The Arbitrage Fund will reopen.

TheShadow

http://www.sec.gov/Archives/edgar/data/1105076/000089706912000210/cg103.htm

The Arbitrage Fund Re-Opening to All Investors

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The Arbitrage Fund has been closed to new investors since July 19, 2010. The Board of Trustees of the Fund recently voted to re-open the Fund to all investors. The Fund will re-open to all investors effective as of March 15, 2012. As of March 15, 2012, all references to the Fund being closed to new investors are hereby deleted from the Prospectus. Specifically, the Section “How to Purchase Shares – Eligible Purchases” on page 24 of the Prospectus is deleted in its entirety.

The date of this Supplement is March 8, 2012.

Please retain this Supplement for future reference.

David_Snowball

You're so good at tracking this stuff down, it's scary.

Thanks for all you do. David

Accipiter

Shadow's "nom de plume" aptly fits.

TheShadow

Thanks to everyone for their efforts and contributions!

00BY

AUM at last report is 2.5B (which I think was 11/30/2011). Does anyone know what they were at when they decided to close?

scott

The multi-strategy Arbitrage Event-Driven fund from the same management team is still open - not saying better/worse, simply noting an alternative.

Ted

Dear Shadow: I'd like to echo David's remarks.
Regards,
Ted

bee

ARBFX pays out sizable dividends. Charting this fund with the wrong chart tool such as a price chart (Yahoofinance) could give the wrong impression of how well this fund has performed over a long time frame (say five years). Mornigstar uses an investment performance chart which tracks how a $10K investment would have performed over that same 5 year time frame.

Yahoofinance charts mutual funds according to the fund's daily price. Periodically, the NAV of a mutual fund is negatively impacted by dividend payouts. But, in most cases, investors typically reinvest dividends so Yahoo's charting method is not a true indication of investment performance for investors who reinvest there dividends.

Here are the two websites charts for a Five year time frame. Remember, Yahoofinance is a price chart, not a performance chart.

As you can see, the same fund charted over the same time period can look very different due to the method used by the site you choose. Morningstar is the better tool for charting a mutual fund's performance.

msf

There are several size-related reasons why a fund might close. One is its size relative to its market (can't find investments). Another is its absolute size due to 1940 Act limitations on how much of a company it can own (e.g. a diversified fund generally cannot hold more than 5% of a company); this can severely limit the ability of small cap funds to hold a reasonable number of positions (see, e.g. FLPSX). Yet another is the fund's rate of growth - it may be growing faster than its ability to add staffing that is well integrated into its style of investing.

The May 31, 2010 annual report (about 1.5 months before closing) gave the following figures for AUM (note the growth rate as well as the size of assets)
5/31/10: $1.342B ($759M R shares, $582M I shares)
5/31/09: $0.328B ($219M R shares, $109M I shares)
5/31/08: $0.194B ($112M R, $82M I)
5/31/07: $0.167B ($75M R, $92M I)
5/31/06: $0.176B ($88M R, $88M I)