Before you invest, you may want to review the Funds prospectus, which contains more information about the Fund and its risks. You can find the Funds prospectus, statement of additional information and other information about the Fund online at You can also get this information at no cost by calling the Fund at (800)295-4485 or by sending an e-mail request to the SEC at . The Funds prospectus and statement of additional information, both dated October1, 2012, as supplemented from time to time, are incorporated by reference into this Summary Prospectus.

The Fund seeks to achieve capital growth by engaging in merger arbitrage.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)

Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)

Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price)

Sales Charge (Load) Imposed on Reinvested Dividends

Redemption Fee (as a percentage of amount redeemed within 30 days of purchase)

Exchange Fee (as a percentage of amount exchanged within 30 days of purchase)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Dividend and Interest Expense on Short Positions(3)

(1) This contingent deferred sales charge applies to Class C shares sold within 12 months of purchase.

(2) Other Expenses for Class C shares are based on Class R expenses because the Class C shares have not been offered for a full year.

(3) The Fund is obligated to pay any interest incurred or dividend declared during the period in which the Fund maintains the short position to the lender from which the Fund borrowed the security and the Fund is obligated to record the payment of the accrued interest or dividend as an expense. These expenses are not fees charged to shareholders but are similar to finance charges incurred in borrowing transactions. The Fund may be subject to additional expenses related to short sales (for example, costs of borrowing and margin account maintenance costs).

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

You would pay the following expenses if you did not redeem your shares:

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 563% of the average value of its portfolio.

In attempting to achieve its investment objective, the Fund plans to invest at least 80% of its net assets in equity securities of companies (both U.S. and foreign) that are involved in publicly announced mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations and other corporate reorganizations. Equity securities include common and preferred stock. Merger arbitrage is a highly specialized investment approach designed to profit from the successful completion of mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations and other corporate reorganizations. The Funds investment adviser uses investment strategies designed to minimize market exposure, including short selling and purchasing and selling options. The most common merger arbitrage activity, and the approach the Fund generally uses, involves purchasing the shares of an announced acquisition target company at a discount to their expected value upon completion of the acquisition. The investment adviser may engage in selling securities short when the terms of a proposed acquisition call for the exchange of common stock and/or other securities. In such a case, the common stock of the company to be acquired may be purchased and, at approximately the same time, an equivalent amount of the acquiring companys common stock and/or other securities may be sold short. The purpose of the short sale is to protect against a decline in the market value of the acquiring companys securities prior to the acquisitions completion. The Fund may enter into equity swap agreements for the purpose of attempting to obtain a desired return on, or exposure to, certain equity securities or equity indices in an expedited manner or at a lower cost to the Fund than if the Fund had invested directly in such securities.

The Fund generally engages in active and frequent trading of portfolio securities to achieve its principal investment objective. The Fund will sell or cover a security when the securities of the companies involved in the transaction do not meet the Funds expected return criteria when gauged by prevailing market prices and the relative risks of the situation.

As with all mutual funds, investing in the Fund entails risks that could cause the Fund and you to lose money. The principal risks of investing in the Fund are as follows:

Merger Arbitrage Risks:The principal risk associated with the Funds merger arbitrage investment strategy is that the proposed reorganizations in which the Fund invests may be renegotiated or terminated, in which case the Fund may realize losses.

High Portfolio Turnover Risks:The Funds investment strategies may result in high portfolio turnover rates. This may increase the Funds brokerage commission costs, which would reduce performance. Rapid portfolio turnover also exposes shareholders to a higher current realization of short-term gains which could cause you to pay higher taxes.

Short Sale Risks:The Fund will suffer a loss if it sells a security short and the value of the security rises rather than falls. It is possible that the Funds long positions will decline in value at the same time that the value of its short positions increase, thereby increasing potential losses to the Fund. Short sales expose the Fund to the risk that it will be required to buy the security sold short (also known as covering the short position) at a time when the security has appreciated in value, thus resulting in a loss to the Fund. The Funds investment performance will also suffer if it is required to close out a short position earlier than it had intended.

In addition, the Fund may be subject to expenses related to short sales that are not typically associated with investing in securities directly, such as costs of borrowing. These expenses may negatively impact the performance of the Fund. Short positions introduce more risk to the Fund than long positions (purchases) because the maximum sustainable loss on a security purchased (held long) is limited to the amount paid for the security plus the transaction costs, whereas there is no maximum attainable price of the shorted security. Therefore, in theory, securities sold short have unlimited risk.

Put and Call Options Risk:Options transactions involve special risks that may make it difficult or impossible to close a position when the Fund desires. These risks include: possible imperfect correlation between the price movements of the option and the underlying security; the potential lack of a liquid secondary market at any particular time; and possible price fluctuation limits.

Foreign Securities Risks:The securities of foreign issuers may be less liquid and more volatile than securities of comparable U.S. issuers. The costs associated with securities transactions are often higher in foreign countries than the U.S. The U.S. dollar value of foreign securities traded in foreign currencies (and any dividends and interest earned) held by the Fund or by mutual funds in which the Fund invests may be affected favorably or unfavorably by changes in foreign currency exchange rates. An increase in the U.S. dollar relative to these other currencies will adversely affect the Fund. Additionally, investments in foreign securities, even those publicly traded in the United States, may involve risks which are in addition to those inherent in U.S. investments. Foreign companies may not be subject to the same regulatory requirements of U.S. companies, and as a consequence, there may be less publicly available information about such companies. Also, foreign companies may not be subject to uniform accounting, auditing, and financial reporting standards and requirements comparable to those applicable to U.S. companies. Foreign governments and foreign economies often are less stable than the U.S. Government and the U.S. economy.

Swap Risks:The Fund may enter into derivatives called equity swaps. Risks associated with swap agreements include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts terms and the possible lack of liquidity with respect to the swap agreements. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The swaps market is largely unregulated. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Funds ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

The following information provides some indication of the risks and variability of investing in the Fund by showing how the Funds performance has varied over time. The performance shown reflects the

performance of the Funds Class R shares before and after taxes and the Funds Class I shares before taxes. Performance for the Class C shares of the Fund will be available once they have been offered for one calendar year.

Year-by-Year Total Returns Through December31, 2011 – Class R Shares

The bar chart and performance table shown below depict the performance of the Funds Class R shares for the periods indicated and show how the Funds average annual total returns compare with those of a broad measure of market performance. The performance table includes the performance of the Funds Class I shares before taxes. How the Fund has performed in the past (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.

During the period shown in the bar chart, the highest return for a quarter was 6.21% during the quarter ended March31, 2002 and the lowest return for a quarter was -3.65% during the quarter ended September30, 2004.

The year-to-date return of the Funds Class R shares through June30, 2012 is -0.08%.

While the Class I shares and the Class C shares would have substantially similar annual returns to the Class R shares, because the shares are invested in the same portfolio of securities, the performance of Class I shares and Class C shares will differ from that shown above to the extent that the Classes do not have the same expenses or inception dates.

Average Annual Total Returns for Periods Ended December31, 2011

The table below shows how the Funds average annual total returns for Class R shares and Class I shares compare with those of the Standard& Poors 500 Index. The table also presents the impact of taxes on the returns of the Funds Class R shares. After tax returns are shown for Class R shares only and after-tax returns for Class I and Class C shares will vary. After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after tax returns depend on an investors tax situation and may differ from those shown, and after tax returns shown are not relevant to investors who hold their Fund shares through tax deferred arrangements, such as 401(k) plans or individual retirement accounts. Return after taxes on distributions measures the effect of taxable distributions, but assumes the underlying shares are held for the entire period. Return after taxes on distributions and sale of Fund shares shows the effect of both taxable distributions and any taxable gain or loss that would be realized if the underlying shares were purchased at the beginning and sold at the end of the period (for purposes of the calculation, it is assumed that income dividends and capital gain distributions are reinvested at net asset value and that the entire account is redeemed at the end of the period, including reinvested amounts). The Funds return after taxes on distributions and sale of Fund shares may be higher than its returns before taxes or its returns after taxes on distributions because it may include a tax benefit resulting from the capital losses that would have been incurred.

Class R Return After Taxes on Distributions and Sale of Fund Shares

STANDARD& POORS 500 INDEX (reflects no deduction for fees, expenses, or taxes)

* The inception date for Class R shares is September18, 2000, and the inception date for Class I shares is October17, 2003. The Since Inception return reflected for the Standard& Poors 500 Index is based on the inception date for Class R shares.

Water Island Capital, LLC is the investment adviser to the Fund.

John S. Orrico, President and Trustee of the Fund, has been a portfolio manager of the Fund since January 2000. Todd W. Munn, Portfolio Manager of the Fund, has been a portfolio manager of the Fund since January 2005. Roger P. Foltynowicz, Portfolio Manager of the Fund, has been a portfolio manager of the Fund since January 2005.

Minimum Investment Amounts Class R Shares The minimum initial investment for all types of accounts is $2,000. There is no minimum for subsequent investments other than investments through the Funds Automatic Investment Plan, which has a $100 minimum for investments.

Minimum Investment Amounts Class I Shares The minimum initial investment for all types of accounts is $100,000. There is no minimum for subsequent investments other than investments through the Funds Automatic Investment Plan, which has a $100 minimum for investments.

You may conduct transactions by mail (Regular Mail to The Arbitrage Funds, c/o DST Systems, Inc., P.O. Box 219842, Kansas City, Missouri 64121-9842, or Express/Overnight Mail to The Arbitrage Funds, c/o DST Systems, Inc., 430 West 7th Street, Kansas City, Missouri 64105), or by telephone at (800)295-4485. Transactions will only occur on days the New York Stock Exchange (NYSE) is open. Investors who wish to purchase, exchange or redeem Class R or Class I shares through a broker-dealer should contact the broker-dealer regarding the hours during which orders to purchase, exchange or sell shares of the Fund may be placed. The Funds transfer agent is open from 9:00 a.m. to 5:00 p.m. Eastern Time for purchase, exchange or redemption orders.

Minimum Investment Amounts Class C Shares The minimum initial investment for all types of accounts is $2,000. There is no minimum for subsequent investments in Class C shares.

Purchases, exchanges and redemptions of Class C shares can be made only through institutional channels, such as financial intermediaries and retirement platforms, which have established an agreement with the Funds distributor. Financial intermediaries may charge additional fees for their services. You should contact your financial intermediary or refer to your plan documents for information on how to invest in the Fund. Requests must be received in good order by the Fund or its agent (financial intermediary or

plan sponsor, if applicable) prior to the close of the regular trading session of the New York Stock Exchange in order to receive that days net asset value.

The Funds distributions are taxable, and will be taxed as ordinary income or capital gains, unless you are investing through a tax deferred arrangement, such as a 401(k) plan or an individual retirement account, in which case such distributions may be taxable at a later date.

Payments to Broker-Dealers and Other Financial Intermediaries

If you purchase the Fund through a broker dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediarys website for more information.