Water Island Credit Opportunities Fund Institutional Class (ACFIX)

Overview

This fund focuses on investing in a diverse portfolio of debt securities, including a wide range of instruments such as corporate bonds, debentures, and bank loans among others. It especially caters to investors looking for opportunities in high yield bonds, commonly referred to as "junk bonds", as well as convertible and preferred securities. The fund's investment strategy is not limited to the U.S. market; it extends to foreign debt securities, aiming to leverage global opportunities. The selection of investments is guided by the fund's investment adviser, who utilizes their expertise to identify debt instruments and derivatives with potential debt-like characteristics that can contribute to the fund's objectives.

Products and Services

The fund offers a comprehensive range of investment opportunities in debt securities and derivatives:

• Corporate Bonds and Debentures: These are fixed-income investments whereby investors lend money to an entity (corporate or government) that borrows the funds for a defined period at a fixed interest rate. They are favored for their potential to offer regular income and stability.
• High Yield Bonds (Junk Bonds): These bonds carry a higher risk of default than most bonds, but they offer higher yields, making them attractive for risk-tolerant investors seeking potentially higher returns.
• Bank Loans: Investments in loans typically made by banks or other financial institutions to companies. These are interesting for investors due to their secured nature and floating interest rates, which can provide a hedge against inflation.
• Convertible and Preferred Securities: Convertible securities are bonds or preferred stock that can be converted into a predetermined number of the company's common stock. Preferred securities represent ownership in a company but usually do not come with the same voting rights as common stock, though they offer fixed dividends.
• Credit Default Swaps: These are derivatives that allow an investor to swap or offset their credit risk with that of another investor.
• Interest Rate Swaps, Total Return Swaps, Futures, and Options: These derivatives involve agreements to exchange cash flows or returns derived from different financial instruments. They can serve as tools for managing risk or speculating on future movements in market rates or prices.