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Fincash » Nippon India Arbitrage Fund Vs Edelweiss Arbitrage Fund

Nippon India Arbitrage Fund Vs Edelweiss Arbitrage Fund

Updated on January 15, 2020 , 77 views

Nippon India Arbitrage Fund (Formerly known as Reliance Arbitrage Fund) Vs Edelweiss 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 Nippon India Arbitrage Fund and Edelweiss Arbitrage Fund belong to the same category they 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.

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 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 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.

Edelweiss Arbitrage Fund

Edelweiss Arbitrage Fund was launched in the year 2014. The investment objective of the scheme is to generate income by Investing in arbitrage opportunities in the cash and the derivative segments of the equity markets. The fund also seeks advantage of the arbitrage opportunities available within the derivative segment and by investing a portion in debt and money market securities. Some of the top holdings of Edelweiss Arbitrage Fund as on 30th June 2018 are Cash Offset For Derivatives, Clearing Corporation Of India Ltd, Edelweiss Commodities Services Ltd, JSW Steel Ltd Shs Dematerialised, Indiabulls Housing Finance Ltd, etc. Edelweiss Arbitrage Fund is been currently managed by two managers- Dhawal Dalal and Bhavesh Jain.

Nippon India/Reliance Arbitrage Fund Vs Edelweiss Arbitrage Fund

Though both Nippon India Arbitrage Fund and Edelweiss 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 Nippon India Arbitrage Fund was INR 18.1855, while the NAV of Edelweiss Arbitrage Fund was INR 13.189. With respect to the Fincash Rating, it can be said that Nippon India Arbitrage Fund is rated as 4-Star and Edelweiss Arbitrage Fund is rated as 5-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
Nippon India Arbitrage Fund
Growth
Fund Details
₹19.8596 ↓ 0.00   (-0.01 %)
₹10,224 on 30 Nov 19
14 Oct 10
Hybrid
Arbitrage
3
Moderately Low
1.05
4.23
0
0
Not Available
0-1 Months (0.25%),1 Months and above(NIL)
Edelweiss Arbitrage Fund
Growth
Fund Details
₹14.3905 ↑ 0.00   (0.01 %)
₹3,879 on 30 Nov 19
27 Jun 14
Hybrid
Arbitrage
1
Moderately Low
1.12
4.38
0
0
Not Available
0-30 Days (0.25%),30 Days 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 Nippon India/ Reliance Arbitrage Fund and Edelweiss 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
Nippon India Arbitrage Fund
Growth
Fund Details
0.4%
1.1%
2.6%
6.2%
6.2%
6.6%
7.7%
Edelweiss Arbitrage Fund
Growth
Fund Details
0.4%
1.2%
2.7%
6.2%
6.1%
6.5%
6.8%

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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 Performance2019
2018
2017
2016
2015
Nippon India Arbitrage Fund
Growth
Fund Details
6.2%
6.8%
5.5%
6.6%
8.1%
Edelweiss Arbitrage Fund
Growth
Fund Details
6.2%
6.1%
5.8%
6.7%
8%

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 Nippon India/Reliance Arbitrage Fund was INR 8,123 crores, while the AUM of Edelweiss Arbitrage Fund was INR 4,807 crores. Similarly, the minimum SIP investment for both the schemes is also different. The SIP amount for Nippon Mutual Fund’s scheme is INR 100 and for HDFC 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
Nippon India Arbitrage Fund
Growth
Fund Details
₹100
₹5,000
Kinjal Desai - 1.35 Yr.
Edelweiss Arbitrage Fund
Growth
Fund Details
₹500
₹5,000
Dhawal Dalal - 2.94 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
Nippon India Arbitrage Fund
Growth
Fund Details
DateValue
31 Dec 14₹10,000
31 Dec 15₹10,805
31 Dec 16₹11,517
31 Dec 17₹12,146
31 Dec 18₹12,969
31 Dec 19₹13,768
Growth of 10,000 investment over the years.
Edelweiss Arbitrage Fund
Growth
Fund Details
DateValue
31 Dec 14₹10,000
31 Dec 15₹10,796
31 Dec 16₹11,515
31 Dec 17₹12,187
31 Dec 18₹12,930
31 Dec 19₹13,731

Detailed Portfolio Comparison

Asset Allocation
Nippon India Arbitrage Fund
Growth
Fund Details
Asset ClassValue
Cash94.81%
Debt4.3%
Other1.18%
Equity Sector Allocation
SectorValue
Financial Services16.65%
Basic Materials9.51%
Technology8.54%
Health Care7.48%
Consumer Cyclical7.22%
Consumer Defensive6.34%
Energy5.08%
Industrials3.54%
Utility1.9%
Communication Services1.54%
Real Estate0.13%
Debt Sector Allocation
SectorValue
Cash Equivalent93.21%
Corporate4.93%
Government0.97%
Credit Quality
RatingValue
AA12.75%
AAA87.25%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Cash Offset For Derivatives
Derivative Margin | -
68%₹6,975 Cr697,512
↑ 50,411
Hdfc Bank Limited
Certificate of Deposit | -
10%₹1,050 Cr
Triparty Repo
CBLO/Reverse Repo | -
6%₹592 Cr
Future on Tata Consultancy Services Ltd
Derivatives | -
5%-₹549 Cr2,662,000
↑ 2,662,000
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Sep 18 | TCS
5%₹547 Cr2,662,000
↑ 883,250
Future on Sun Pharmaceuticals Industries Ltd
Derivatives | -
5%-₹460 Cr10,179,400
↑ 10,179,400
Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 30 Apr 15 | SUNPHARMA
4%₹458 Cr10,179,400
↑ 896,500
Axis Bank Limited
Certificate of Deposit | -
4%₹375 Cr
Future on Housing Development Finance Corp Ltd
Derivatives | -
3%-₹356 Cr1,544,000
↑ 1,544,000
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Jan 18 | HDFC
3%₹355 Cr1,544,000
↓ -1,114,500
Asset Allocation
Edelweiss Arbitrage Fund
Growth
Fund Details
Asset ClassValue
Cash99.52%
Debt0.78%
Equity Sector Allocation
SectorValue
Financial Services17.68%
Energy11.84%
Basic Materials9.78%
Consumer Cyclical5.29%
Industrials5.26%
Health Care4.66%
Technology4.55%
Consumer Defensive3.85%
Utility3.2%
Communication Services2.94%
Real Estate0%
Debt Sector Allocation
SectorValue
Cash Equivalent89.74%
Corporate8.65%
Government1.91%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Cash Offset For Derivatives
Derivative Margin | -
69%₹2,693 Cr269,258
↑ 13,929
Future on Reliance Industries Ltd
Derivatives | -
8%-₹324 Cr2,080,000
↑ 2,080,000
Future on Housing Development Finance Corp Ltd
Derivatives | -
8%-₹324 Cr1,403,000
↑ 1,403,000
Reliance Industries Ltd (Energy)
Equity, Since 30 Apr 18 | RELIANCE
8%₹323 Cr2,080,000
↑ 137,000
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Aug 18 | HDFC
8%₹322 Cr1,403,000
↑ 3,500
Future on Axis Bank Ltd
Derivatives | -
3%-₹125 Cr1,678,800
↑ 1,678,800
Axis Bank Ltd (Financial Services)
Equity, Since 31 Mar 19 | 532215
3%₹124 Cr1,678,800
↓ -116,400
HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -
3%₹121 Cr12,500,000
Future on ITC Ltd.
Derivatives | -
3%-₹114 Cr4,612,800
↑ 4,612,800
ITC Ltd (Consumer Defensive)
Equity, Since 30 Sep 18 | ITC
3%₹114 Cr4,612,800
↑ 1,017,600

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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