ARCCX — Water Island Credit Opportunities Fund
Data updated: 2026-09-25
ARCCX — Water Island Credit Opportunities Fund. Short Corporate Bond · $168.86M AUM · 2.11% expense ratio. Holdings, fees, performance and SEC filings.
ARCCX Fund Overview
ARCCX — Water Island Credit Opportunities Fund is a US mutual fund managed by Arbitrage Funds, categorised as Short Corporate Bond. 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: Short Corporate Bond
- Assets under management: $168.86M
- 1-year return: 13.0%
- Ticker: ARCCX
- SEC CIK: 0001105076
- SEC series ID: S000039281
- Share class ID: C000120979
ARCCX Investment Objective and Strategy
Water Island Credit Opportunities 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 provide current income and capital growth.
Principal investment strategy
"The Fund invests primarily in a portfolio of debt securities including corporate bonds and debentures (including high yield bonds commonly known as ""junk bonds""), bank loans, convertible and preferred securities, credit default swaps and other debt instruments and derivatives that the Fund's investment adviser believes have debt-like characteristics. The Fund invests in both domestic and foreign debt securities. The principal types of derivatives in which the Fund may invest are credit default swaps, interest rate swaps, total return swaps, futures and options. The Fund invests primarily in debt securities whose returns the adviser believes will be more correlated with the outcome of specific catalysts or events rather than overall market direction. These catalysts and events include mergers, acquisitions, debt maturities, refinancings, regulatory changes, recapitalizations, reorganizations, restructurings and other special situations.
The Fund also uses a relative value approach and may express positive views on specific issuers by taking long positions in cash bonds and/or derivatives and negative views on specific issuers by taking short positions in cash bonds and/or derivatives. The Fund uses fundamental research to identify mispricings or inefficiencies in these situations and assesses their potential impact on security prices. The Fund may engage in short-term trading strategies, and may engage in short sales and invest in derivatives. The principal short-term trading strategies may at times include convertible arbitrage, merger arbitrage, and capital structure arbitrage, which are discussed below. The Fund may seek to mitigate the risk of volatility (the appreciation or depreciation of the value of a security over a period of time) and duration (the impact of interest rate changes on fixed-income securities) by engaging in short sales and/or investing in derivatives, including credit default swaps, interest rate swaps, futures and options.
The Fund may purchase or sell short equity securities or derivatives as part of a hedging strategy or hold equity positions or other assets that the Fund receives as part of a reorganization process. 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. Furthermore, the Fund may invest in exchange traded funds (""ETFs""). The Fund is not limited with respect to its portfolio maturity or duration. The Fund may invest in debt securities without regard to their credit ratings, including securities that are unrated, and in debt securities with a wide variety of terms that may vary from security to security, including but not limited to optional and mandatory prepayment provisions, fixed, variable, semi-variable, and resettable interest rates and conversion options, as well as various combinations of these terms.
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 debt securities 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.
It is expected that, over time, the relative mispricing of the securities may decline, at which point the position will be liquidated."
ARCCX Holdings
Top 10 holdings of Water Island Credit Opportunities Fund by percentage of net assets, from the fund's latest SEC N-PORT filing.
| Holding | % of net assets |
|---|---|
| State Street Global Advisors | 11.83% |
| Morgan Stanley & Co. LLC | 11.83% |
| Morgan Stanley Prime Broker US | 8.16% |
| Txnm Energy, Inc. | 4.80% |
| Chart Industries, Inc. | 3.77% |
| Dish Dbs Corp. | 3.68% |
| Ncr Atleos LLC | 3.47% |
| Carvana Co. | 3.27% |
| Olaplex Inc | 3.15% |
| Echostar Corp. | 3.08% |
ARCCX Portfolio Allocation
Asset-class allocation of Water Island Credit Opportunities Fund by percentage of net assets, from the latest SEC N-PORT filing.
| Asset class | Allocation |
|---|---|
| Fixed Income | 72.0% |
| Cash & Equivalents | 23.7% |
| Other | 8.8% |
| Loans | 5.9% |
ARCCX Performance
Total returns for ARCCX (as of 2026-10-01), from SEC filings.
| Period | Total return |
|---|---|
| 1 year | 13.0% |
ARCCX Risk Information
Risk metrics for ARCCX, derived from monthly returns in SEC filings.
- 1-year volatility (annualised): 3.7%
ARCCX Costs and Fees
ARCCX costs about $211 per $10,000 invested per year in fund expenses.
- Net expense ratio: 2.11%
- Gross expense ratio: 2.72%
- Portfolio turnover: 141%
- Brokerage commissions: 1.24 bps of average net assets (SEC N-CEN)
ARCCX Cashflows
Over the 12 months to 2026-05, Water Island Credit Opportunities Fund had net inflows of $1.94M, from monthly SEC N-PORT filings.
| Month | Net flow |
|---|---|
| 2026-05 | $4.42M |
| 2026-04 | $10.98M |
| 2026-03 | −$414.00K |
| 2026-02 | −$4.61M |
| 2026-01 | −$1.18M |
| 2025-12 | −$213.74K |
ARCCX Debt Constituents
Largest debt holdings of Water Island Credit Opportunities Fund by percentage of net assets, from the latest SEC N-PORT filing.
| Debt holding | % of net assets |
|---|---|
| Txnm Energy, Inc. | 4.80% |
| Chart Industries, Inc. | 3.77% |
| Dish Dbs Corp. | 3.68% |
| Ncr Atleos LLC | 3.47% |
| Carvana Co. | 3.27% |
| Echostar Corp. | 3.08% |
| Live Nation Entertainmen | 2.96% |
| Kennedy-Wilson, Inc. | 2.96% |
| Nutanix, Inc. | 2.93% |
| Bentley Systems | 2.83% |
ARCCX Prospectus and SEC Filings
Official Water Island Credit Opportunities 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 Short Corporate Bond funds tracked on ABC INVEST:
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.