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7 Best Performing Arbitrage Mutual Funds for 2020 | fincash.com

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7 Best Arbitrage Mutual Funds 2020

Updated on September 23, 2020 , 18046 views

Generally, people willing to invest in arbitrage funds look for the best arbitrage funds. But what are Arbitrage funds?

An arbitrage fund is a popular short-term financial investment in India. Arbitrage funds are Mutual Funds that leverage the differential price between the cash market and derivative market to generate mutual fund returns.

Top 10 Arbitrage Funds

The returns generated by arbitrage funds are dependent on the volatility of the stock market. Arbitrage mutual funds are hybrid in nature and in times of high or persistent volatility, these funds offer relatively risk-free returns to investors. Before Investing in these funds it is important to understand arbitrage funds taxation and know the best arbitrage funds.

Why Invest in Arbitrage Funds?

Here are some of the benefits of investing in arbitrage funds:

1. Negligible Risk

Arbitrage funds are not 100% risk-free but they do carry negligible risk. They bank on the mispricing happening in the markets. This gives the investor a safer option compared to other short-term funds since these funds offer better returns during market volatility.

2. Returns

These funds generally give a return of about 7-9% of the amount invested. This is higher compared to Liquid Funds or short-term debt funds in low rate enviornment (When RBI is reducing rate).

Risk-in-Arbitrage-Funds

Thus, making arbitrage funds a lucrative investment option.

3. Favourable Taxation

One of the biggest benefits of investing in these funds is the tax treatment. Equity Funds attract long term capital gains. If the gains are made up to INR 1 lakh then it counts under tax-free. Tax at 10% applies to gains above INR 1 lakh.

Arbitrage Funds Taxation

As mentioned above, these funds are taxed favourably. They are said to be a combination of good Debt fund returns and the tax treatment of equity mutual funds. If more than 65% of the fund is invested in equity, it will be considered as Equity Funds for taxation. As per the Budget 2018, equity funds would attract Long Term Capital Gains (LTCG). Investors would be taxed at 10% (with no indexation) under long term Capital Gain tax. Gains up to INR 1 lakh are free of tax. Tax at 10% applies to gains above INR 1 lakh. Short-term capital gains from equity attract a 15% concessional rate.

Therefore, if you are planning to make a short-term investment and avail tax benefits along with it, consider investing in arbitrage funds.

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Top 7 Arbitrage Mutual Funds 2020 - 2021

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2019 (%)
L&T Arbitrage Opportunities Fund Growth ₹14.726
↑ 0.01
₹1,1791.12.65.55.866
BNP Paribas Arbitrage Fund  Growth ₹12.447
↑ 0.01
₹6310.82.25.25.9 6.2
Edelweiss Arbitrage Fund Growth ₹14.8729
↑ 0.01
₹3,5010.82.35.15.966.2
UTI Arbitrage Fund Growth ₹26.9204
↑ 0.02
₹2,9980.92.655.85.96.2
Invesco India Arbitrage Fund Growth ₹24.3666
↑ 0.02
₹5510.82.555.65.85.9
Nippon India Arbitrage Fund Growth ₹20.4897
↑ 0.02
₹7,3840.82.64.9666.2
Kotak Equity Arbitrage Fund Growth ₹28.5452
↑ 0.02
₹15,0000.82.44.95.866.1
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Sep 20

*Below is the list of Arbitrage funds sorted on last 1 year return and having AUM > 100 Crore.

1. L&T Arbitrage Opportunities Fund

To seek to generate reasonable returns by predominantly investing in arbitrage opportunities in the cash and derivatives segments of the equity markets and by investing balance in debt and money market instruments.

L&T Arbitrage Opportunities Fund is a Hybrid - Arbitrage fund was launched on 30 Jun 14. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 6.4% since its launch.  Ranked 5 in Arbitrage category.  Return for 2019 was 6% , 2018 was 6% and 2017 was 5.8% .

Below is the key information for L&T Arbitrage Opportunities Fund

L&T Arbitrage Opportunities Fund
Growth
Launch Date 30 Jun 14
NAV (25 Sep 20) ₹14.726 ↑ 0.01   (0.07 %)
Net Assets (Cr) ₹1,179 on 31 Aug 20
Category Hybrid - Arbitrage
AMC L&T Investment Management Ltd
Rating
Risk Moderately Low
Expense Ratio 0.96
Sharpe Ratio 0.26
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-1 Months (0.5%),1 Months and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Aug 15₹10,000
31 Aug 16₹10,636
31 Aug 17₹11,275
31 Aug 18₹11,935
31 Aug 19₹12,712
31 Aug 20₹13,375

L&T Arbitrage Opportunities Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹349,120.
Net Profit of ₹49,120
Invest Now

Returns for L&T Arbitrage Opportunities Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20

DurationReturns
1 Month 0.5%
3 Month 1.1%
6 Month 2.6%
1 Year 5.5%
3 Year 5.8%
5 Year 6%
10 Year
15 Year
Since launch 6.4%
Historical performance (Yearly) on absolute basis
YearReturns
2019 6%
2018 6%
2017 5.8%
2016 6.5%
2015 7.7%
2014
2013
2012
2011
2010
Fund Manager information for L&T Arbitrage Opportunities Fund
NameSinceTenure
Venugopal Manghat30 Jun 146.18 Yr.
Jalpan Shah24 Jan 191.61 Yr.
Praveen Ayathan30 Jun 146.18 Yr.
Alok Ranjan1 Oct 190.92 Yr.

Data below for L&T Arbitrage Opportunities Fund as on 31 Aug 20

Asset Allocation
Asset ClassValue
Cash100.2%
Equity Sector Allocation
SectorValue
Financial Services21.25%
Basic Materials8.67%
Energy7.57%
Health Care6.35%
Communication Services5.29%
Consumer Defensive4.56%
Utility4.35%
Industrials3.97%
Consumer Cyclical3.26%
Technology1.76%
Real Estate0.29%
Debt Sector Allocation
SectorValue
Cash Equivalent99.7%
Corporate0.34%
Government0.16%
Credit Quality
RatingValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
L&T Liquid Dir Gr
Investment Fund | -
6%₹70 Cr253
↑ 253
Future on Bharti Airtel Ltd
Derivatives | -
5%-₹58 Cr1,121,706
↑ 1,119,855
Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Jul 20 | BHARTIARTL
5%₹58 Cr1,121,706
↑ 1,119,855
Future on Housing Development Finance Corp Ltd
Derivatives | -
4%-₹52 Cr283,200
↑ 206,700
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Aug 18 | HDFC
4%₹52 Cr283,200
↑ 206,700
Future on Reliance Industries Ltd
Derivatives | -
3%-₹40 Cr190,385
↑ 150,490
Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 20 | RELIANCE
3%₹40 Cr190,385
↑ 150,490
Future on ICICI Bank Ltd
Derivatives | -
3%-₹37 Cr932,250
↑ 11,000
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Dec 19 | ICICIBANK
3%₹37 Cr932,250
↑ 11,000
Future on Tata Power Co Ltd
Derivatives | -
3%-₹34 Cr5,683,500
↑ 5,238,000

2. BNP Paribas Arbitrage Fund 

(Erstwhile BNP Paribas Enhanced Arbitrage Fund)

The primary investment objective of the scheme is to generate income and capital appreciation by investing in a combination of diversified portfolio of equity and equity related instruments, including use of equity derivatives strategies and arbitrage opportunities with exposure in debt and fixed income instruments. However, there can be no assurance that the investment objectives of the Scheme will be realized. The Scheme does not guarantee/indicate any returns

BNP Paribas Arbitrage Fund  is a Hybrid - Arbitrage fund was launched on 28 Dec 16. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 6% since its launch.  Return for 2019 was 6.2% , 2018 was 6% and 2017 was 6.4% .

Below is the key information for BNP Paribas Arbitrage Fund 

BNP Paribas Arbitrage Fund 
Growth
Launch Date 28 Dec 16
NAV (25 Sep 20) ₹12.447 ↑ 0.01   (0.05 %)
Net Assets (Cr) ₹631 on 31 Aug 20
Category Hybrid - Arbitrage
AMC BNP Paribas Asset Mgmt India Pvt. Ltd
Rating Not Rated
Risk Moderately High
Expense Ratio 0.99
Sharpe Ratio 0.02
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load 0-1 Months (0.25%),1 Months and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Aug 17₹10,446
31 Aug 18₹11,064
31 Aug 19₹11,785
31 Aug 20₹12,372

BNP Paribas Arbitrage Fund  SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹349,120.
Net Profit of ₹49,120
Invest Now

Returns for BNP Paribas Arbitrage Fund 

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20

DurationReturns
1 Month 0.5%
3 Month 0.8%
6 Month 2.2%
1 Year 5.2%
3 Year 5.9%
5 Year
10 Year
15 Year
Since launch 6%
Historical performance (Yearly) on absolute basis
YearReturns
2019 6.2%
2018 6%
2017 6.4%
2016
2015
2014
2013
2012
2011
2010
Fund Manager information for BNP Paribas Arbitrage Fund 
NameSinceTenure
Karthikraj Lakshmanan28 Dec 163.68 Yr.
Mayank Prakash28 Dec 163.68 Yr.
Chockalingam Narayanan1 Jul 200.17 Yr.

Data below for BNP Paribas Arbitrage Fund  as on 31 Aug 20

Asset Allocation
Asset ClassValue
Cash100.24%
Equity Sector Allocation
SectorValue
Financial Services16.89%
Health Care10.72%
Consumer Defensive9.59%
Energy9.14%
Basic Materials4.89%
Communication Services4.72%
Technology4.31%
Utility3.34%
Real Estate1.61%
Industrials0.77%
Consumer Cyclical0.68%
Debt Sector Allocation
SectorValue
Cash Equivalent100.24%
Credit Quality
RatingValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Future on Hindustan Unilever Ltd
Derivatives | -
4%-₹28 Cr130,800
Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Apr 20 | 500696
4%₹28 Cr130,800
Future on HDFC Bank Ltd
Derivatives | -
4%-₹26 Cr139,200
↑ 119,100
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 20 | HDFC
4%₹26 Cr139,200
↑ 119,100
Future on Reliance Industries Ltd
Derivatives | -
4%-₹24 Cr114,130
↑ 114,130
Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 20 | RELIANCE
4%₹24 Cr114,130
↑ 114,130
Future on Divi's Laboratories Ltd
Derivatives | -
4%-₹23 Cr73,200
↓ -28,400
Divi's Laboratories Ltd (Healthcare)
Equity, Since 29 Feb 20 | DIVISLAB
4%₹23 Cr73,200
↓ -28,400
Hpcl Fut 24-Sep-20
Derivatives | -
4%-₹22 Cr1,098,900
↑ 1,098,900
Hindustan Petroleum Corp Ltd (Energy)
Equity, Since 30 Jun 20 | HINDPETRO
4%₹22 Cr1,098,900
↑ 151,200

3. Edelweiss Arbitrage Fund

The investment objective of the Scheme is to generate income by predominantly investing in arbitrage opportunities in the cash and the derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments. However, there is no assurance that the investment objective of the scheme will be realized.

Edelweiss Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 27 Jun 14. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 6.6% since its launch.  Ranked 1 in Arbitrage category.  Return for 2019 was 6.2% , 2018 was 6.1% and 2017 was 5.8% .

Below is the key information for Edelweiss Arbitrage Fund

Edelweiss Arbitrage Fund
Growth
Launch Date 27 Jun 14
NAV (25 Sep 20) ₹14.8729 ↑ 0.01   (0.06 %)
Net Assets (Cr) ₹3,501 on 31 Aug 20
Category Hybrid - Arbitrage
AMC Edelweiss Asset Management Limited
Rating
Risk Moderately Low
Expense Ratio 1.12
Sharpe Ratio 0.01
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-30 Days (0.25%),30 Days and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Aug 15₹10,000
31 Aug 16₹10,667
31 Aug 17₹11,314
31 Aug 18₹11,978
31 Aug 19₹12,784
31 Aug 20₹13,418

Edelweiss Arbitrage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹357,992.
Net Profit of ₹57,992
Invest Now

Returns for Edelweiss Arbitrage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20

DurationReturns
1 Month 0.4%
3 Month 0.8%
6 Month 2.3%
1 Year 5.1%
3 Year 5.9%
5 Year 6%
10 Year
15 Year
Since launch 6.6%
Historical performance (Yearly) on absolute basis
YearReturns
2019 6.2%
2018 6.1%
2017 5.8%
2016 6.7%
2015 8%
2014
2013
2012
2011
2010
Fund Manager information for Edelweiss Arbitrage Fund
NameSinceTenure
Dhawal Dalal22 Dec 163.7 Yr.
Bhavesh Jain27 Jun 146.19 Yr.

Data below for Edelweiss Arbitrage Fund as on 31 Aug 20

Asset Allocation
Asset ClassValue
Cash89.31%
Equity1.05%
Debt9.64%
Equity Sector Allocation
SectorValue
Financial Services14.57%
Basic Materials9.64%
Health Care9.05%
Energy8.22%
Consumer Defensive7.21%
Industrials5.37%
Consumer Cyclical4.42%
Technology4.23%
Communication Services3.12%
Utility1.89%
Real Estate0.2%
Debt Sector Allocation
SectorValue
Cash Equivalent87.2%
Corporate6.1%
Government5.65%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Future on Reliance Industries Ltd
Derivatives | -
6%-₹210 Cr1,006,465
↑ 1,006,465
Reliance Industries Ltd (Energy)
Equity, Since 30 Apr 18 | RELIANCE
6%₹209 Cr1,006,465
↑ 479,750
Future on Housing Development Finance Corp Ltd
Derivatives | -
5%-₹175 Cr948,900
↑ 108,600
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Aug 18 | HDFC
5%₹174 Cr948,900
↑ 108,600
Future on ICICI Bank Ltd
Derivatives | -
3%-₹99 Cr2,503,875
↓ -2,534,125
182 DTB 31122020
Sovereign Bonds | -
3%₹99 Cr10,000,000
↑ 10,000,000
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 20 | ICICIBANK
3%₹99 Cr2,503,875
↓ -2,534,125
Future on Adani Ports & Special Economic Zone Ltd
Derivatives | -
3%-₹98 Cr2,735,000
↓ -5,000
Adani Ports & Special Economic Zone Ltd (Industrials)
Equity, Since 30 Sep 19 | 532921
3%₹97 Cr2,735,000
↓ -5,000
Future on Hindustan Unilever Ltd
Derivatives | -
2%-₹79 Cr370,200
↓ -113,400

4. UTI Arbitrage Fund

(Erstwhile UTI SPREAD Fund)

The investment objective of the scheme is to provide capital appreciation and dividend distribution through arbitrage opportunities arising out of price differences between the cash and derivative market by investing predominantly in equity and equity-related securities, derivatives and the balance portion in debt securities. However, there can be no assurance that the investment objective of the scheme will be realised.

UTI Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 22 Jun 06. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.2% since its launch.  Ranked 8 in Arbitrage category.  Return for 2019 was 6.2% , 2018 was 6.2% and 2017 was 5.7% .

Below is the key information for UTI Arbitrage Fund

UTI Arbitrage Fund
Growth
Launch Date 22 Jun 06
NAV (25 Sep 20) ₹26.9204 ↑ 0.02   (0.07 %)
Net Assets (Cr) ₹2,998 on 31 Aug 20
Category Hybrid - Arbitrage
AMC UTI Asset Management Company Ltd
Rating
Risk Moderately Low
Expense Ratio 0.78
Sharpe Ratio -0.18
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-30 Days (0.5%),30 Days and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Aug 15₹10,000
31 Aug 16₹10,632
31 Aug 17₹11,263
31 Aug 18₹11,914
31 Aug 19₹12,734
31 Aug 20₹13,343

UTI Arbitrage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹349,120.
Net Profit of ₹49,120
Invest Now

Returns for UTI Arbitrage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20

DurationReturns
1 Month 0.4%
3 Month 0.9%
6 Month 2.6%
1 Year 5%
3 Year 5.8%
5 Year 5.9%
10 Year
15 Year
Since launch 7.2%
Historical performance (Yearly) on absolute basis
YearReturns
2019 6.2%
2018 6.2%
2017 5.7%
2016 6.5%
2015 7.6%
2014 8.1%
2013 7.7%
2012 8.7%
2011 8.4%
2010 4.8%
Fund Manager information for UTI Arbitrage Fund
NameSinceTenure
Amit Sharma2 Jul 182.17 Yr.
Rajeev Gupta2 Jul 182.17 Yr.

Data below for UTI Arbitrage Fund as on 31 Aug 20

Asset Allocation
Asset ClassValue
Cash90.97%
Debt9.05%
Equity Sector Allocation
SectorValue
Financial Services18.6%
Energy10.85%
Health Care8.32%
Consumer Defensive7.41%
Basic Materials7.16%
Communication Services5.62%
Consumer Cyclical3.45%
Technology3.31%
Industrials2.34%
Utility0.78%
Real Estate0.06%
Debt Sector Allocation
SectorValue
Cash Equivalent90.16%
Corporate9.05%
Government0.8%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Future on Reliance Industries Ltd
Derivatives | -
8%-₹225 Cr
Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 18 | RELIANCE
8%₹225 Cr1,082,720
↑ 232,300
Future on ICICI Bank Ltd
Derivatives | -
5%-₹156 Cr
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 20 | ICICIBANK
5%₹156 Cr3,955,875
↓ -429,000
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Sep 18 | HDFC
4%₹133 Cr728,400
↑ 245,400
Future on HDFC Bank Ltd
Derivatives | -
4%-₹133 Cr
Kotak Mahindra Prime Limited
Debentures | -
4%₹124 Cr1,000
Future on IndusInd Bank Ltd
Derivatives | -
4%-₹117 Cr
IndusInd Bank Ltd (Financial Services)
Equity, Since 31 Jul 19 | INDUSINDBK
4%₹117 Cr1,848,800
↓ -38,400
Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Sep 18 | 500696
3%₹104 Cr489,000
↓ -117,600

5. Invesco India Arbitrage Fund

The primary investment objective of the scheme is to generate income through arbitrage opportunities emerging out of mis-pricing between the cash market and the derivatives market and through deployment of surplus cash in fixed income instruments.

Invesco India Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 30 Apr 07. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 6.9% since its launch.  Ranked 9 in Arbitrage category.  Return for 2019 was 5.9% , 2018 was 5.9% and 2017 was 5.5% .

Below is the key information for Invesco India Arbitrage Fund

Invesco India Arbitrage Fund
Growth
Launch Date 30 Apr 07
NAV (25 Sep 20) ₹24.3666 ↑ 0.02   (0.09 %)
Net Assets (Cr) ₹551 on 31 Aug 20
Category Hybrid - Arbitrage
AMC Invesco Asset Management (India) Private Ltd
Rating
Risk Moderately Low
Expense Ratio 0.82
Sharpe Ratio -0.18
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-15 Days (0.5%),15 Days and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Aug 15₹10,000
31 Aug 16₹10,639
31 Aug 17₹11,252
31 Aug 18₹11,906
31 Aug 19₹12,660
31 Aug 20₹13,265

Invesco India Arbitrage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹349,120.
Net Profit of ₹49,120
Invest Now

Returns for Invesco India Arbitrage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20

DurationReturns
1 Month 0.4%
3 Month 0.8%
6 Month 2.5%
1 Year 5%
3 Year 5.6%
5 Year 5.8%
10 Year
15 Year
Since launch 6.9%
Historical performance (Yearly) on absolute basis
YearReturns
2019 5.9%
2018 5.9%
2017 5.5%
2016 6.5%
2015 7.6%
2014 8.3%
2013 7.9%
2012 9.1%
2011 7.5%
2010 5.7%
Fund Manager information for Invesco India Arbitrage Fund
NameSinceTenure
Rajeev Bhardwaj19 May 200.29 Yr.

Data below for Invesco India Arbitrage Fund as on 31 Aug 20

Asset Allocation
Asset ClassValue
Cash96.52%
Debt3.72%
Equity Sector Allocation
SectorValue
Financial Services12.47%
Technology11.93%
Consumer Defensive11.43%
Health Care10.22%
Energy9.29%
Basic Materials5.56%
Communication Services4.05%
Industrials1.05%
Consumer Cyclical0.46%
Real Estate0.04%
Debt Sector Allocation
SectorValue
Cash Equivalent96.52%
Corporate1.9%
Government1.82%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Future on Reliance Industries Ltd
Derivatives | -
7%-₹41 Cr197,455
↑ 34,845
Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 20 | RELIANCE
7%₹41 Cr197,455
↑ 34,845
Future on Housing Development Finance Corp Ltd
Derivatives | -
7%-₹39 Cr213,600
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 19 | HDFC
7%₹39 Cr213,600
Future on Infosystems SA
Derivatives | -
7%-₹36 Cr387,600
↑ 387,600
Infosys Ltd (Technology)
Equity, Since 31 Jul 19 | INFY
7%₹36 Cr387,600
↑ 265,200
Future on Tata Consultancy Services Ltd
Derivatives | -
5%-₹28 Cr123,600
↑ 66,900
Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Jul 20 | TCS
5%₹28 Cr123,600
↑ 66,900
Future on Dr Reddy's Laboratories Ltd
Derivatives | -
5%-₹28 Cr64,750
↑ 64,750
Dr Reddy's Laboratories Ltd (Healthcare)
Equity, Since 31 Mar 20 | 500124
5%₹28 Cr64,750
↑ 250

6. Nippon India Arbitrage Fund

(Erstwhile Reliance Arbitrage Advantage Fund)

The investment objective of the scheme is to generate income by taking advantage of the arbitrage opportunities that potentially exists between cash and derivative market and within the derivative segment along with investments in debt securities & money market instruments.

Nippon India Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 14 Oct 10. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.5% since its launch.  Ranked 3 in Arbitrage category.  Return for 2019 was 6.2% , 2018 was 6.8% and 2017 was 5.5% .

Below is the key information for Nippon India Arbitrage Fund

Nippon India Arbitrage Fund
Growth
Launch Date 14 Oct 10
NAV (25 Sep 20) ₹20.4897 ↑ 0.02   (0.08 %)
Net Assets (Cr) ₹7,384 on 31 Aug 20
Category Hybrid - Arbitrage
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 1.05
Sharpe Ratio -0.25
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 100
Exit Load 0-1 Months (0.25%),1 Months and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Aug 15₹10,000
31 Aug 16₹10,628
31 Aug 17₹11,272
31 Aug 18₹11,967
31 Aug 19₹12,796
31 Aug 20₹13,396

Nippon India Arbitrage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹357,992.
Net Profit of ₹57,992
Invest Now

Returns for Nippon India Arbitrage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20

DurationReturns
1 Month 0.4%
3 Month 0.8%
6 Month 2.6%
1 Year 4.9%
3 Year 6%
5 Year 6%
10 Year
15 Year
Since launch 7.5%
Historical performance (Yearly) on absolute basis
YearReturns
2019 6.2%
2018 6.8%
2017 5.5%
2016 6.6%
2015 8.1%
2014 8%
2013 9.7%
2012 9.9%
2011 8.3%
2010
Fund Manager information for Nippon India Arbitrage Fund
NameSinceTenure
Anju Chhajer1 Feb 200.58 Yr.
Kinjal Desai25 May 182.27 Yr.
Anand Gupta12 Sep 181.97 Yr.

Data below for Nippon India Arbitrage Fund as on 31 Aug 20

Asset Allocation
Asset ClassValue
Cash92.81%
Debt7.43%
Equity Sector Allocation
SectorValue
Financial Services19.31%
Energy10.09%
Health Care8.35%
Basic Materials7.46%
Communication Services5.93%
Consumer Defensive4.63%
Technology4.39%
Consumer Cyclical2.79%
Industrials1.68%
Utility1.03%
Real Estate0.24%
Debt Sector Allocation
SectorValue
Cash Equivalent89.31%
Corporate8.21%
Government2.72%
Credit Quality
RatingValue
AA16.86%
AAA83.14%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Nippon India Money Market Dir Gr
Investment Fund | -
6%₹462 Cr1,468,876
Future on Reliance Industries Ltd
Derivatives | -
6%-₹461 Cr2,208,365
↑ 805,980
Reliance Industries Ltd (Energy)
Equity, Since 31 Dec 17 | RELIANCE
6%₹459 Cr2,208,365
↑ 805,980
Future on Bharti Airtel Ltd
Derivatives | -
5%-₹398 Cr7,709,415
↓ -18,510
Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Aug 17 | BHARTIARTL
5%₹396 Cr7,709,415
↓ -18,510
Future on ICICI Bank Ltd
Derivatives | -
5%-₹388 Cr9,816,125
↓ -2,635,875
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 20 | ICICIBANK
5%₹387 Cr9,816,125
↓ -2,635,875
Future on Housing Development Finance Corp Ltd
Derivatives | -
5%-₹370 Cr2,012,400
↓ -59,400
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Jan 18 | HDFC
5%₹369 Cr2,012,400
↓ -59,400
Nippon India Liquid Dir Gr
Investment Fund | -
4%₹324 Cr655,857

7. Kotak Equity Arbitrage Fund

The investment objective of the scheme is to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and by investing the balance in debt and money market instruments. However, there is no assurance that the objective of the scheme will be realized

Kotak Equity Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 29 Sep 05. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.2% since its launch.  Ranked 2 in Arbitrage category.  Return for 2019 was 6.1% , 2018 was 6.3% and 2017 was 5.8% .

Below is the key information for Kotak Equity Arbitrage Fund

Kotak Equity Arbitrage Fund
Growth
Launch Date 29 Sep 05
NAV (25 Sep 20) ₹28.5452 ↑ 0.02   (0.06 %)
Net Assets (Cr) ₹15,000 on 31 Aug 20
Category Hybrid - Arbitrage
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.69
Sharpe Ratio -0.25
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-30 Days (0.25%),30 Days and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Aug 15₹10,000
31 Aug 16₹10,648
31 Aug 17₹11,297
31 Aug 18₹11,970
31 Aug 19₹12,783
31 Aug 20₹13,382

Kotak Equity Arbitrage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹349,120.
Net Profit of ₹49,120
Invest Now

Returns for Kotak Equity Arbitrage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20

DurationReturns
1 Month 0.4%
3 Month 0.8%
6 Month 2.4%
1 Year 4.9%
3 Year 5.8%
5 Year 6%
10 Year
15 Year
Since launch 7.2%
Historical performance (Yearly) on absolute basis
YearReturns
2019 6.1%
2018 6.3%
2017 5.8%
2016 6.7%
2015 7.5%
2014 9%
2013 9.2%
2012 9.6%
2011 7.5%
2010 6.3%
Fund Manager information for Kotak Equity Arbitrage Fund
NameSinceTenure
Hiten Shah3 Oct 190.92 Yr.

Data below for Kotak Equity Arbitrage Fund as on 31 Aug 20

Asset Allocation
Asset ClassValue
Cash100.24%
Equity Sector Allocation
SectorValue
Financial Services16.62%
Energy8.02%
Consumer Defensive7.91%
Basic Materials7.17%
Technology7.03%
Health Care6.65%
Communication Services4.67%
Consumer Cyclical4.04%
Industrials3.05%
Utility1.93%
Real Estate0.44%
Debt Sector Allocation
SectorValue
Cash Equivalent98.49%
Corporate1.58%
Government0.17%
Credit Quality
RatingValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Kotak Liquid Dir Gr
Investment Fund | -
9%₹1,383 Cr3,386,942
↑ 2,451
Reliance Industries Ltd.-SEP2020
Derivatives | -
5%-₹796 Cr3,812,750
↑ 3,812,750
Reliance Industries Ltd (Energy)
Equity, Since 31 May 18 | RELIANCE
5%₹793 Cr3,812,750
↑ 645,895
HDFC Ltd.-SEP2020
Derivatives | -
5%-₹754 Cr4,096,200
↑ 4,096,200
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Sep 17 | HDFC
5%₹751 Cr4,096,200
↓ -895,200
Infosys Ltd.-SEP2020
Derivatives | -
3%-₹502 Cr5,385,600
↑ 5,385,600
Infosys Ltd (Technology)
Equity, Since 31 Jul 18 | INFY
3%₹500 Cr5,385,600
↑ 2,036,400
Bharti Airtel Ltd.-SEP2020
Derivatives | -
3%-₹460 Cr8,914,416
↑ 8,914,416
Bharti Airtel Ltd (Communication Services)
Equity, Since 31 May 19 | BHARTIARTL
3%₹457 Cr8,914,416
↓ -440,538
ICICI Bank Ltd.-SEP2020
Derivatives | -
3%-₹406 Cr10,254,750
↑ 10,254,750

Things to consider as an Investor

1. Risk

As trades are carried out on the stock exchange, there’s no counter party risk involved in these funds. Even though the fund manager is buying and selling shares in cash and futures market, there is no risk exposure to equities as is the case with other diversified equity mutual funds. Though the ride looks smooth, do not get too comfortable with these funds. As more people start trading into arbitrage funds, there will be not many arbitrage opportunities available. The spread between cash and future market prices will erode, leaving little for the arbitrage focused investors.

2. Return

Arbitrage Funds may be a good opportunity to make reasonable returns for those who can understand it and then make the most of it. The fund manager tries to generate an Alpha using price differentials in markets. Historically, arbitrage funds have been found to give returns in the range of 7%-8% over a period of 5-10 years. If you are looking to earn moderate returns via a portfolio which has a perfect blend of debt and equity in a volatile market, arbitrage funds may be your thing. However, you need to keep one thing in mind that there are no guaranteed returns in arbitrage funds.

3. Cost

Cost becomes an important consideration while evaluating arbitrage funds. These funds charge an annual fee called expense ratio which is expressed as a percentage of the fund’s assets. It includes fund manager’s fee and fund management charges. Due to frequent trading, arbitrage funds would incur huge transaction costs and has a high turnover ratio. Additionally, the fund may levy exit loads for a period of 30 to 60 days to discourage investors from exiting early. All these costs may lead to increase in the expense ratio of the fund. A high expense ratio puts a downward pressure on your take-home returns.

4. Investment Horizon

Arbitrage funds may be suitable for investors having a short to medium term horizon of 3 to 5 years. As these funds charge exit loads, you may consider them only when you are ready to stay invested for a period of at least 3-6 months. At the same time, you need to understand that fund returns are highly dependent on the existence of high volatility. So, choosing a lump sum investment would make sense over Systematic investment plan (SIPs). In absence of volatility, liquid funds may give better returns than arbitrage funds over the same investment horizon. Hence, you need to keep the overall market scenario in mind while choosing arbitrage funds.

5. Financial Goals

If you have short to medium term Financial goals, then arbitrage funds are your thing. Instead of a regular savings bank account, you may use these funds to park excess funds in order to create an emergency fund and earn higher returns on them. In case you were already invested in riskier havens equity funds, then you may begin a Systematic Transfer Plan (STP) from the equity funds to a less risky haven like arbitrage funds as you approach completion of the financial goal. This would reduce your portfolio’s overall risk profile but at the same time reduce the returns also. You cannot expect to earn double-digit returns in arbitrage funds.

How to Invest in Arbitrage Funds Online?

  1. Open Free Investment Account for Lifetime at Fincash.com.

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

    Get Started

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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