Investing in Merger Arbitrage Funds

Markets and investing have become more complicated in 2014 compared to last year. The bull market in stocks is showing signs of age, while bond investors are trying to figure out whether Federal Reserve tapering will lead to higher interest rates. That means now is the time for investors to seek ways of reducing their portfolios' volatility, both in equities and fixed income. One way is Merger Arbitrage Funds, such as the Merger Fund (MERFX) and the Arbitrage Fund (ARBFX). Both of them practice what's known as merger arbitrage, betting that shares of the acquired company will rise while those of the acquirer fall. Investing in Merger Arbitrage Funds....continued...