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7 Best Arbitrage Mutual Funds 2020
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 2020 - 2021
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2019 (%) L&T Arbitrage Opportunities Fund Growth ₹14.726
↑ 0.01 ₹1,179 1.1 2.6 5.5 5.8 6 6 BNP Paribas Arbitrage Fund Growth ₹12.447
↑ 0.01 ₹631 0.8 2.2 5.2 5.9 6.2 Edelweiss Arbitrage Fund Growth ₹14.8729
↑ 0.01 ₹3,501 0.8 2.3 5.1 5.9 6 6.2 UTI Arbitrage Fund Growth ₹26.9204
↑ 0.02 ₹2,998 0.9 2.6 5 5.8 5.9 6.2 Invesco India Arbitrage Fund Growth ₹24.3666
↑ 0.02 ₹551 0.8 2.5 5 5.6 5.8 5.9 Nippon India Arbitrage Fund Growth ₹20.4897
↑ 0.02 ₹7,384 0.8 2.6 4.9 6 6 6.2 Kotak Equity Arbitrage Fund Growth ₹28.5452
↑ 0.02 ₹15,000 0.8 2.4 4.9 5.8 6 6.1 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.
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 Below is the key information for L&T Arbitrage Opportunities 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 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 (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 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 Below is the key information for Invesco India 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. 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 Below is the key information for Nippon India 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. L&T Arbitrage Opportunities Fund
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% . 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.
Date Value 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 Returns for L&T Arbitrage Opportunities Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20 Duration Returns 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
Year Returns 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
Name Since Tenure Venugopal Manghat 30 Jun 14 6.18 Yr. Jalpan Shah 24 Jan 19 1.61 Yr. Praveen Ayathan 30 Jun 14 6.18 Yr. Alok Ranjan 1 Oct 19 0.92 Yr. Data below for L&T Arbitrage Opportunities Fund as on 31 Aug 20
Asset Allocation
Asset Class Value Cash 100.2% Equity Sector Allocation
Sector Value Financial Services 21.25% Basic Materials 8.67% Energy 7.57% Health Care 6.35% Communication Services 5.29% Consumer Defensive 4.56% Utility 4.35% Industrials 3.97% Consumer Cyclical 3.26% Technology 1.76% Real Estate 0.29% Debt Sector Allocation
Sector Value Cash Equivalent 99.7% Corporate 0.34% Government 0.16% Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity L&T Liquid Dir Gr
Investment Fund | -6% ₹70 Cr 253
↑ 253 Future on Bharti Airtel Ltd
Derivatives | -5% -₹58 Cr 1,121,706
↑ 1,119,855 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Jul 20 | BHARTIARTL5% ₹58 Cr 1,121,706
↑ 1,119,855 Future on Housing Development Finance Corp Ltd
Derivatives | -4% -₹52 Cr 283,200
↑ 206,700 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Aug 18 | HDFC4% ₹52 Cr 283,200
↑ 206,700 Future on Reliance Industries Ltd
Derivatives | -3% -₹40 Cr 190,385
↑ 150,490 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 20 | RELIANCE3% ₹40 Cr 190,385
↑ 150,490 Future on ICICI Bank Ltd
Derivatives | -3% -₹37 Cr 932,250
↑ 11,000 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Dec 19 | ICICIBANK3% ₹37 Cr 932,250
↑ 11,000 Future on Tata Power Co Ltd
Derivatives | -3% -₹34 Cr 5,683,500
↑ 5,238,000 2. BNP Paribas Arbitrage Fund
CAGR/Annualized return of 6% since its launch. Return for 2019 was 6.2% , 2018 was 6% and 2017 was 6.4% . 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 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.
Date Value 31 Aug 17 ₹10,446 31 Aug 18 ₹11,064 31 Aug 19 ₹11,785 31 Aug 20 ₹12,372 Returns for BNP Paribas Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20 Duration Returns 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
Year Returns 2019 6.2% 2018 6% 2017 6.4% 2016 2015 2014 2013 2012 2011 2010 Fund Manager information for BNP Paribas Arbitrage Fund
Name Since Tenure Karthikraj Lakshmanan 28 Dec 16 3.68 Yr. Mayank Prakash 28 Dec 16 3.68 Yr. Chockalingam Narayanan 1 Jul 20 0.17 Yr. Data below for BNP Paribas Arbitrage Fund as on 31 Aug 20
Asset Allocation
Asset Class Value Cash 100.24% Equity Sector Allocation
Sector Value Financial Services 16.89% Health Care 10.72% Consumer Defensive 9.59% Energy 9.14% Basic Materials 4.89% Communication Services 4.72% Technology 4.31% Utility 3.34% Real Estate 1.61% Industrials 0.77% Consumer Cyclical 0.68% Debt Sector Allocation
Sector Value Cash Equivalent 100.24% Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity Future on Hindustan Unilever Ltd
Derivatives | -4% -₹28 Cr 130,800 Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Apr 20 | 5006964% ₹28 Cr 130,800 Future on HDFC Bank Ltd
Derivatives | -4% -₹26 Cr 139,200
↑ 119,100 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 20 | HDFC4% ₹26 Cr 139,200
↑ 119,100 Future on Reliance Industries Ltd
Derivatives | -4% -₹24 Cr 114,130
↑ 114,130 Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 20 | RELIANCE4% ₹24 Cr 114,130
↑ 114,130 Future on Divi's Laboratories Ltd
Derivatives | -4% -₹23 Cr 73,200
↓ -28,400 Divi's Laboratories Ltd (Healthcare)
Equity, Since 29 Feb 20 | DIVISLAB4% ₹23 Cr 73,200
↓ -28,400 Hpcl Fut 24-Sep-20
Derivatives | -4% -₹22 Cr 1,098,900
↑ 1,098,900 Hindustan Petroleum Corp Ltd (Energy)
Equity, Since 30 Jun 20 | HINDPETRO4% ₹22 Cr 1,098,900
↑ 151,200 3. Edelweiss Arbitrage Fund
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% . 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.
Date Value 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 Returns for Edelweiss Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20 Duration Returns 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
Year Returns 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
Name Since Tenure Dhawal Dalal 22 Dec 16 3.7 Yr. Bhavesh Jain 27 Jun 14 6.19 Yr. Data below for Edelweiss Arbitrage Fund as on 31 Aug 20
Asset Allocation
Asset Class Value Cash 89.31% Equity 1.05% Debt 9.64% Equity Sector Allocation
Sector Value Financial Services 14.57% Basic Materials 9.64% Health Care 9.05% Energy 8.22% Consumer Defensive 7.21% Industrials 5.37% Consumer Cyclical 4.42% Technology 4.23% Communication Services 3.12% Utility 1.89% Real Estate 0.2% Debt Sector Allocation
Sector Value Cash Equivalent 87.2% Corporate 6.1% Government 5.65% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Future on Reliance Industries Ltd
Derivatives | -6% -₹210 Cr 1,006,465
↑ 1,006,465 Reliance Industries Ltd (Energy)
Equity, Since 30 Apr 18 | RELIANCE6% ₹209 Cr 1,006,465
↑ 479,750 Future on Housing Development Finance Corp Ltd
Derivatives | -5% -₹175 Cr 948,900
↑ 108,600 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Aug 18 | HDFC5% ₹174 Cr 948,900
↑ 108,600 Future on ICICI Bank Ltd
Derivatives | -3% -₹99 Cr 2,503,875
↓ -2,534,125 182 DTB 31122020
Sovereign Bonds | -3% ₹99 Cr 10,000,000
↑ 10,000,000 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 20 | ICICIBANK3% ₹99 Cr 2,503,875
↓ -2,534,125 Future on Adani Ports & Special Economic Zone Ltd
Derivatives | -3% -₹98 Cr 2,735,000
↓ -5,000 Adani Ports & Special Economic Zone Ltd (Industrials)
Equity, Since 30 Sep 19 | 5329213% ₹97 Cr 2,735,000
↓ -5,000 Future on Hindustan Unilever Ltd
Derivatives | -2% -₹79 Cr 370,200
↓ -113,400 4. UTI Arbitrage Fund
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% . 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.
Date Value 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 Returns for UTI Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20 Duration Returns 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
Year Returns 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
Name Since Tenure Amit Sharma 2 Jul 18 2.17 Yr. Rajeev Gupta 2 Jul 18 2.17 Yr. Data below for UTI Arbitrage Fund as on 31 Aug 20
Asset Allocation
Asset Class Value Cash 90.97% Debt 9.05% Equity Sector Allocation
Sector Value Financial Services 18.6% Energy 10.85% Health Care 8.32% Consumer Defensive 7.41% Basic Materials 7.16% Communication Services 5.62% Consumer Cyclical 3.45% Technology 3.31% Industrials 2.34% Utility 0.78% Real Estate 0.06% Debt Sector Allocation
Sector Value Cash Equivalent 90.16% Corporate 9.05% Government 0.8% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Future on Reliance Industries Ltd
Derivatives | -8% -₹225 Cr Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 18 | RELIANCE8% ₹225 Cr 1,082,720
↑ 232,300 Future on ICICI Bank Ltd
Derivatives | -5% -₹156 Cr ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 20 | ICICIBANK5% ₹156 Cr 3,955,875
↓ -429,000 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Sep 18 | HDFC4% ₹133 Cr 728,400
↑ 245,400 Future on HDFC Bank Ltd
Derivatives | -4% -₹133 Cr Kotak Mahindra Prime Limited
Debentures | -4% ₹124 Cr 1,000 Future on IndusInd Bank Ltd
Derivatives | -4% -₹117 Cr IndusInd Bank Ltd (Financial Services)
Equity, Since 31 Jul 19 | INDUSINDBK4% ₹117 Cr 1,848,800
↓ -38,400 Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Sep 18 | 5006963% ₹104 Cr 489,000
↓ -117,600 5. Invesco India Arbitrage Fund
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% . 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.
Date Value 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 Returns for Invesco India Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20 Duration Returns 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
Year Returns 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
Name Since Tenure Rajeev Bhardwaj 19 May 20 0.29 Yr. Data below for Invesco India Arbitrage Fund as on 31 Aug 20
Asset Allocation
Asset Class Value Cash 96.52% Debt 3.72% Equity Sector Allocation
Sector Value Financial Services 12.47% Technology 11.93% Consumer Defensive 11.43% Health Care 10.22% Energy 9.29% Basic Materials 5.56% Communication Services 4.05% Industrials 1.05% Consumer Cyclical 0.46% Real Estate 0.04% Debt Sector Allocation
Sector Value Cash Equivalent 96.52% Corporate 1.9% Government 1.82% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Future on Reliance Industries Ltd
Derivatives | -7% -₹41 Cr 197,455
↑ 34,845 Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 20 | RELIANCE7% ₹41 Cr 197,455
↑ 34,845 Future on Housing Development Finance Corp Ltd
Derivatives | -7% -₹39 Cr 213,600 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 19 | HDFC7% ₹39 Cr 213,600 Future on Infosystems SA
Derivatives | -7% -₹36 Cr 387,600
↑ 387,600 Infosys Ltd (Technology)
Equity, Since 31 Jul 19 | INFY7% ₹36 Cr 387,600
↑ 265,200 Future on Tata Consultancy Services Ltd
Derivatives | -5% -₹28 Cr 123,600
↑ 66,900 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Jul 20 | TCS5% ₹28 Cr 123,600
↑ 66,900 Future on Dr Reddy's Laboratories Ltd
Derivatives | -5% -₹28 Cr 64,750
↑ 64,750 Dr Reddy's Laboratories Ltd (Healthcare)
Equity, Since 31 Mar 20 | 5001245% ₹28 Cr 64,750
↑ 250 6. Nippon India Arbitrage Fund
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% . 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.
Date Value 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 Returns for Nippon India Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20 Duration Returns 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
Year Returns 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
Name Since Tenure Anju Chhajer 1 Feb 20 0.58 Yr. Kinjal Desai 25 May 18 2.27 Yr. Anand Gupta 12 Sep 18 1.97 Yr. Data below for Nippon India Arbitrage Fund as on 31 Aug 20
Asset Allocation
Asset Class Value Cash 92.81% Debt 7.43% Equity Sector Allocation
Sector Value Financial Services 19.31% Energy 10.09% Health Care 8.35% Basic Materials 7.46% Communication Services 5.93% Consumer Defensive 4.63% Technology 4.39% Consumer Cyclical 2.79% Industrials 1.68% Utility 1.03% Real Estate 0.24% Debt Sector Allocation
Sector Value Cash Equivalent 89.31% Corporate 8.21% Government 2.72% Credit Quality
Rating Value AA 16.86% AAA 83.14% Top Securities Holdings / Portfolio
Name Holding Value Quantity Nippon India Money Market Dir Gr
Investment Fund | -6% ₹462 Cr 1,468,876 Future on Reliance Industries Ltd
Derivatives | -6% -₹461 Cr 2,208,365
↑ 805,980 Reliance Industries Ltd (Energy)
Equity, Since 31 Dec 17 | RELIANCE6% ₹459 Cr 2,208,365
↑ 805,980 Future on Bharti Airtel Ltd
Derivatives | -5% -₹398 Cr 7,709,415
↓ -18,510 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Aug 17 | BHARTIARTL5% ₹396 Cr 7,709,415
↓ -18,510 Future on ICICI Bank Ltd
Derivatives | -5% -₹388 Cr 9,816,125
↓ -2,635,875 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 20 | ICICIBANK5% ₹387 Cr 9,816,125
↓ -2,635,875 Future on Housing Development Finance Corp Ltd
Derivatives | -5% -₹370 Cr 2,012,400
↓ -59,400 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Jan 18 | HDFC5% ₹369 Cr 2,012,400
↓ -59,400 Nippon India Liquid Dir Gr
Investment Fund | -4% ₹324 Cr 655,857 7. Kotak Equity Arbitrage Fund
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% . 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.
Date Value 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 Returns for Kotak Equity Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Sep 20 Duration Returns 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
Year Returns 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
Name Since Tenure Hiten Shah 3 Oct 19 0.92 Yr. Data below for Kotak Equity Arbitrage Fund as on 31 Aug 20
Asset Allocation
Asset Class Value Cash 100.24% Equity Sector Allocation
Sector Value Financial Services 16.62% Energy 8.02% Consumer Defensive 7.91% Basic Materials 7.17% Technology 7.03% Health Care 6.65% Communication Services 4.67% Consumer Cyclical 4.04% Industrials 3.05% Utility 1.93% Real Estate 0.44% Debt Sector Allocation
Sector Value Cash Equivalent 98.49% Corporate 1.58% Government 0.17% Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity Kotak Liquid Dir Gr
Investment Fund | -9% ₹1,383 Cr 3,386,942
↑ 2,451 Reliance Industries Ltd.-SEP2020
Derivatives | -5% -₹796 Cr 3,812,750
↑ 3,812,750 Reliance Industries Ltd (Energy)
Equity, Since 31 May 18 | RELIANCE5% ₹793 Cr 3,812,750
↑ 645,895 HDFC Ltd.-SEP2020
Derivatives | -5% -₹754 Cr 4,096,200
↑ 4,096,200 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Sep 17 | HDFC5% ₹751 Cr 4,096,200
↓ -895,200 Infosys Ltd.-SEP2020
Derivatives | -3% -₹502 Cr 5,385,600
↑ 5,385,600 Infosys Ltd (Technology)
Equity, Since 31 Jul 18 | INFY3% ₹500 Cr 5,385,600
↑ 2,036,400 Bharti Airtel Ltd.-SEP2020
Derivatives | -3% -₹460 Cr 8,914,416
↑ 8,914,416 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 May 19 | BHARTIARTL3% ₹457 Cr 8,914,416
↓ -440,538 ICICI Bank Ltd.-SEP2020
Derivatives | -3% -₹406 Cr 10,254,750
↑ 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?
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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