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Fincash » Nippon India Arbitrage Fund Vs Edelweiss Arbitrage Fund

Nippon India Arbitrage Fund Vs Edelweiss Arbitrage Fund

Updated on November 30, 2022 , 548 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
₹22.2018 ↑ 0.00   (0.01 %)
₹9,008 on 31 Oct 22
14 Oct 10
Hybrid
Arbitrage
3
Moderately Low
1.02
-1.37
0
0
Not Available
0-1 Months (0.25%),1 Months and above(NIL)
Edelweiss Arbitrage Fund
Growth
Fund Details
₹16.1365 ↑ 0.00   (0.03 %)
₹5,535 on 31 Oct 22
27 Jun 14
Hybrid
Arbitrage
1
Moderately Low
1.09
-1
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%
1.9%
3.7%
4%
5%
6.8%
Edelweiss Arbitrage Fund
Growth
Fund Details
0.4%
1.1%
2%
3.9%
4.1%
4.9%
5.8%

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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 Performance2021
2020
2019
2018
2017
Nippon India Arbitrage Fund
Growth
Fund Details
3.8%
4.3%
6.2%
6.8%
5.5%
Edelweiss Arbitrage Fund
Growth
Fund Details
3.8%
4.5%
6.2%
6.1%
5.8%

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
Anju Chhajer - 2.75 Yr.
Edelweiss Arbitrage Fund
Growth
Fund Details
₹500
₹5,000
Dhawal Dalal - 5.86 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
Nippon India Arbitrage Fund
Growth
Fund Details
DateValue
30 Nov 17₹10,000
30 Nov 18₹10,689
30 Nov 19₹11,356
30 Nov 20₹11,828
30 Nov 21₹12,306
30 Nov 22₹12,773
Growth of 10,000 investment over the years.
Edelweiss Arbitrage Fund
Growth
Fund Details
DateValue
30 Nov 17₹10,000
30 Nov 18₹10,629
30 Nov 19₹11,290
30 Nov 20₹11,786
30 Nov 21₹12,267
30 Nov 22₹12,733

Detailed Portfolio Comparison

Asset Allocation
Nippon India Arbitrage Fund
Growth
Fund Details
Asset ClassValue
Cash91.44%
Debt8.82%
Equity Sector Allocation
SectorValue
Financial Services22.2%
Basic Materials10.33%
Industrials8.52%
Energy7.78%
Technology6.17%
Consumer Cyclical5.41%
Health Care2.6%
Communication Services2.33%
Consumer Defensive1.71%
Utility1.32%
Real Estate0.73%
Debt Sector Allocation
SectorValue
Cash Equivalent86.97%
Government9.13%
Corporate4.17%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Nippon India Money Market Dir Gr
Investment Fund | -
8%₹714 Cr2,085,640
Nippon India Liquid Dir Gr
Investment Fund | -
5%₹456 Cr855,533
Icici Bank Limited_27/10/2022
Derivatives | -
4%-₹391 Cr4,507,250
↑ 4,507,250
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 20 | ICICIBANK
4%₹389 Cr4,507,250
↑ 881,375
Nippon India Low Duration Dir Gr
Investment Fund | -
4%₹365 Cr1,131,266
Future on Adani Enterprises Ltd
Derivatives | -
4%-₹357 Cr1,029,500
↓ -114,000
Adani Enterprises Ltd (Energy)
Equity, Since 31 Aug 20 | 512599
4%₹356 Cr1,029,500
↓ -114,000
Future on Adani Ports & Special Economic Zone Ltd
Derivatives | -
4%-₹341 Cr4,133,750
↓ -57,500
Adani Ports & Special Economic Zone Ltd (Industrials)
Equity, Since 31 Oct 19 | ADANIPORTS
4%₹339 Cr4,133,750
↓ -57,500
Future on Reliance Industries Ltd
Derivatives | -
3%-₹282 Cr1,182,250
↑ 103,500
Asset Allocation
Edelweiss Arbitrage Fund
Growth
Fund Details
Asset ClassValue
Cash87.17%
Debt13.11%
Equity Sector Allocation
SectorValue
Financial Services15.93%
Basic Materials11.27%
Industrials11.1%
Technology5.25%
Consumer Cyclical5.17%
Energy5.14%
Communication Services4.61%
Health Care4.06%
Consumer Defensive2.36%
Utility2.02%
Real Estate0.54%
Debt Sector Allocation
SectorValue
Cash Equivalent84.51%
Government13.11%
Corporate2.66%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Housing Development Finance Corporation Ltd
Debentures | -
5%₹275 Cr27,500,000
Future on Adani Ports & Special Economic Zone Ltd
Derivatives | -
4%-₹235 Cr2,841,250
↓ -791,250
Adani Ports & Special Economic Zone Ltd (Industrials)
Equity, Since 30 Sep 19 | ADANIPORTS
4%₹233 Cr2,841,250
↓ -791,250
Future on Zee Entertainment Enterprises Ltd
Derivatives | -
3%-₹161 Cr6,183,000
↑ 852,000
Zee Entertainment Enterprises Ltd (Communication Services)
Equity, Since 30 Jun 20 | ZEEL
3%₹160 Cr6,183,000
↑ 852,000
Future on Adani Enterprises Ltd
Derivatives | -
3%-₹158 Cr455,000
↓ -255,000
Adani Enterprises Ltd (Energy)
Equity, Since 30 Sep 18 | 512599
3%₹157 Cr455,000
↓ -255,000
Future on Kotak Mahindra Bank Ltd
Derivatives | -
3%-₹140 Cr769,200
↑ 377,600
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Mar 21 | KOTAKBANK
3%₹140 Cr769,200
↑ 377,600
7.16% Govt Stock 2023
Sovereign Bonds | -
2%₹125 Cr12,500,000

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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