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7 Best Arbitrage Mutual Funds 2019
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.
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).
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.
Talk to our investment specialist
Top 7 Arbitrage Mutual Funds 2019 - 2020
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2018 (%) UTI Arbitrage Fund Growth ₹25.8949
↑ 0.00 ₹2,915 1.3 3.1 6.3 6.1 6.5 6.2 Edelweiss Arbitrage Fund Growth ₹14.2794
↓ 0.00 ₹3,854 1.3 3.1 6.3 6.1 6.7 6.1 IDFC Arbitrage Fund Growth ₹24.2377
↑ 0.00 ₹10,891 1.2 3 6.3 6 6.4 6.3 Reliance Arbitrage Fund Growth ₹19.713
↓ 0.00 ₹9,497 1.2 3 6.3 6.2 6.7 6.8 Aditya Birla Sun Life Arbitrage Fund Growth ₹19.7139
↓ 0.00 ₹5,150 1.3 3.1 6.3 6 6.5 6 BNP Paribas Arbitrage Fund Growth ₹11.95
↑ 0.00 ₹662 1.3 3 6.2 6 Kotak Equity Arbitrage Fund Growth ₹27.4615
↓ 0.00 ₹16,198 1.3 3 6.2 6.1 6.6 6.3 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 19 Nov 19
*Below is the list of Arbitrage funds sorted on last 1 year return and having AUM > 100 Crore.
(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 Below is the key information for UTI Arbitrage Fund Returns up to 1 year are on 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 Below is the key information for Edelweiss Arbitrage Fund Returns up to 1 year are on The investment objective of the Scheme is to generate capital appreciation and
income by predominantly investing in arbitrage opportunity in the cash and
the derivative segments of the equity markets and the arbitrage opportunity
available within the derivative segments 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. IDFC Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 21 Dec 06. It is a fund with Moderately Low risk and has given a Below is the key information for IDFC Arbitrage Fund Returns up to 1 year are on (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. Reliance 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 Below is the key information for Reliance Arbitrage Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Enhanced Arbitrage Fund) An Open ended Equity Scheme with an investment objective to generate income by investing predominantly in equity and equity related instruments. Scheme intends to take advantage from the price differentials / mis-pricing prevailing for stock / index in various market segments (Cash & Futures). Aditya Birla Sun Life Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 24 Jul 09. It is a fund with Moderate risk and has given a Below is the key information for Aditya Birla Sun Life Arbitrage Fund Returns up to 1 year are on (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 Below is the key information for BNP Paribas Arbitrage Fund Returns up to 1 year are on 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 Below is the key information for Kotak Equity Arbitrage Fund Returns up to 1 year are on 1. UTI Arbitrage Fund
CAGR/Annualized return of 7.4% since its launch. Ranked 8 in Arbitrage category. Return for 2018 was 6.2% , 2017 was 5.7% and 2016 was 6.5% . UTI Arbitrage Fund
Growth Launch Date 22 Jun 06 NAV (19 Nov 19) ₹25.8949 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹2,915 on 31 Oct 19 Category Hybrid - Arbitrage AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.78 Sharpe Ratio 4.4 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.
Date Value 31 Oct 14 ₹10,000 31 Oct 15 ₹10,776 31 Oct 16 ₹11,455 31 Oct 17 ₹12,121 31 Oct 18 ₹12,885 31 Oct 19 ₹13,710 Returns for UTI Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Nov 19 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 3.1% 1 Year 6.3% 3 Year 6.1% 5 Year 6.5% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 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% 2009 6.4% Fund Manager information for UTI Arbitrage Fund
Name Since Tenure Amit Sharma 2 Jul 18 0.58 Yr. Rajeev Gupta 2 Jul 18 0.58 Yr. Data below for UTI Arbitrage Fund as on 31 Oct 19
Asset Allocation
Asset Class Value Cash 97.67% Debt 2.33% Equity Sector Allocation
Sector Value Financial Services 17.99% Technology 10.01% Consumer Defensive 9.31% Basic Materials 7.38% Energy 6.96% Consumer Cyclical 5.41% Health Care 4.6% Industrials 2.42% Utility 1.11% Communication Services 0.85% Real Estate 0.73% Debt Sector Allocation
Sector Value Cash Equivalent 90.74% Corporate 9.26% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Cash Offset For Derivatives
Derivative Margin | -6,621% ₹192,988 Cr 19,298,831
↑ 19,115,129 Eq Hdfc Ltd.
Derivatives | -448% -₹13,058 Cr Eq Reliance Industries Ltd.
Derivatives | -435% -₹12,679 Cr Eq Infosys Ltd.
Derivatives | -381% -₹11,105 Cr Eq Larsen & Toubro Ltd.
Derivatives | -263% -₹7,666 Cr Eq Hindustan Unilever Ltd.
Derivatives | -262% -₹7,637 Cr Eq Bajaj Finance Ltd.
Derivatives | -257% -₹7,491 Cr Eq Indus Ind Bank Ltd.
Derivatives | -222% -₹6,471 Cr Eq Axis Bank Ltd.
Derivatives | -217% -₹6,325 Cr Eq Itc Ltd.
Derivatives | -217% -₹6,325 Cr 2. Edelweiss Arbitrage Fund
CAGR/Annualized return of 6.8% since its launch. Ranked 1 in Arbitrage category. Return for 2018 was 6.1% , 2017 was 5.8% and 2016 was 6.7% . Edelweiss Arbitrage Fund
Growth Launch Date 27 Jun 14 NAV (19 Nov 19) ₹14.2794 ↓ 0.00 (-0.02 %) Net Assets (Cr) ₹3,854 on 31 Oct 19 Category Hybrid - Arbitrage AMC Edelweiss Asset Management Limited Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 1.12 Sharpe Ratio 4.7 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.
Date Value 31 Oct 14 ₹10,000 31 Oct 15 ₹10,822 31 Oct 16 ₹11,539 31 Oct 17 ₹12,227 31 Oct 18 ₹12,996 31 Oct 19 ₹13,822 Returns for Edelweiss Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Nov 19 Duration Returns 1 Month 0.3% 3 Month 1.3% 6 Month 3.1% 1 Year 6.3% 3 Year 6.1% 5 Year 6.7% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.1% 2017 5.8% 2016 6.7% 2015 8% 2014 2013 2012 2011 2010 2009 Fund Manager information for Edelweiss Arbitrage Fund
Name Since Tenure Dhawal Dalal 22 Dec 16 2.77 Yr. Bhavesh Jain 27 Jun 14 5.26 Yr. Data below for Edelweiss Arbitrage Fund as on 31 Oct 19
Asset Allocation
Asset Class Value Cash 97.8% Debt 2.51% Equity Sector Allocation
Sector Value Financial Services 20.41% Technology 10.5% Energy 10.39% Basic Materials 6.05% Health Care 4.78% Consumer Defensive 3.96% Consumer Cyclical 3.5% Industrials 3.02% Utility 2.26% Real Estate 1.57% Communication Services 1.05% Debt Sector Allocation
Sector Value Cash Equivalent 83.44% Corporate 15.23% Government 1.64% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Cash Offset For Derivatives
Derivative Margin | -68% ₹2,614 Cr 261,384
↑ 9,838 Reliance Industries Ltd.31/10/2019
Derivatives | -9% -₹358 Cr 2,674,500
↑ 2,674,500 Reliance Industries Ltd (Energy)
Equity, Since 30 Apr 18 | RELIANCE9% ₹356 Cr 2,674,500
↑ 54,000 Housing Development Finance Corporation Ltd.31/10/2019
Derivatives | -9% -₹331 Cr 1,659,000
↑ 1,659,000 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Aug 18 | HDFC9% ₹328 Cr 1,659,000
↑ 502,500 Infosys Ltd (Technology)
Equity, Since 31 Aug 19 | INFY5% ₹187 Cr 2,318,400
↑ 1,916,400 Infosys Ltd.31/10/2019
Derivatives | -5% -₹185 Cr 2,318,400
↑ 2,318,400 RELIANCE JIO INFOCOMM LIMITED
Commercial Paper | -4% ₹150 Cr 15,000,000
↑ 15,000,000 Tata Consultancy Services Ltd.31/10/2019
Derivatives | -4% -₹149 Cr 709,000
↑ 709,000 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Oct 18 | TCS4% ₹149 Cr 709,000
↑ 387,250 3. IDFC Arbitrage Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 17 in Arbitrage category. Return for 2018 was 6.3% , 2017 was 5.5% and 2016 was 6.3% . IDFC Arbitrage Fund
Growth Launch Date 21 Dec 06 NAV (19 Nov 19) ₹24.2377 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹10,891 on 31 Oct 19 Category Hybrid - Arbitrage AMC IDFC Asset Management Company Limited Rating ☆ Risk Moderately Low Expense Ratio 1.04 Sharpe Ratio 5.08 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 1,000 Exit Load 0-1 Months (0.25%),1 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Oct 14 ₹10,000 31 Oct 15 ₹10,755 31 Oct 16 ₹11,427 31 Oct 17 ₹12,077 31 Oct 18 ₹12,844 31 Oct 19 ₹13,668 Returns for IDFC Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Nov 19 Duration Returns 1 Month 0.4% 3 Month 1.2% 6 Month 3% 1 Year 6.3% 3 Year 6% 5 Year 6.4% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.3% 2017 5.5% 2016 6.3% 2015 7.4% 2014 8.5% 2013 9.2% 2012 9.3% 2011 7.9% 2010 5.6% 2009 3.3% Fund Manager information for IDFC Arbitrage Fund
Name Since Tenure Arpit Kapoor 1 Mar 17 2.25 Yr. Yogik Pitti 27 Jun 13 5.93 Yr. Harshal Joshi 20 Oct 16 2.61 Yr. Data below for IDFC Arbitrage Fund as on 31 Oct 19
Asset Allocation
Asset Class Value Cash 89.54% Debt 10.63% Equity Sector Allocation
Sector Value Financial Services 22.36% Energy 6.64% Basic Materials 6.35% Technology 6.13% Consumer Defensive 4.84% Industrials 3.62% Consumer Cyclical 2.92% Utility 2.62% Health Care 2.48% Real Estate 0.6% Communication Services 0.39% Debt Sector Allocation
Sector Value Cash Equivalent 86.77% Corporate 11.79% Government 1.78% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Cash Offset For Derivatives
Derivative Margin | -67% ₹6,801 Cr 680,101
↑ 68,495 Axis Bank Limited
Certificate of Deposit | -7% ₹690 Cr Hdfc Bank Limited
Certificate of Deposit | -5% ₹553 Cr Itc Limited October 2019 Future
Derivatives | -5% -₹505 Cr 19,392,000
↑ 19,392,000 ITC Ltd (Consumer Defensive)
Equity, Since 30 Sep 17 | ITC5% ₹504 Cr 19,392,000
↑ 4,953,600 Housing Development Finance Corporation Limited October 2019 Future
Derivatives | -4% -₹431 Cr 2,160,500
↑ 2,160,500 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Jan 18 | HDFC4% ₹427 Cr 2,160,500
↑ 1,070,500 Reliance Industries Limited October 2019 Future
Derivatives | -4% -₹423 Cr 3,162,500
↑ 3,162,500 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 18 | RELIANCE4% ₹421 Cr 3,162,500
↑ 453,000 Icici Bank Limited
Certificate of Deposit | -3% ₹274 Cr 4. Reliance Arbitrage Fund
CAGR/Annualized return of 7.7% since its launch. Ranked 3 in Arbitrage category. Return for 2018 was 6.8% , 2017 was 5.5% and 2016 was 6.6% . Reliance Arbitrage Fund
Growth Launch Date 14 Oct 10 NAV (19 Nov 19) ₹19.713 ↓ 0.00 (-0.01 %) Net Assets (Cr) ₹9,497 on 31 Oct 19 Category Hybrid - Arbitrage AMC Reliance Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 1.05 Sharpe Ratio 4.46 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.
Date Value 31 Oct 14 ₹10,000 31 Oct 15 ₹10,856 31 Oct 16 ₹11,545 31 Oct 17 ₹12,212 31 Oct 18 ₹13,053 31 Oct 19 ₹13,880 Returns for Reliance Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Nov 19 Duration Returns 1 Month 0.3% 3 Month 1.2% 6 Month 3% 1 Year 6.3% 3 Year 6.2% 5 Year 6.7% 10 Year 15 Year Since launch 7.7% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.8% 2017 5.5% 2016 6.6% 2015 8.1% 2014 8% 2013 9.7% 2012 9.9% 2011 8.3% 2010 2009 Fund Manager information for Reliance Arbitrage Fund
Name Since Tenure Kinjal Desai 25 May 18 1.35 Yr. Anand Gupta 12 Sep 18 1.05 Yr. Data below for Reliance Arbitrage Fund as on 31 Oct 19
Asset Allocation
Asset Class Value Cash 97.55% Debt 1.31% Other 1.49% Equity Sector Allocation
Sector Value Energy 0.32% Basic Materials 0.06% Debt Sector Allocation
Sector Value Cash Equivalent 92.7% Corporate 5.11% Government 1.05% Credit Quality
Rating Value AA 10.68% AAA 89.32% Top Securities Holdings / Portfolio
Name Holding Value Quantity Cash Offset For Derivatives
Derivative Margin | -68% ₹6,471 Cr 647,101
↓ -4,447 Hdfc Bank Limited
Certificate of Deposit | -12% ₹1,100 Cr Reliance Industries Limited_28/11/2019 (Energy)
Derivatives | RELIANCE6% -₹606 Cr 4,124,000
↑ 4,124,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Dec 17 | RELIANCE6% ₹604 Cr 4,124,000
↓ -1,485,500 Housing Development Finance Corporation Limited_28/11/2019 (Financial Services)
Derivatives | HDFC6% -₹568 Cr 2,658,500
↑ 2,658,500 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Jan 18 | HDFC6% ₹567 Cr 2,658,500
↓ -424,000 Net Current Assets
Net Current Assets | -5% ₹429 Cr Tata Consultancy Services Limited_28/11/2019 (Technology)
Derivatives | TCS4% -₹405 Cr 1,778,750
↑ 1,778,750 Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Sep 18 | TCS4% ₹404 Cr 1,778,750
↓ -561,750 Sun Pharmaceutical Industries Limited_28/11/2019 (Healthcare)
Derivatives | SUNPHARMA4% -₹403 Cr 9,282,900
↑ 9,282,900 5. Aditya Birla Sun Life Arbitrage Fund
CAGR/Annualized return of 6.8% since its launch. Ranked 7 in Arbitrage category. Return for 2018 was 6% , 2017 was 5.6% and 2016 was 6.5% . Aditya Birla Sun Life Arbitrage Fund
Growth Launch Date 24 Jul 09 NAV (19 Nov 19) ₹19.7139 ↓ 0.00 (-0.01 %) Net Assets (Cr) ₹5,150 on 31 Oct 19 Category Hybrid - Arbitrage AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 0.94 Sharpe Ratio 4.79 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load 0-30 Days (0.5%),30 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Oct 14 ₹10,000 31 Oct 15 ₹10,791 31 Oct 16 ₹11,467 31 Oct 17 ₹12,130 31 Oct 18 ₹12,877 31 Oct 19 ₹13,689 Returns for Aditya Birla Sun Life Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Nov 19 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 3.1% 1 Year 6.3% 3 Year 6% 5 Year 6.5% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2018 6% 2017 5.6% 2016 6.5% 2015 7.6% 2014 8.3% 2013 9.5% 2012 7.1% 2011 7.1% 2010 5.4% 2009 Fund Manager information for Aditya Birla Sun Life Arbitrage Fund
Name Since Tenure Lovelish Solanki 15 Dec 14 4.8 Yr. Data below for Aditya Birla Sun Life Arbitrage Fund as on 31 Oct 19
Asset Allocation
Asset Class Value Cash 97.64% Debt 2.71% Equity Sector Allocation
Sector Value Financial Services 20.67% Energy 11.52% Technology 7.01% Health Care 6.97% Basic Materials 5.88% Consumer Cyclical 5.16% Consumer Defensive 4.9% Utility 1.94% Communication Services 1.73% Industrials 1.49% Real Estate 0.7% Debt Sector Allocation
Sector Value Cash Equivalent 97.64% Corporate 2.71% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Cash Offset For Derivatives
Derivative Margin | -69% ₹3,215 Cr 321,527
↑ 41,569 Reliance_(31/10/2019)
Derivatives | -9% -₹417 Cr 3,118,000
↑ 3,118,000 Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 18 | RELIANCE9% ₹415 Cr 3,118,000
↑ 536,000 Clearing Corporation Of India Limited
CBLO | -8% ₹374 Cr Hdfc_(31/10/2019)
Derivatives | -8% -₹360 Cr 1,806,500
↑ 1,806,500 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Apr 18 | HDFC8% ₹357 Cr 1,806,500
↑ 402,500 Net Receivables / (Payables)
Net Current Assets | -4% -₹197 Cr Tata Capital Limited
Debentures | -4% ₹166 Cr 1,650 Tcs_(31/10/2019)
Derivatives | -3% -₹151 Cr 719,000
↑ 719,000 Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 19 | TCS3% ₹151 Cr 719,000
↑ 470,000 6. BNP Paribas Arbitrage Fund
CAGR/Annualized return of 6.4% since its launch. Return for 2018 was 6% , 2017 was 6.4% . BNP Paribas Arbitrage Fund
Growth Launch Date 28 Dec 16 NAV (19 Nov 19) ₹11.95 ↑ 0.00 (0.03 %) Net Assets (Cr) ₹662 on 31 Oct 19 Category Hybrid - Arbitrage AMC BNP Paribas Asset Mgmt India Pvt. Ltd Rating Risk Moderately High Expense Ratio 1.12 Sharpe Ratio 4.06 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.
Date Value 31 Oct 17 ₹10,539 31 Oct 18 ₹11,205 31 Oct 19 ₹11,906 Returns for BNP Paribas Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Nov 19 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 3% 1 Year 6.2% 3 Year 5 Year 10 Year 15 Year Since launch 6.4% Historical performance (Yearly) on absolute basis
Year Returns 2018 6% 2017 6.4% 2016 2015 2014 2013 2012 2011 2010 2009 Fund Manager information for BNP Paribas Arbitrage Fund
Name Since Tenure Karthikraj Lakshmanan 28 Dec 16 2.76 Yr. Mayank Prakash 28 Dec 16 2.76 Yr. Data below for BNP Paribas Arbitrage Fund as on 31 Oct 19
Asset Allocation
Asset Class Value Cash 100.37% Equity Sector Allocation
Sector Value Financial Services 21.27% Consumer Cyclical 10.48% Energy 7.5% Basic Materials 7.37% Technology 6.33% Consumer Defensive 4.96% Health Care 4.76% Industrials 3.55% Utility 1.14% Communication Services 0.3% Real Estate 0.29% Debt Sector Allocation
Sector Value Cash Equivalent 100.37% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Receivables / (Payables)
Net Current Assets | -75% ₹496 Cr 91 Days Deposit With Icici Bank Ltd
Net Current Assets | -9% ₹60 Cr 598,800,000
↑ 598,800,000 Treps
CBLO/Reverse Repo | -6% ₹37 Cr Reliance Industries Ltd Fut 28-Nov-19
Derivatives | -5% -₹36 Cr 246,000
↑ 246,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 18 | RELIANCE5% ₹36 Cr 246,000
↓ -198,500 91 Days Deposit With Hdfc Bank Ltd
Net Current Assets | -5% ₹32 Cr 315,000,000
↑ 315,000,000 Hdfc Ltd Fut 28-Nov-19
Derivatives | -4% -₹23 Cr 108,500
↑ 108,500 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Oct 18 | HDFC3% ₹23 Cr 108,500
↓ -48,500 Axis Bank Ltd Fut 28-Nov-19
Derivatives | -3% -₹20 Cr 274,800
↑ 274,800 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 19 | 5322153% ₹20 Cr 274,800
↑ 86,400 7. Kotak Equity Arbitrage Fund
CAGR/Annualized return of 7.4% since its launch. Ranked 2 in Arbitrage category. Return for 2018 was 6.3% , 2017 was 5.8% and 2016 was 6.7% . Kotak Equity Arbitrage Fund
Growth Launch Date 29 Sep 05 NAV (19 Nov 19) ₹27.4615 ↓ 0.00 (0.00 %) Net Assets (Cr) ₹16,198 on 31 Oct 19 Category Hybrid - Arbitrage AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.68 Sharpe Ratio 4.45 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.
Date Value 31 Oct 14 ₹10,000 31 Oct 15 ₹10,773 31 Oct 16 ₹11,478 31 Oct 17 ₹12,160 31 Oct 18 ₹12,947 31 Oct 19 ₹13,758 Returns for Kotak Equity Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Nov 19 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 3% 1 Year 6.2% 3 Year 6.1% 5 Year 6.6% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 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% 2009 5.2% Fund Manager information for Kotak Equity Arbitrage Fund
Name Since Tenure Hiten Shah 3 Oct 19 0 Yr. Rukun Tarachandani 9 May 19 0.4 Yr. Data below for Kotak Equity Arbitrage Fund as on 31 Oct 19
Asset Allocation
Asset Class Value Cash 97.64% Debt 2.69% Equity Sector Allocation
Sector Value Financial Services 19.32% Energy 9.17% Basic Materials 7.9% Technology 6.88% Consumer Defensive 6.8% Consumer Cyclical 4.26% Industrials 3.83% Health Care 3.71% Utility 2.93% Communication Services 0.98% Real Estate 0.45% Debt Sector Allocation
Sector Value Cash Equivalent 87.61% Corporate 10.96% Government 1.63% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Cash Offset For Derivatives
Derivative Margin | -66% ₹10,770 Cr 1,076,996
↑ 12,162 Hdfc Bank Ltd.
Certificate of Deposit | -11% ₹1,724 Cr Kotak Liquid Dir Gr
Investment Fund | -6% ₹951 Cr 2,422,409
↑ 1,135,299 Reliance Industries Ltd.-NOV2019
Derivatives | -5% -₹790 Cr 5,368,500
↑ 5,368,500 Reliance Industries Ltd (Energy)
Equity, Since 31 May 18 | RELIANCE5% ₹786 Cr 5,368,500
↓ -108,000 HDFC Ltd.-NOV2019
Derivatives | -5% -₹784 Cr 3,668,500
↑ 3,668,500 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Sep 17 | HDFC5% ₹782 Cr 3,668,500
↑ 24,500 Axis Bank Ltd.
Certificate of Deposit | -4% ₹646 Cr ITC Ltd.-NOV2019
Derivatives | -3% -₹517 Cr 19,992,000
↑ 19,992,000 ITC Ltd (Consumer Defensive)
Equity, Since 31 Jul 16 | ITC3% ₹515 Cr 19,992,000
↑ 3,144,000
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?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
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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