AQR Diversified Arbitrage: A Multifaceted Approach to Arbitrage Investing
Arbitrage strategies seek to profit from corporate capital raising events such as equity and debt new issues, and corporate control events such as mergers and bankruptcies. Because these strategies are typically tied to fiscal events of specific companies, they can provide a source of returns that is independent from equity and bond investments.
Diversified Arbitrage employs three types of arbitrage strategies: Merger Arbitrage, 1 1 Close Merger arbitrage consists of buying shares of the target company in a proposed merger and hedging the exposure to the acquirer by shorting the stock of the acquiring company. Convertible Arbitrage, 2 2 Close Convertible arbitrage consists of buying convertible securities and attempting to mitigate the risks associated with the investment by shorting the stock of the issuer. and Event-driven Investments. 3 3 Close Event-driven investments involve various corporate actions where very similar assets begin to trade at different prices (e.g., the different share classes of a public company's stock). Each strategy is an alternative investment to a traditional portfolio, and the combination of strategies provides the opportunity to benefit from different types of corporate events.
Arbitrage opportunities can be created by financial events across the corporate lifecycle.
Benefits to Investors Include:
Seeks Attractive Risk-Adjusted Returns
Potential to Perform in Up and Down Markets
An investment in any of the AQR Funds involves risk, including loss of principal. The Fund seeks long-term absolute (positive) returns. The Fund has the risk that the anticipated arbitrage opportunities do not play out as planned, resulting in potentially reduced returns or losses to the Fund as it unwinds its trades. This fund enters into a short sale by selling a security it has borrowed. If the market price of a security increases after the Fund borrows the security, the Fund will suffer a potentially unlimited loss when it replaces the borrowed security at the higher price. Short sales also involve transaction and other costs that will reduce potential Fund gains and increase potential Fund losses. The Fund uses derivatives to hedge certain economic exposures. The use of derivatives exposes the Fund to additional risks including increased volatility, lack of liquidity, and possible losses greater than the Fund's initial investment as well as increased transaction.
Diversification does not eliminate risk.
© AQR Funds are distributed by ALPS Distributors, Inc. AQR Capital Management, LLC is the Investment Manager of the Funds and a federally registered investment adviser. ALPS Distributors is not affiliated with AQR Capital Management.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. To obtain a prospectus containing this and other important information, please call 1-866-290-2688 or click here to view or download a prospectus online. Read the prospectus carefully before you invest.
The information provided herein (including any separate documents that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information about our products and services and to otherwise provide general investment education. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of AQR Capital Management, LLC (“AQR Capital”) nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement investor, contact your financial advisor or other fiduciary unrelated to AQR about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances.
There are risks involved with investing including the possible loss of principal.
Past performance does not guarantee future results.
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