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Upturn AI Summary
The Arbitrage Funds(ARB)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for ARB
09/28/2026: ARB (1-star) has a low Upturn Star Rating. Not recommended to BUY.
The Arbitrage Funds (ARB) is an active ETF that provides exposure to merger arbitrage by investing in companies currently involved in pending M&A transactions. Its main strength lies in its ability to generate low-beta returns that are generally uncorrelated with the broader stock market, offering a diversification tool for investors. However, it carries significant deal-specific risk and has a relatively high expense ratio compared to passive indices. It is best suited for long-term investors seeking to balance portfolio volatility through alternative strategies. Investors should monitor M&A market volume and regulatory antitrust trends, which are the primary catalysts affecting the fund's success.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
ETF holdings, costs, diversification, valuation, risks, and market conditions provide supporting context about the fund.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Mixed fit | The fund seeks steady absolute returns rather than the aggressive capital appreciation typically targeted by growth investors. |
| Momentum investor | Weak fit | Momentum strategies do not align with the fund's approach of capturing price spreads in static merger agreements. |
| Value investor | Mixed fit | While the fund looks at deal pricing, it is an event-driven strategy rather than a traditional valuation-based value strategy. |
| Dividend/Income investor | Weak fit | The fund does not focus on dividend income, as its primary goal is capital appreciation via deal completion. |
| Low-risk investor | Strong fit while signal remains positive | The fund is often used by conservative investors seeking an alternative to fixed income with low correlation to stock market swings. |
Investor Profile
Ideal Investor Profile
Sophisticated, long-term investors looking for diversification and low correlation to traditional stock and bond markets.
Suitability
Best suited for inclusion in a well-diversified portfolio as an alternative asset component, rather than as a primary equity holding.
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Volatility | Medium | Merger deals carry specific 'deal break' risk that can lead to sudden price drops if a transaction is canceled. |
| Market risk | Low | The strategy is designed to be largely market-neutral, reducing sensitivity to broad market downturns. |
| Concentration | Medium / high | The portfolio is concentrated in a limited number of active merger deals. |
| Tracking/expense | High | The high management fee reflects the active management required for complex arbitrage. |
| Liquidity | Medium | Individual merger stocks can sometimes experience lower liquidity, especially if the deal becomes controversial. |
| Business/sector quality | Medium | Success depends on the legal and economic viability of the companies involved in the merger. |
Risk Analysis
Volatility
ARB typically displays lower historical volatility than the S&P 500, behaving more like a fixed-income alternative in terms of return profile.
Market Risk
The primary risk is 'deal risk'—the probability that announced mergers fail, leading to significant price corrections in the holding's stock price.
What the ETF Owns
| Exposure Type | Exposure | Weight (%) | Retail Investor Read |
|---|---|---|---|
| Single stock | Equity securities of companies involved in announced M&A transactions | 85 | These stocks represent the primary source of return as the fund seeks to capture the acquisition price spread. |
| Cash/collateral | Cash and high-quality money market instruments | 15 | Cash provides liquidity for new deal entries and acts as a buffer during market volatility. |
Price Behavior
Flat / Range-Bound
The stock price has been trading within a narrow range with minimal directional movement.
Very Smooth
The stock has followed a highly orderly price path with minimal short-term disruption.
Analysis of Past Performance
Type ETF | Historic Profit 11.04% | Avg. Invested days 101 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Advisory Rating  | Upturn Advisory Performance  5.0 | ETF Returns Performance  3.0 |
| Profits based on simulation | Last Close 09/28/2026 |
ETF Fundamentals 
Source: EOD Historical Data • Updated Sep 28, 2026
Fund Basics
| Metric | Value |
|---|---|
| Fund Size (AUM) | $103.05M |
| Issuer | AltShares |
| Expense Ratio | 0.77% |
| Distribution Yield | 0.42% |
| Inception | May 7, 2020 |
Performance
| Period | Total Return |
|---|---|
| YTD | +3.06% |
| 1 Year | +3.73% |
| 3 Year | +5.10% |
| 5 Year | +4.18% |
| 10 Year | +0.00% |
Risk Metrics
| Metric | Value |
|---|---|
| 1Y Volatility | 0.83% |
| 3Y Volatility | 1.91% |
| 3Y Sharpe Ratio | 0.23 |
Ratings
| Metric | Value |
|---|---|
| Morningstar Rating | ★★★★★ |
Market Cap Distribution
| Cap Size | Weight |
|---|---|
| Small Cap | 45.29% |
| Micro Cap | 27.73% |
| Mid Cap | 19.81% |
Top Sectors
| Sector | Weight |
|---|---|
| Financial Services | 21.34% |
| Healthcare | 18.83% |
| Industrials | 15.29% |
| Technology | 12.16% |
Asset Allocation
Portfolio Characteristics
| Metric | Value |
|---|---|
| Portfolio P/E | 14.06x |
| Portfolio P/B | 2.24x |
| Portfolio P/S | 1.66x |
| Holdings Turnover | 4.49% |
Top Holdings
| Holding | Weight |
|---|---|
| Warner Bros Discovery | 3.60% |
| Electronic Arts | 2.81% |
| Clearwater Analytics Holdings | 2.80% |
| The AES | 2.79% |
| Masimo | 2.79% |
Upturn AI Summary
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
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