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Fincash » Nippon India Arbitrage Fund Vs ICICI Prudential Equity Arbitrage Fund

Nippon India Arbitrage Fund Vs ICICI Prudential Equity Arbitrage Fund

Updated on January 24, 2020 , 112 views

Nippon India Arbitrage Fund (Formerly known as Reliance Arbitrage Fund)and ICICI Prudential Equity 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 Reliance/Nippon India Arbitrage Fund Vs ICICI Prudential Equity 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.

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 Advantage 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 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.

ICICI Prudential Equity Arbitrage Fund

ICICI Prudential Equity Arbitrage Fund was launched in the year 2006. The aim of the fund is to generate low volatility returns by using arbitrage and other derivative strategies in equity markets and investments in short-term debt portfolio.

Some of the top holdings of the fund as on 30th June 2018 are Cash Offset For Derivatives, Housing Development Finance Corp Ltd, Sun Pharmaceuticals Industries Ltd, Housing Development Finance Corporation Limited, etc.

Nippon India Arbitrage Fund Vs ICICI Prudential Equity Arbitrage Fund

Both Nippon India Arbitrage Fund Vs ICICI Prudential Equity Arbitrage Fund belong to the same category of arbitrage fund. However, there are numerous differences between them. So, let us analyze the differences between both the schemes on the basis of four sections given below.

Basics Section

Being the first section, it compares parameters such as current NAV, AUM, scheme category, Fincash Rating, and many more. With respect the sub category, both the scheme belong to Arbitrage Category

Based on Fincash Rating, it can be said that both the funds are rated as 4-Star.

The summary of the basics section is tabulated as follows.

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
₹19.8846 ↑ 0.01   (0.04 %)
₹10,528 on 31 Dec 19
14 Oct 10
Hybrid
Arbitrage
3
Moderately Low
1.05
4.28
0
0
Not Available
0-1 Months (0.25%),1 Months and above(NIL)
ICICI Prudential Equity Arbitrage Fund
Growth
Fund Details
₹25.604 ↑ 0.01   (0.03 %)
₹13,566 on 31 Dec 19
30 Dec 06
Hybrid
Arbitrage
4
Moderate
0.95
3.85
0
0
Not Available
0-1 Months (0.25%),1 Months and above(NIL)

Performance Section

Compounded Annual Growth Rate or CAGR returns is the comparable parameter forming part of the basics section. The CAGR returns are compared at different time intervals such as 1 Month Return, 6 Month Return, 3 Year Return, and Return since Inception. The comparison of performance section shows that Reliance Arbitrage Fund has performed better than ICICI Prudential Equity Arbitrage Fund. The table given below summarizes the comparison of the performance section.

Parameters
Performance1 Month
3 Month
6 Month
1 Year
3 Year
5 Year
Since launch
Nippon India Arbitrage Fund
Growth
Fund Details
0.5%
1.2%
2.6%
6.2%
6.2%
6.6%
7.7%
ICICI Prudential Equity Arbitrage Fund
Growth
Fund Details
0.5%
1.3%
2.6%
6.1%
6%
6.4%
7.5%

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Yearly Performance Section

The comparison of the absolute returns for a particular year earned by both the schemes is done in the yearly performance section. The comparison of absolute returns states that both the funds have n performed closely. The table given below shows the summary comparison of the absolute returns section.

Parameters
Yearly Performance2018
2017
2016
2015
2014
Nippon India Arbitrage Fund
Growth
Fund Details
6.2%
6.8%
5.5%
6.6%
8.1%
ICICI Prudential Equity Arbitrage Fund
Growth
Fund Details
5.9%
6.2%
5.5%
6.8%
7.6%

Other Details Section

Being the last section in the comparison, it includes parameters such as minimum SIP investment and minimum lumpsum investment. The minimum lump sum investment for both the schemes is same, that is, INR 5,000. However, the minimum SIP investment is different for both the schemes. The SIP amount in case of ICICI Prudential Equity Arbitrage Fund is INR 1,000 and of Reliance Arbitrage Fund is INR 100.

ICICI Prudential Equity Arbitrage Fund is jointly managed by Kayzad Eghlim and Manish Banthia.

The fund is currently managed jointly by Payal Kaipunjal and Kinjal Desai.

The summary comparison of the other details section is tabulated as follows.

Parameters
Other DetailsMin SIP Investment
Min Investment
Fund Manager
Nippon India Arbitrage Fund
Growth
Fund Details
₹100
₹5,000
Kinjal Desai - 1.35 Yr.
ICICI Prudential Equity Arbitrage Fund
Growth
Fund Details
₹1,000
₹5,000
Kayzad Eghlim - 8.92 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.
ICICI Prudential Equity Arbitrage Fund
Growth
Fund Details
DateValue
31 Dec 14₹10,000
31 Dec 15₹10,756
31 Dec 16₹11,487
31 Dec 17₹12,118
31 Dec 18₹12,872
31 Dec 19₹13,635

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
ICICI Prudential Equity Arbitrage Fund
Growth
Fund Details
Asset ClassValue
Cash93.94%
Debt5.47%
Other0.86%
Equity Sector Allocation
SectorValue
Financial Services22.86%
Technology7.82%
Energy7.68%
Basic Materials7.11%
Health Care5.8%
Consumer Defensive5.21%
Consumer Cyclical3.68%
Industrials3.19%
Utility1.65%
Communication Services1.04%
Real Estate0.13%
Debt Sector Allocation
SectorValue
Cash Equivalent87.57%
Corporate8.07%
Government3.78%
Credit Quality
RatingValue
AA4.83%
AAA95.17%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Cash Offset For Derivatives
Derivative Margin | -
66%₹9,317 Cr931,655
↑ 62,220
Future on HDFC Bank Ltd
Derivatives | -
12%-₹1,635 Cr8,869,250
↑ 8,869,250
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Oct 16 | HDFC
8%₹1,117 Cr4,864,250
↑ 38,250
Future on Reliance Industries Ltd
Derivatives | -
7%-₹920 Cr5,898,500
↑ 5,898,500
Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 18 | RELIANCE
7%₹915 Cr5,898,500
↑ 56,000
Future on Infosys Ltd
Derivatives | -
4%-₹516 Cr7,383,600
↑ 7,383,600
Infosys Ltd (Technology)
Equity, Since 31 Jul 18 | INFY
4%₹514 Cr7,383,600
↓ -177,600
HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 19 | HDFCBANK
4%₹511 Cr4,005,000
↓ -1,425,500
Treps
CBLO/Reverse Repo | -
3%₹425 Cr
Future on State Bank of India
Derivatives | -
3%-₹420 Cr12,234,000
↑ 12,234,000

As a result, from the above-mentioned pointers, it can be said that both the schemes differ on account of numerous parameters. Therefore, individuals should pay extra caution before Investing in any of the schemes. They should check whether the scheme matches their investment objective or not and understand its modalities completely. This will help them to achieve their goals on time along with ensuring their investment is safe.

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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