The Merger Fund - Class A (MERFX)

Invest in market-neutral funds like EMAAX, MERFX and ARGAX to hedge your portfolio amid market volatility.

Due in part to factors such as persistently high inflation, rising interest rates, the war in Ukraine, and ongoing U.S./China geopolitical tensions, among other issues, overall mergers and acquisitions activity in 2022 is somewhat lethargic relative to previous years.

Simultaneous erosion in both bonds and equities this year is prompting some investors to evaluate alternative strategies. However, market participants that are new to the world of alternatives may think this segment complex and confusing.

This year, there's been considerable talk about the death of the 60/40 portfolio structure. More recently, the chatter shifted to the notion that those 60/40 obituaries may have been penned prematurely, but the stark reality is that broad-based equity and fixed income strategies are failing investors this year.

Event-driven strategies that focus on corporate actions — usually merger arbitrage — could be increasingly appealing to investors looking for alternative asset classes and rising rates protection. The Merger Fund (MERFX) is one of the potential standouts in the field of merger arbitrage funds.

The 2-year/ 10-year US Treasury yield curve inverted last week, an indicator suggesting that markets expect the US economy to worsen.  While the 3-month/10-year US Treasury yield curve still appears healthy, it is worth keeping a close eye on, as some economists, such as Fed Chairman Jerome Powell, look to the shortest end of the [.

Commodities continued to rise last month as investors look for ways to hedge against inflation and rising rates, however, investors may be missing out on an especially well-positioned strategy: merger arbitrage.  Merger arbitrage is an alternative investment strategy offering investors the potential to create a more efficient and diversified portfolio, targeting both steady gains and [.

Investing in merger arbitrage has many potential advantages, including low correlation and low beta to the stock or bond markets, as well as low volatility compared to equity markets, as reflected by standard deviation.  As interest rates have begun to increase to combat inflation, with most of the Fed officials projecting pushing it up to [.

The yield curve inverting has dominated headlines recently for good reason; it's the only economic indicator that has a perfect track record of predicting a recession. A steepening yield curve, generally speaking, means that investors have solid expectations for economic activity.

Investors looking for ways to hedge against record levels of inflation, which are predicted to surge higher due to the implications of the Russian-Ukraine war, should consider boosting their exposure to alternatives. The Bureau of Labor Statistics' Consumer Price Index (CPI) increased by 7.9% in February compared to one year prior, marking the fastest annual jump [.

As investors continue to flock toward commodities and other well-known inflation hedges, investors may be missing out on an especially well-positioned strategy: merger arbitrage.  Merger arbitrage is an alternative investment strategy offering investors the potential to create a more efficient and diversified portfolio, targeting both steady gains and minimization of drawdowns through up and down [.

Investing in merger arbitrage has many potential advantages, including low correlation and low beta to those of the stock or bond markets, as well as considerably less volatility than equity markets, as reflected by standard deviation.  Especially relative to the current environment, merger arbitrage has tended to be positively correlated with interest rates, or the [.

Investors looking to hedge against inflation should consider adding a merger arbitrage strategy to their portfolios.  The most recent gauge on inflation showed that the consumer price index for all items rose 0.6% in January, driving up annual inflation by 7.5%.