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Equity Arbitrage
Categories: Finance,
A form of arbitrage which involves the simultaneous purchase of shares in one company and the short sale of assets in another. This strategy is typically used in expectation of a pending announcement of a take-over by a company. By purchasing shares in the company that is expected to be taken over (with the anticipation that market value will increase) and selling short shares in the acquiring company (with the anticipation that market value will decrease), an investor hopes to gain from both sides of the trade. This may also be used in situations involving tender offers or reorganizations. Also known as risk arbitrage.
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Definition / Meaning of
Family Of Funds
Categories: Mutual Funds, Investing and Trading, Stocks,
Many large mutual fund companies offer a variety of stock, bond, and money market funds with different investment strategies and objectives. Together, these funds make up a family of funds.If you own one fund in a family, you can usually transfer assets to another fund in the same family without sales charges. The transaction is known as an exchange. But unless the funds are in a tax-deferred or tax-free retirement or education savings plan, you'll owe capital gains taxes on increases in value of the fund you're selling.Investing in a family of funds can make diversification and asset allocation easier, provided there are funds within the family that meet your investment criteria. Investing in a family of funds can also simplify recordkeeping. However, the advantages of consolidating your assets within one fund family are being challenged by the proliferation of fund networks. fund networks, sometimes called fund supermarkets, make it easy to spread your investments among several fund families.
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