AEFCX — Water Island Event-Driven Fund

AEFCX Fund Overview

AEFCX — Water Island Event-Driven Fund is a US mutual fund managed by Arbitrage Funds, categorised as United States Multi-Cap / All-Cap Blend / Core Thematic Equity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

• Type: US mutual fund
• Manager: Arbitrage Funds
• Category: United States Multi-Cap / All-Cap Blend / Core Thematic Equity
• Assets under management: $50.07M
• 1-year return: 18.3%
• Ticker: AEFCX
• SEC CIK: 0001105076
• SEC series ID: S000030113
• Share class ID: C000115402

AEFCX Investment Objective and Strategy

Water Island Event-Driven Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Arbitrage Funds.

Investment objective

The Fund seeks to achieve capital growth.

Principal investment strategy

"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 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 total return 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 and capital structure arbitrage 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.

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, but is not required to, seek to reduce currency risk by hedging part or all of its exposure to various foreign currencies."

AEFCX Holdings

Top 10 holdings of Water Island Event-Driven Fund by percentage of net assets, from the fund's latest SEC N-PORT filing.

View all AEFCX holdings

AEFCX Portfolio Allocation

Asset-class allocation of Water Island Event-Driven Fund by percentage of net assets, from the latest SEC N-PORT filing.

AEFCX Performance

Total returns for AEFCX (as of 2026-10-01), from SEC filings.

AEFCX Risk Information

Risk metrics for AEFCX, derived from monthly returns in SEC filings.

• 1-year volatility (annualised): 5.2%

AEFCX Costs and Fees

AEFCX costs about $259 per $10,000 invested per year in fund expenses.

• Net expense ratio: 2.59%
• Gross expense ratio: 2.81%
• Portfolio turnover: 255%
• Brokerage commissions: 28.54 bps of average net assets (SEC N-CEN)

AEFCX Cashflows

Over the 12 months to 2026-05, Water Island Event-Driven Fund had net outflows of $11.92M, from monthly SEC N-PORT filings.

AEFCX Debt Constituents

Largest debt holdings of Water Island Event-Driven Fund by percentage of net assets, from the latest SEC N-PORT filing.

AEFCX Prospectus and SEC Filings

Official Water Island Event-Driven Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

• Prospectus (485BPOS) — filed 2026-09-25
• Prospectus (485BPOS) — filed 2025-09-26
• Prospectus (485BPOS) — filed 2024-09-27
• Portfolio holdings (N-PORT) — filed 2026-07-07
• Portfolio holdings (N-PORT) — filed 2026-04-28
• Portfolio holdings (N-PORT) — filed 2026-01-05
• Annual census (N-CEN) — filed 2026-08-12
• Annual census (N-CEN) — filed 2025-08-14

Related Funds

Other United States Multi-Cap / All-Cap Blend / Core Thematic Equity funds tracked on ABC INVEST:

• REX Crypto Equity Premium Income ETF (CEPI)
• Fidelity Sustainable Multi-Asset Fund (FYMIX)
• Global X Dorsey Wright Thematic ETF (GXDW)
• Grayscale Bitcoin Adopters ETF (BCOR)
• Fidelity Sustainable Target Date Retirement Fund (FSUWX)

Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.