The broad sell-off in September confirmed that Wall Street is still in a bear market. However, it also served as a chance for investment firms to prove their alternative strategies are worth a look from investors seeking less volatility. One firm with several winners this year is First Trust, which has multiple funds that have risen in 2022 despite not being pure inverse index funds or energy-focused products, which make up the bulk of top performers lists.
The First Trust fund also has some short positions on deals that the managers think are likely to not close or close at a lower price. "When the equity market is up 30%, people tend to be less interested in a merger-arb strategy because they tend to be more focused on what we're doing really well today," Issakainen said. The fund has attracted more than $70 million of inflows this year, according to FactSet.