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Fincash » Kotak Equity Arbitrage Fund Vs Nippon India Arbitrage Fund

Kotak Equity Arbitrage Fund Vs Nippon India Arbitrage Fund

Updated on July 14, 2024 , 1203 views

Kotak Equity Arbitrage Fund and Nippon India Arbitrage Fund (Formerly Reliance Arbitrage Fund) both belong to the arbitrage category of Hybrid Fund. Arbitrage funds are a type of Mutual Funds that leverage on the price differences of different markets to earn profits. Arbitrage Funds are named after the arbitrage strategy that they use. The returns of these funds are dependent on the Volatility of the invested asset on the Market. They make use of the market inefficiencies to generate returns for their investors. Though both Kotak Equity Arbitrage Fund Vs Nippon India Arbitrage Fund belong to the same category there differ in some parameters like AUM, NAV, performances, etc. So, to make a better investment decision, let's have a look at both the schemes in a detailed manner.

Kotak Equity Arbitrage Fund

Kotak Equity Arbitrage Fund was launched in the year 2005 with an aim to generate Capital appreciation by Investing in a derivative segment of the equity market and seek Income by investing in arbitrage opportunities in the cash. A portion of the Portfolio is invested in debt and money market instruments. Some of the top holdings of the fund (as on 30th June 2018) are Net Current Assets, Kotak Liquid Dir Gr, HDFC Bank Ltd, Axis Bank Ltd, Tata Steel Ltd, etc. Kotak Equity Arbitrage Fund is been currently managed by Deepak Gupta.

Nippon India Arbitrage Fund (Formerly Reliance Arbitrage Fund)

Important Information

From October 2019, Reliance Mutual Fund has been renamed as Nippon India Mutual Fund. Nippon Life has acquired majority (75%) stakes in Reliance Nippon Asset Management (RNAM). The company will continue to run its operations without any change in structure and management.

Nippon India Arbitrage Fund, earlier known as Reliance Arbitrage Fund was launched in the year 2010. The fund seeks to generate income by taking advantage of the arbitrage opportunities that potentially exists between cash and derivative market. As the fund also invests in debt and money market securities, it profits from regular income. Some of the top holdings of Reliance/Nippon India Arbitrage Fund as on 30th June 2018 are Cash Offset For Derivatives, HDFC Bank Ltd, Housing Development Finance Corp Ltd, Axis Bank Ltd, ICICI Bank Ltd. etc. The fund is currently managed jointly by Payal Kaipunjal and Kinjal Desai.

Kotak Equity Arbitrage Fund Vs Nippon India Arbitrage Fund

Though both Kotak Equity Arbitrage Fund Vs Reliance/Nippon India Arbitrage Fund belong to the arbitrage category of hybrid funds, nevertheless; they differ on account of various parameters. So, let us understand the differences between both the schemes based on these parameters that are divided into four sections, namely, basics section, performance section, yearly performance section, and other details section.

Basics Section

Current NAV, Fincash Rating, and Scheme Category are some of the comparable elements that form part of the basics section. It is the first section in the comparison of both the schemes. The comparison of current NAV reveals that there is a drastic difference between the NAV of both the schemes. As on 31st Jul, 2018, the NAV of Kotak Equity Arbitrage Fund was INR 25.3528, while the NAV of Nippon India Arbitrage Fund was INR 18.1855. With respect to the Fincash Rating, it can be said that both the funds are rated as 4-Star. The summary comparison of the basics section is as shown in the table given below.

Parameters
BasicsNAV
Net Assets (Cr)
Launch Date
Rating
Category
Sub Cat.
Category Rank
Risk
Expense Ratio
Sharpe Ratio
Information Ratio
Alpha Ratio
Benchmark
Exit Load
Kotak Equity Arbitrage Fund
Growth
Fund Details
₹35.1212 ↑ 0.02   (0.06 %)
₹46,308 on 31 May 24
29 Sep 05
Hybrid
Arbitrage
2
Moderately Low
0.63
2.13
0
0
Not Available
0-30 Days (0.25%),30 Days and above(NIL)
Nippon India Arbitrage Fund
Growth
Fund Details
₹24.9495 ↑ 0.02   (0.08 %)
₹15,158 on 31 May 24
14 Oct 10
Hybrid
Arbitrage
3
Moderately Low
1.06
1.22
0
0
Not Available
0-1 Months (0.25%),1 Months and above(NIL)

Performance Section

This section compares the Compounded Annual Growth Rate or CAGR returns of both the schemes at various intervals. Some of the time intervals include 3 Month Return, 6 Month Return, 1 Year Return, and Return since Inception. The comparison of CAGR returns shows that both Kotak Equity Arbitrage Fund and Nippon India Arbitrage Fund has performed closely in many instance. The table given below shows the summary of performance section.

Parameters
Performance1 Month
3 Month
6 Month
1 Year
3 Year
5 Year
Since launch
Kotak Equity Arbitrage Fund
Growth
Fund Details
0.5%
1.8%
4%
8%
6%
5.4%
6.9%
Nippon India Arbitrage Fund
Growth
Fund Details
0.6%
1.8%
3.8%
7.7%
5.7%
5.2%
6.9%

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Yearly Performance Section

The comparison of absolute returns generated by both the schemes for a particular year is compared in the yearly performance section. It is the third section in the comparison of both the schemes.

Parameters
Yearly Performance2023
2022
2021
2020
2019
Kotak Equity Arbitrage Fund
Growth
Fund Details
7.4%
4.5%
4%
4.3%
6.1%
Nippon India Arbitrage Fund
Growth
Fund Details
7%
4.2%
3.8%
4.3%
6.2%

Other Details Section

It is the last section on the comparison of both the schemes that compares the elements like AUM, minimum SIP and lump sum investment and others. The comparison of AUM reveals that there is a significant difference in the AUM of both the schemes. As on 30th June 2018, the AUM of Kotak Equity Arbitrage Fund was INR 11,764 crore, while of Reliance Arbitrage Fund was INR 8,123 crores. Similarly, the minimum SIP investment for both the schemes is also different. The SIP amount for Nippon India Mutual Fund’s scheme is INR 100 and for Kotak Mutual Fund’s scheme is INR 500. However, the minimum lumpsum amount for both the schemes is the same, that is, INR 5,000. The table given below shows the comparison of other details section.

Parameters
Other DetailsMin SIP Investment
Min Investment
Fund Manager
Kotak Equity Arbitrage Fund
Growth
Fund Details
₹500
₹5,000
Hiten Shah - 4.67 Yr.
Nippon India Arbitrage Fund
Growth
Fund Details
₹100
₹5,000
Anju Chhajer - 4.33 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
Kotak Equity Arbitrage Fund
Growth
Fund Details
DateValue
30 Jun 19₹10,000
30 Jun 20₹10,572
30 Jun 21₹10,959
30 Jun 22₹11,385
30 Jun 23₹12,073
30 Jun 24₹13,036
Growth of 10,000 investment over the years.
Nippon India Arbitrage Fund
Growth
Fund Details
DateValue
30 Jun 19₹10,000
30 Jun 20₹10,576
30 Jun 21₹10,942
30 Jun 22₹11,341
30 Jun 23₹11,989
30 Jun 24₹12,901

Detailed Portfolio Comparison

Asset Allocation
Kotak Equity Arbitrage Fund
Growth
Fund Details
Asset ClassValue
Cash97.01%
Debt3.43%
Other0.03%
Equity Sector Allocation
SectorValue
Financial Services25.78%
Industrials9.25%
Consumer Cyclical8.22%
Energy7.86%
Basic Materials6.93%
Consumer Defensive5.17%
Health Care3.76%
Utility3.73%
Technology3.43%
Communication Services3.06%
Real Estate1.54%
Debt Sector Allocation
SectorValue
Cash Equivalent91.59%
Corporate6.9%
Government1.96%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Kotak Money Market Dir Gr
Investment Fund | -
8%₹3,777 Cr9,050,825
HDFC Bank Ltd.-JUN2024
Derivatives | -
7%-₹3,032 Cr19,688,350
↑ 18,942,000
HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | HDFCBANK
7%₹3,028 Cr19,770,850
↓ -568,700
Kotak Liquid Dir Gr
Investment Fund | -
4%₹1,782 Cr3,608,732
Kotak Savings Fund Dir Gr
Investment Fund | -
3%₹1,234 Cr297,986,042
↓ -130,194,366
ICICI Bank Ltd.-JUN2024
Derivatives | -
3%-₹1,198 Cr10,608,500
↑ 10,559,500
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Dec 19 | ICICIBANK
3%₹1,189 Cr10,608,500
↑ 9,653,700
RELIANCE INDUSTRIES LTD.-JUN2024
Derivatives | -
2%-₹1,119 Cr3,882,750
↑ 3,882,750
Reliance Industries Ltd (Energy)
Equity, Since 31 May 18 | RELIANCE
2%₹1,111 Cr3,882,750
↑ 502,250
Tata Motors Ltd.-JUN2024
Derivatives | -
2%-₹919 Cr9,939,375
↑ 9,624,450
Asset Allocation
Nippon India Arbitrage Fund
Growth
Fund Details
Asset ClassValue
Cash96.03%
Debt4.36%
Other0.03%
Equity Sector Allocation
SectorValue
Financial Services25.39%
Industrials10.22%
Basic Materials8.84%
Energy6.6%
Health Care4.19%
Communication Services3.64%
Consumer Cyclical3.51%
Technology3.17%
Consumer Defensive2.77%
Utility2.36%
Real Estate0.24%
Debt Sector Allocation
SectorValue
Cash Equivalent86.57%
Corporate10.43%
Government3.4%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Nippon India Money Market Dir Gr
Investment Fund | -
9%₹1,332 Cr3,442,536
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 23 | HDFCBANK
7%₹1,049 Cr6,848,600
↑ 1,383,800
Hdfc Bank Limited_27/06/2024
Derivatives | -
7%-₹1,047 Cr6,799,650
↑ 6,799,650
Nippon India Liquid Dir Gr
Investment Fund | -
6%₹877 Cr1,466,202
↓ -168,214
Future on Adani Ports & Special Economic Zone Ltd
Derivatives | -
4%-₹572 Cr3,965,600
↓ -735,600
Adani Ports & Special Economic Zone Ltd (Industrials)
Equity, Since 31 Oct 19 | ADANIPORTS
4%₹570 Cr3,965,600
↓ -735,600
Future on Kotak Mahindra Bank Ltd
Derivatives | -
3%-₹428 Cr2,523,600
↓ -224,800
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Aug 23 | KOTAKBANK
3%₹424 Cr2,523,600
↓ -224,800
Future on Bank of Baroda
Derivatives | -
2%-₹350 Cr13,121,550
↑ 930,150
Bank of Baroda (Financial Services)
Equity, Since 31 Mar 23 | 532134
2%₹348 Cr13,121,550
↑ 930,150

Thus, based on the above pointers, it can be said that both the schemes differ on account of various parameters. Consequently, investors should be very cautious before investing in any of the Mutual Fund schemes. They should understand the modalities of the scheme completely. Also, if required, they can consult a financial advisor for an opinion. This will help the individuals to attain their goals on time in a hassle-free manner.

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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