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7 Best Arbitrage Mutual Funds 2023
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.
Talk to our investment specialist
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. Arbitrage schemes are taxed similar to equity funds making it an attractive investment for people in higher tax brackets. For example, if you belong to a 30% tax bracket, investing in equity arbitrage funds can lower your tax rates to 10% for LTCG and 15% for STCG.
Top 7 Arbitrage Mutual Funds 2023 - 2024
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) SBI Arbitrage Opportunities Fund Growth ₹29.6417
↑ 0.02 ₹14,313 1.9 3.7 7 4.8 5 4.6 Invesco India Arbitrage Fund Growth ₹27.9703
↑ 0.01 ₹5,894 1.8 3.6 7 4.9 5.1 5.1 Kotak Equity Arbitrage Fund Growth ₹32.7596
↑ 0.01 ₹23,737 1.9 3.6 6.8 4.9 5.2 4.5 HDFC Arbitrage Fund Growth ₹26.862
↑ 0.02 ₹6,183 1.8 3.5 6.6 4.6 4.8 4.2 Edelweiss Arbitrage Fund Growth ₹16.9916
↑ 0.01 ₹5,881 1.8 3.5 6.6 4.7 5.2 4.4 ICICI Prudential Equity Arbitrage Fund Growth ₹30.0747
↑ 0.02 ₹11,822 1.8 3.5 6.6 4.7 5 4.2 IDFC Arbitrage Fund Growth ₹28.4935
↑ 0.02 ₹3,494 1.8 3.5 6.6 4.5 4.9 4.1 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
*Below is the list of Arbitrage funds sorted on last 1 year return and having AUM > 100 Crore.
To provide capital appreciation and regular income for unitholders by identifying profitable arbitrage opportunities between the spot and derivative market segments as also through investment of surplus cash in debt and money market instruments. SBI Arbitrage Opportunities Fund is a Hybrid - Arbitrage fund was launched on 3 Nov 06. It is a fund with Moderately Low risk and has given a Below is the key information for SBI Arbitrage Opportunities 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 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 "To generate income through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment and by deployment of surplus cash in debt securities and money market instruments." HDFC Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 23 Oct 07. It is a fund with Moderately Low risk and has given a Below is the key information for HDFC 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 Income Optimiser Plan under the scheme is to seek to generate low volatility returns by using arbitrage and other derivative strategies in equity markets and investments in short-term debt portfolio. ICICI Prudential Equity Arbitrage Fund is a Hybrid - Arbitrage fund was launched on 30 Dec 06. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Equity 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 1. SBI Arbitrage Opportunities Fund
CAGR/Annualized return of 6.7% since its launch. Ranked 15 in Arbitrage category. Return for 2022 was 4.6% , 2021 was 4% and 2020 was 3.5% . SBI Arbitrage Opportunities Fund
Growth Launch Date 3 Nov 06 NAV (22 Aug 23) ₹29.6417 ↑ 0.02 (0.06 %) Net Assets (Cr) ₹14,313 on 31 Jul 23 Category Hybrid - Arbitrage AMC SBI Funds Management Private Limited Rating ☆☆ Risk Moderately Low Expense Ratio 0.82 Sharpe Ratio 0.76 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 18 ₹10,000 31 Aug 19 ₹10,676 31 Aug 20 ₹11,094 31 Aug 21 ₹11,509 31 Aug 22 ₹11,951 31 Aug 23 ₹12,803 Returns for SBI Arbitrage Opportunities Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.7% 3 Month 1.9% 6 Month 3.7% 1 Year 7% 3 Year 4.8% 5 Year 5% 10 Year 15 Year Since launch 6.7% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.6% 2021 4% 2020 3.5% 2019 6% 2018 6.2% 2017 5.3% 2016 6.4% 2015 7.3% 2014 8.6% 2013 9% Fund Manager information for SBI Arbitrage Opportunities Fund
Name Since Tenure Neeraj Kumar 5 Oct 12 10.91 Yr. Arun R. 30 Jun 21 2.17 Yr. Data below for SBI Arbitrage Opportunities Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 96.5% Debt 3.98% Equity Sector Allocation
Sector Value Financial Services 26.71% Basic Materials 10.34% Energy 9.63% Industrials 7.25% Technology 4.45% Health Care 4.2% Consumer Cyclical 3.85% Consumer Defensive 3.43% Utility 2.89% Communication Services 2.7% Real Estate 0.4% Debt Sector Allocation
Sector Value Cash Equivalent 92.3% Government 4.98% Corporate 3.19% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Future on HDFC Bank Ltd
Derivatives | -8% -₹1,447 Cr 9,149,250
↑ 1,471,800 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | HDFCBANK8% ₹1,438 Cr 9,149,250
↑ 1,471,800 SBI Savings Dir Gr
Investment Fund | -7% ₹1,242 Cr 320,680,885
↑ 77,722,959 Future on Reliance Industries Ltd
Derivatives | -6% -₹1,131 Cr 4,670,500
↑ 2,404,000 Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 21 | RELIANCE6% ₹1,124 Cr 4,670,500
↑ 2,404,000 Future on ICICI Bank Ltd
Derivatives | -4% -₹679 Cr 7,032,200
↑ 7,032,200 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Jun 21 | ICICIBANK4% ₹674 Cr 7,032,200
↑ 1,131,900 Future on Kotak Mahindra Bank Ltd
Derivatives | -2% -₹412 Cr 2,326,400
↑ 1,806,400 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Aug 22 | KOTAKBANK2% ₹409 Cr 2,326,400
↑ 1,806,400 Tata Consultancy Services Ltd. 28-Sep-23
Derivatives | -2% -₹336 Cr 992,950
↑ 992,950 2. Invesco India Arbitrage Fund
CAGR/Annualized return of 6.5% since its launch. Ranked 9 in Arbitrage category. Return for 2022 was 5.1% , 2021 was 3.5% and 2020 was 4.3% . Invesco India Arbitrage Fund
Growth Launch Date 30 Apr 07 NAV (22 Aug 23) ₹27.9703 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹5,894 on 31 Jul 23 Category Hybrid - Arbitrage AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 1.05 Sharpe Ratio 0.86 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 18 ₹10,000 31 Aug 19 ₹10,633 31 Aug 20 ₹11,141 31 Aug 21 ₹11,558 31 Aug 22 ₹12,004 31 Aug 23 ₹12,859 Returns for Invesco India Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.7% 3 Month 1.8% 6 Month 3.6% 1 Year 7% 3 Year 4.9% 5 Year 5.1% 10 Year 15 Year Since launch 6.5% Historical performance (Yearly) on absolute basis
Year Returns 2022 5.1% 2021 3.5% 2020 4.3% 2019 5.9% 2018 5.9% 2017 5.5% 2016 6.5% 2015 7.6% 2014 8.3% 2013 7.9% Fund Manager information for Invesco India Arbitrage Fund
Name Since Tenure Deepak Gupta 11 Nov 21 1.81 Yr. Kuber Mannadi 1 Sep 22 1 Yr. Data below for Invesco India Arbitrage Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 94.45% Debt 5.93% Equity Sector Allocation
Sector Value Financial Services 20.15% Basic Materials 12.21% Energy 8.12% Industrials 6.71% Communication Services 4.79% Technology 1.83% Health Care 1.77% Consumer Cyclical 1.74% Consumer Defensive 1.31% Utility 1.24% Real Estate 0.49% Debt Sector Allocation
Sector Value Cash Equivalent 85.37% Corporate 9.34% Government 5.67% Credit Quality
Rating Value AA 41.89% AAA 58.11% Top Securities Holdings / Portfolio
Name Holding Value Quantity Invesco India Money Market Dir Gr
Investment Fund | -9% ₹631 Cr 2,291,386 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 23 | HDFCBANK7% ₹487 Cr 3,095,950
↑ 646,250 Invesco India Liquid Dir Gr
Investment Fund | -7% ₹479 Cr 1,506,394
↑ 314,623 Hdfc Bank Limited September 2023 Future
Derivatives | -7% -₹465 Cr 2,939,200
↑ 2,927,100 Reliance Industries Limited September 2023 Future
Derivatives | -5% -₹330 Cr 1,362,500
↑ 1,362,500 Reliance Industries Ltd (Energy)
Equity, Since 31 Dec 22 | RELIANCE5% ₹328 Cr 1,362,500
↑ 1,065,250 Future on Hindustan Aeronautics Ltd Ordinary Shares
Derivatives | -3% -₹203 Cr 517,500
↑ 305,100 Hindustan Aeronautics Ltd Ordinary Shares (Industrials)
Equity, Since 31 Jul 23 | HAL3% ₹202 Cr 517,500
↑ 305,100 Invesco India Corp Bond Dir Gr
Investment Fund | -2% ₹163 Cr 556,159 Future on Jindal Steel & Power Ltd Shs Dematerialised
Derivatives | -2% -₹150 Cr 2,172,500
↑ 2,172,500 3. Kotak Equity Arbitrage Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 2 in Arbitrage category. Return for 2022 was 4.5% , 2021 was 4% and 2020 was 4.3% . Kotak Equity Arbitrage Fund
Growth Launch Date 29 Sep 05 NAV (22 Aug 23) ₹32.7596 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹23,737 on 31 Jul 23 Category Hybrid - Arbitrage AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.63 Sharpe Ratio 0.24 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 18 ₹10,000 31 Aug 19 ₹10,679 31 Aug 20 ₹11,179 31 Aug 21 ₹11,646 31 Aug 22 ₹12,068 31 Aug 23 ₹12,902 Returns for Kotak Equity Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.7% 3 Month 1.9% 6 Month 3.6% 1 Year 6.8% 3 Year 4.9% 5 Year 5.2% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.5% 2021 4% 2020 4.3% 2019 6.1% 2018 6.3% 2017 5.8% 2016 6.7% 2015 7.5% 2014 9% 2013 9.2% Fund Manager information for Kotak Equity Arbitrage Fund
Name Since Tenure Hiten Shah 3 Oct 19 3.91 Yr. Data below for Kotak Equity Arbitrage Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 97.1% Debt 3.35% Equity Sector Allocation
Sector Value Debt Sector Allocation
Sector Value Cash Equivalent 88.04% Corporate 7.91% Government 4.54% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Kotak Money Market Dir Gr
Investment Fund | -12% ₹2,982 Cr 7,553,686 Kotak Savings Fund Dir Gr
Investment Fund | -7% ₹1,920 Cr 489,335,859
↑ 274,908,785 HDFC Bank Ltd.-SEP2023
Derivatives | -7% -₹1,861 Cr 11,765,050
↑ 11,765,050 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | HDFCBANK7% ₹1,849 Cr 11,765,050
↑ 915,750 RELIANCE INDUSTRIES LTD.-SEP2023
Derivatives | -5% -₹1,346 Cr 5,557,750
↑ 5,557,750 Reliance Industries Ltd (Energy)
Equity, Since 31 May 18 | RELIANCE5% ₹1,338 Cr 5,557,750
↑ 1,508,750 ICICI Bank Ltd.-SEP2023
Derivatives | -3% -₹744 Cr 7,698,600
↑ 7,698,600 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Dec 19 | ICICIBANK3% ₹738 Cr 7,698,600
↑ 2,548,700 Kotak Liquid Dir Gr
Investment Fund | -3% ₹707 Cr 1,510,222 Grasim Industries Ltd.-SEP2023
Derivatives | -2% -₹536 Cr 2,974,450
↑ 2,974,450 4. HDFC Arbitrage Fund
CAGR/Annualized return of 6.4% since its launch. Ranked 10 in Arbitrage category. Return for 2022 was 4.2% , 2021 was 3.6% and 2020 was 3.7% . HDFC Arbitrage Fund
Growth Launch Date 23 Oct 07 NAV (22 Aug 23) ₹26.862 ↑ 0.02 (0.07 %) Net Assets (Cr) ₹6,183 on 31 Jul 23 Category Hybrid - Arbitrage AMC HDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.86 Sharpe Ratio -0.18 Information Ratio 0 Alpha Ratio 0 Min Investment 100,000 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 18 ₹10,000 31 Aug 19 ₹10,633 31 Aug 20 ₹11,077 31 Aug 21 ₹11,521 31 Aug 22 ₹11,883 31 Aug 23 ₹12,679 Returns for HDFC Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.7% 3 Month 1.8% 6 Month 3.5% 1 Year 6.6% 3 Year 4.6% 5 Year 4.8% 10 Year 15 Year Since launch 6.4% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.2% 2021 3.6% 2020 3.7% 2019 6% 2018 5.7% 2017 5.3% 2016 6.6% 2015 7.6% 2014 7.9% 2013 8.3% Fund Manager information for HDFC Arbitrage Fund
Name Since Tenure Anil Bamboli 1 Feb 22 1.58 Yr. Arun Agarwal 24 Aug 20 3.02 Yr. Nirman Morakhia 15 Feb 23 0.54 Yr. Dhruv Muchhal 22 Jun 23 0.19 Yr. Data below for HDFC Arbitrage Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 98.7% Debt 1.75% Equity Sector Allocation
Sector Value Financial Services 23% Basic Materials 10.93% Energy 8.03% Communication Services 6.39% Health Care 6.31% Utility 5.32% Consumer Defensive 3.65% Consumer Cyclical 2.3% Technology 2.17% Industrials 1.77% Real Estate 1.44% Debt Sector Allocation
Sector Value Cash Equivalent 90.55% Government 5.81% Corporate 4.1% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Money Market Dir Gr
Investment Fund | -12% ₹804 Cr 1,584,542
↑ 128,182 Future on HDFC Bank Ltd
Derivatives | -9% -₹566 Cr HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 23 | HDFCBANK9% ₹563 Cr 3,579,950
↑ 1,085,700 HDFC Liquid Dir Gr
Investment Fund | -6% ₹392 Cr 860,651
↑ 77,007 Future on Reliance Industries Ltd
Derivatives | -4% -₹256 Cr Reliance Industries Ltd (Energy)
Equity, Since 31 Oct 21 | RELIANCE4% ₹254 Cr 1,057,000
↑ 935,000 Future on Zee Entertainment Enterprises Ltd
Derivatives | -3% -₹192 Cr Zee Entertainment Enterprises Ltd (Communication Services)
Equity, Since 30 Sep 20 | ZEEL3% ₹191 Cr 7,293,000
↑ 990,000 Future on ICICI Bank Ltd
Derivatives | -3% -₹184 Cr ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | ICICIBANK3% ₹183 Cr 1,908,200
↓ -706,300 5. Edelweiss Arbitrage Fund
CAGR/Annualized return of 6% since its launch. Ranked 1 in Arbitrage category. Return for 2022 was 4.4% , 2021 was 3.8% and 2020 was 4.5% . Edelweiss Arbitrage Fund
Growth Launch Date 27 Jun 14 NAV (22 Aug 23) ₹16.9916 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹5,881 on 31 Jul 23 Category Hybrid - Arbitrage AMC Edelweiss Asset Management Limited Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 1.08 Sharpe Ratio -0.26 Information Ratio -0.42 Alpha Ratio -0.26 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 18 ₹10,000 31 Aug 19 ₹10,673 31 Aug 20 ₹11,202 31 Aug 21 ₹11,645 31 Aug 22 ₹12,057 31 Aug 23 ₹12,868 Returns for Edelweiss Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.7% 3 Month 1.8% 6 Month 3.5% 1 Year 6.6% 3 Year 4.7% 5 Year 5.2% 10 Year 15 Year Since launch 6% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.4% 2021 3.8% 2020 4.5% 2019 6.2% 2018 6.1% 2017 5.8% 2016 6.7% 2015 8% 2014 2013 Fund Manager information for Edelweiss Arbitrage Fund
Name Since Tenure Dhawal Dalal 22 Dec 16 6.7 Yr. Bhavesh Jain 27 Jun 14 9.19 Yr. Bhavin Patadia 1 Mar 23 0.5 Yr. Data below for Edelweiss Arbitrage Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 91.95% Debt 8.48% Equity Sector Allocation
Sector Value Financial Services 26.36% Basic Materials 12.32% Energy 8.14% Communication Services 5.08% Health Care 4.34% Industrials 4.11% Technology 3.56% Consumer Cyclical 3.46% Utility 2.28% Consumer Defensive 1.48% Real Estate 0.69% Debt Sector Allocation
Sector Value Cash Equivalent 83.94% Government 9.95% Corporate 6.55% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Future on HDFC Bank Ltd
Derivatives | -8% -₹513 Cr 3,245,550
↑ 369,600 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 21 | HDFCBANK8% ₹510 Cr 3,245,550
↑ 369,600 Future on Reliance Industries Ltd
Derivatives | -4% -₹294 Cr 1,215,750
↑ 451,500 Reliance Industries Ltd (Energy)
Equity, Since 30 Apr 18 | RELIANCE4% ₹293 Cr 1,215,750
↑ 451,500 Future on Adani Enterprises Ltd
Derivatives | -2% -₹161 Cr 662,700
↑ 60,000 Adani Enterprises Ltd (Energy)
Equity, Since 30 Apr 23 | 5125992% ₹160 Cr 662,700
↑ 60,000 6.69% Govt Stock 2024
Sovereign Bonds | -2% ₹150 Cr 15,000,000 Future on Bank of Baroda
Derivatives | -2% -₹128 Cr 6,803,550
↑ 2,767,050 Bank of Baroda (Financial Services)
Equity, Since 30 Apr 23 | 5321342% ₹127 Cr 6,803,550
↑ 2,767,050 364 DTB 29022024
Sovereign Bonds | -2% ₹121 Cr 12,500,000
↑ 7,500,000 6. ICICI Prudential Equity Arbitrage Fund
CAGR/Annualized return of 6.8% since its launch. Ranked 4 in Arbitrage category. Return for 2022 was 4.2% , 2021 was 3.9% and 2020 was 4.3% . ICICI Prudential Equity Arbitrage Fund
Growth Launch Date 30 Dec 06 NAV (22 Aug 23) ₹30.0747 ↑ 0.02 (0.06 %) Net Assets (Cr) ₹11,822 on 31 Jul 23 Category Hybrid - Arbitrage AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.97 Sharpe Ratio -0.27 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 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 Aug 18 ₹10,000 31 Aug 19 ₹10,668 31 Aug 20 ₹11,153 31 Aug 21 ₹11,612 31 Aug 22 ₹12,000 31 Aug 23 ₹12,803 Returns for ICICI Prudential Equity Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.7% 3 Month 1.8% 6 Month 3.5% 1 Year 6.6% 3 Year 4.7% 5 Year 5% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.2% 2021 3.9% 2020 4.3% 2019 5.9% 2018 6.2% 2017 5.5% 2016 6.8% 2015 7.6% 2014 8.6% 2013 9.8% Fund Manager information for ICICI Prudential Equity Arbitrage Fund
Name Since Tenure Kayzad Eghlim 1 Feb 11 12.59 Yr. Rohan Maru 29 Dec 20 2.67 Yr. Nikhil Kabra 29 Dec 20 2.67 Yr. Sharmila D’mello 31 Jul 22 1.09 Yr. Data below for ICICI Prudential Equity Arbitrage Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 96.93% Debt 3.52% Equity Sector Allocation
Sector Value Financial Services 20.63% Basic Materials 12.2% Health Care 6.42% Energy 5.94% Consumer Cyclical 5.92% Consumer Defensive 4.92% Industrials 4.31% Communication Services 4.25% Utility 3.63% Technology 3.22% Real Estate 0.83% Debt Sector Allocation
Sector Value Cash Equivalent 87.61% Government 7.2% Corporate 5.64% Securitized 0% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Pru Savings Dir Gr
Investment Fund | -6% ₹788 Cr 16,474,508 Future on HDFC Bank Ltd
Derivatives | -6% -₹693 Cr 4,379,650
↑ 1,119,800 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Nov 21 | HDFCBANK6% ₹688 Cr 4,379,650
↑ 1,119,800 Future on ICICI Bank Ltd
Derivatives | -3% -₹386 Cr 3,997,700
↑ 91,700 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 19 | ICICIBANK3% ₹383 Cr 3,997,700
↑ 91,700 Future on Sun Pharmaceuticals Industries Ltd
Derivatives | -3% -₹376 Cr 3,368,400
↓ -439,600 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 30 Apr 15 | SUNPHARMA3% ₹374 Cr 3,368,400
↓ -439,600 Future on Reliance Industries Ltd
Derivatives | -3% -₹342 Cr 1,412,500
↑ 437,250 Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 18 | RELIANCE3% ₹340 Cr 1,412,500
↑ 437,250 182 DTB 22092023
Sovereign Bonds | -2% ₹299 Cr 30,000,000 7. IDFC Arbitrage Fund
CAGR/Annualized return of 6.5% since its launch. Ranked 17 in Arbitrage category. Return for 2022 was 4.1% , 2021 was 3.5% and 2020 was 3.8% . IDFC Arbitrage Fund
Growth Launch Date 21 Dec 06 NAV (22 Aug 23) ₹28.4935 ↑ 0.02 (0.06 %) Net Assets (Cr) ₹3,494 on 31 Jul 23 Category Hybrid - Arbitrage AMC IDFC Asset Management Company Limited Rating ☆ Risk Moderately Low Expense Ratio 1.05 Sharpe Ratio -0.16 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 Aug 18 ₹10,000 31 Aug 19 ₹10,695 31 Aug 20 ₹11,139 31 Aug 21 ₹11,565 31 Aug 22 ₹11,930 31 Aug 23 ₹12,725 Returns for IDFC Arbitrage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.5% 1 Year 6.6% 3 Year 4.5% 5 Year 4.9% 10 Year 15 Year Since launch 6.5% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.1% 2021 3.5% 2020 3.8% 2019 6.2% 2018 6.3% 2017 5.5% 2016 6.3% 2015 7.4% 2014 8.5% 2013 9.2% Fund Manager information for IDFC Arbitrage Fund
Name Since Tenure Harshal Joshi 20 Oct 16 6.87 Yr. Nemish Sheth 26 Nov 21 1.76 Yr. Nishita Shah 31 Jul 23 0.09 Yr. Data below for IDFC Arbitrage Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 91.07% Debt 9.36% Equity Sector Allocation
Sector Value Financial Services 21.27% Basic Materials 11.94% Health Care 7.66% Energy 6.02% Communication Services 4.26% Consumer Defensive 4.23% Consumer Cyclical 4.04% Industrials 4.02% Technology 2.9% Utility 2.47% Real Estate 1.65% Debt Sector Allocation
Sector Value Cash Equivalent 87.1% Government 8.56% Corporate 4.33% Securitized 0.45% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Bandhan Liquid Dir Gr
Investment Fund | -9% ₹337 Cr 1,204,888
↑ 287,276 Hdfc Bank Limited September 2023 Future
Derivatives | -4% -₹141 Cr 893,750
↑ 893,750 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 22 | HDFCBANK4% ₹140 Cr 893,750
↑ 365,750 Reliance Industries Limited September 2023 Future
Derivatives | -3% -₹126 Cr 522,000
↑ 522,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 18 | RELIANCE3% ₹126 Cr 522,000
↑ 62,500 Future on Grasim Industries Ltd
Derivatives | -3% -₹107 Cr 592,325
↑ 197,125 Grasim Industries Ltd (Basic Materials)
Equity, Since 31 May 17 | GRASIM3% ₹106 Cr 592,325
↑ 197,125 Future on Sun Pharmaceuticals Industries Ltd
Derivatives | -3% -₹102 Cr 915,600
↓ -62,300 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 31 May 22 | SUNPHARMA3% ₹102 Cr 915,600
↓ -62,300 7.68% Govt Stock 2023
Sovereign Bonds | -2% ₹75 Cr 7,500,000
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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