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American Beacon Ionic Strategic Arbitrage

Portfolio information as of December 31, 2016
  • Summary
  • Performance
  • Overview

Investment Objective

The Fund’s investment objective is to seek capital appreciation with low volatility and reduced correlation to equities and interest rates.

commitment to risk management

Ionic Capital Management LLC (“Ionic”) is based in New York with an office in San Francisco. The alternative asset management firm focuses on relative-value arbitrage and event-driven investment strategies. Within the relative-value arbitrage strategies, Ionic strives to generate negatively correlated returns and outperformance in uncertain markets using a variety of asset classes.

Firm inception: 2006

Portfolio Managers:

  • Bart Baum, Chief Investment Officer and Principal; industry since 1992
  • Dan Stone, Principal; industry since 1996
  • Adam Radosti, Principal; industry since 1994
  • Doug Fincher; industry since 1987

investment philosophy:
ABSOLUTE RETURNS WITH
LIMITED CORRELATION

The investment team seeks to combine relative value-based arbitrage strategies with a disciplined portfolio and risk management process. It strives to employ a “market-neutral” strategy, meaning the Fund’s returns are not intended to be closely correlated to the stock market as a whole, interest rates or a particular market index. The Fund’s asset allocation among its arbitrage strategies and the use of various hedging strategies are intended to enhance returns and mitigate downside risk. Risk management is a key element of the investment philosophy.

  • Low correlations to other asset classes
  • Ability to profit in rising and falling markets

Total Fund Assets

$ 169.7 Million

Sub-Advisor (%)

Ionic Capital Management LLC 100%

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The Fund’s strategy of investing in a variety of arbitrage strategies entails certain risks including that the sub-advisor’s judgments about allocation between such strategies, as well as individual arbitrage opportunities, may not perform to expectations, resulting in the Fund’s underperformance or even losses versus other similar funds. Arbitrage is the simultaneous purchase and sale of an asset or assets to take advantage of a perceived pricing anomaly. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. The Fund may have high portfolio turnover, which could increase the Fund’s transaction costs and possibly have a negative impact on performance. Investing in small- and mid-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. The use of fixed-income securities, including convertible securities, entails interest rate and credit risks. In addition, the value of a convertible security could fluctuate based on the value of the underlying stock.  Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in derivative instruments involves liquidity, credit, interest rate and market risks. Short sales involve special risks, including greater reliance on the sub-advisor’s ability to accurately anticipate the future value of a security or instrument; the Fund’s losses are potentially unlimited in a short sale. Please see the prospectus for a complete discussion of the Fund's risks. There can be no assurances that the investment objectives of this Fund will be met.

For a prospectus containing more information, including expenses, click here. Read it carefully before you invest or send money. Past performance is no guarantee of future results.

American Beacon is a registered service mark of American Beacon Advisors, Inc. American Beacon Funds and American Beacon Ionic Strategic Arbitrage Fund are service marks of American Beacon Advisors, Inc.