 18: AltShares Merger Arbitrage ETF - Differentiated Returns in Difficult Markets
In this episode, Portfolio Managers John Orrico, Eric Becker, and Chris Plunkett discuss designing the AltShares Merger Arbitrage ETF’s passive, rules-based approach, today’s mergers and acquisitions landscape, and how the fund has been able to deliver differentiated returns.
[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 series of The Arbitrage Funds or AltShares Trust. 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. Visit the glossary for definitions of terms.
AltShares
Investors should carefully consider the fund’s investment objectives, risks, and expenses before investing. To obtain a prospectus containing this and other important information, visit http:// altsharesetfs.com or call (855) 955-1607. Read the prospectus carefully before investing.
The AltShares Merger Arbitrage ETF is a non-diversified, passively managed ETF which seeks to provide investment results that correspond, before fees and expenses, to the performance of the Water Island Merger Arbitrage USD Hedged Index. The Index is designed to reflect a pure-play, global merger arbitrage strategy investing in definitive, publicly announced mergers and acquisitions. The Index is created and sponsored by Water Island Indices, LLC, an affiliate of Water Island Capital, LLC. For additional information on the Index, please visit https://waterislandcapital.com/indices. Indexes are unmanaged and one cannot invest directly in an index.
RISKS: Investments are subject to risk, including possible loss of principal. There can be no assurance that the fund will achieve its investment objectives. The fund uses investment techniques and strategies with risks that are different from the risks ordinarily associated with equity investments. Such risks include merger arbitrage risk (in that the proposed reorganizations in which the fund invests may be renegotiated or terminated, in which case the fund may realize losses); passive investment risk; short position risk; concentration risk; high portfolio turnover risk (which may increase the fund’s brokerage costs, which would reduce performance); equity 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); market risk; derivatives risk; hedging risk; large shareholder transaction risk; counterparty risk; swap risk; ETF risks (which include premium-discount risk, secondary market trading risk, cash transactions risk, international closed market trading risk, flash crash risk, and authorized participants concentration risk); investment company and ETF risk; small and medium capitalization securities risk; currency risk; non-diversified fund risk; and tracking error risk. Risks may increase volatility and may increase costs and lower performance.
Distributed by Foreside Financial Services, LLC, which is not affiliated with Water Island Capital, LLC or any of its affiliates.
Arbitrage Funds
An investor should consider the investment objectives, risks, charges, and expenses of the funds carefully before investing. The current prospectus contains this and other information about the funds. To obtain a prospectus, please visit https://arbitragefunds.com/ or call (800) 295-4485. Please read the prospectus carefully before investing. Investing involves risk, including potential loss of principal.
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.
The Arbitrage Funds are distributed by ALPS Distributors Inc., which is not affiliated with Water Island Capital, LLC or any of its affiliates.