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Top Arbitrage Funds Rated by FINCASH for 2025 - 2026

Updated on September 1, 2025 , 832 views

Arbitrage Funds are one of the popular short-term investment plans in India. Arbitrage funds are a type of 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. Investors planning to invest in Arbitrage Funds, here are some of the top rated schemes to invest in.

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Top Rated Arbitrage Funds

FundNAVNet Assets (Cr)Rating3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)Information RatioSharpe Ratio
Edelweiss Arbitrage Fund Growth ₹19.5633
↓ 0.00
₹15,5501.53.26.775.77.7-0.950.9
Kotak Equity Arbitrage Fund Growth ₹37.8309
↓ -0.01
₹71,6081.53.26.87.25.97.801.19
Nippon India Arbitrage Fund Growth ₹26.7846
↓ 0.00
₹15,3831.43.16.46.85.67.500.26
PGIM India Arbitrage Fund Growth ₹18.5129
↑ 0.02
₹1101.136.36.55.37.100.14
ICICI Prudential Equity Arbitrage Fund Growth ₹34.6404
↑ 0.00
₹31,5261.53.36.775.77.601.21
UTI Arbitrage Fund Growth ₹35.3831
↑ 0.00
₹8,5121.53.36.875.77.701.43
Aditya Birla Sun Life Arbitrage Fund Growth ₹26.8163
↓ 0.00
₹22,3101.53.36.76.95.67.500.96
Invesco India Arbitrage Fund Growth ₹32.214
↓ -0.01
₹24,2051.53.26.67.15.87.601.12
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 3 Sep 25
Note: Ratio's shown as on 31 Jul 25

Research Highlights & Commentary of 8 Funds showcased

CommentaryEdelweiss Arbitrage FundKotak Equity Arbitrage FundNippon India Arbitrage FundPGIM India Arbitrage FundICICI Prudential Equity Arbitrage FundUTI Arbitrage FundAditya Birla Sun Life Arbitrage FundInvesco India Arbitrage Fund
Point 1Lower mid AUM (₹15,550 Cr).Highest AUM (₹71,608 Cr).Lower mid AUM (₹15,383 Cr).Bottom quartile AUM (₹110 Cr).Top quartile AUM (₹31,526 Cr).Bottom quartile AUM (₹8,512 Cr).Upper mid AUM (₹22,310 Cr).Upper mid AUM (₹24,205 Cr).
Point 2Established history (11+ yrs).Oldest track record among peers (19 yrs).Established history (14+ yrs).Established history (11+ yrs).Established history (18+ yrs).Established history (19+ yrs).Established history (16+ yrs).Established history (18+ yrs).
Point 3Top rated.Rating: 4★ (top quartile).Rating: 4★ (upper mid).Rating: 3★ (lower mid).Rating: 4★ (upper mid).Rating: 3★ (lower mid).Rating: 3★ (bottom quartile).Rating: 3★ (bottom quartile).
Point 4Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Moderate.Risk profile: Moderately Low.Risk profile: Moderate.Risk profile: Moderately Low.
Point 55Y return: 5.71% (upper mid).5Y return: 5.88% (top quartile).5Y return: 5.59% (bottom quartile).5Y return: 5.33% (bottom quartile).5Y return: 5.69% (lower mid).5Y return: 5.70% (upper mid).5Y return: 5.63% (lower mid).5Y return: 5.82% (top quartile).
Point 63Y return: 7.00% (lower mid).3Y return: 7.18% (top quartile).3Y return: 6.83% (bottom quartile).3Y return: 6.52% (bottom quartile).3Y return: 7.01% (upper mid).3Y return: 7.05% (upper mid).3Y return: 6.94% (lower mid).3Y return: 7.14% (top quartile).
Point 71Y return: 6.66% (lower mid).1Y return: 6.76% (top quartile).1Y return: 6.43% (bottom quartile).1Y return: 6.28% (bottom quartile).1Y return: 6.74% (upper mid).1Y return: 6.83% (top quartile).1Y return: 6.71% (upper mid).1Y return: 6.65% (lower mid).
Point 81M return: 0.33% (upper mid).1M return: 0.33% (lower mid).1M return: 0.32% (bottom quartile).1M return: 0.22% (bottom quartile).1M return: 0.35% (top quartile).1M return: 0.37% (top quartile).1M return: 0.33% (upper mid).1M return: 0.33% (lower mid).
Point 9Alpha: 0.00 (top quartile).Alpha: 0.00 (top quartile).Alpha: 0.00 (upper mid).Alpha: 0.00 (upper mid).Alpha: 0.00 (lower mid).Alpha: 0.00 (lower mid).Alpha: 0.00 (bottom quartile).Alpha: 0.00 (bottom quartile).
Point 10Sharpe: 0.90 (lower mid).Sharpe: 1.19 (upper mid).Sharpe: 0.26 (bottom quartile).Sharpe: 0.14 (bottom quartile).Sharpe: 1.21 (top quartile).Sharpe: 1.43 (top quartile).Sharpe: 0.96 (lower mid).Sharpe: 1.12 (upper mid).

Edelweiss Arbitrage Fund

  • Lower mid AUM (₹15,550 Cr).
  • Established history (11+ yrs).
  • Top rated.
  • Risk profile: Moderately Low.
  • 5Y return: 5.71% (upper mid).
  • 3Y return: 7.00% (lower mid).
  • 1Y return: 6.66% (lower mid).
  • 1M return: 0.33% (upper mid).
  • Alpha: 0.00 (top quartile).
  • Sharpe: 0.90 (lower mid).

Kotak Equity Arbitrage Fund

  • Highest AUM (₹71,608 Cr).
  • Oldest track record among peers (19 yrs).
  • Rating: 4★ (top quartile).
  • Risk profile: Moderately Low.
  • 5Y return: 5.88% (top quartile).
  • 3Y return: 7.18% (top quartile).
  • 1Y return: 6.76% (top quartile).
  • 1M return: 0.33% (lower mid).
  • Alpha: 0.00 (top quartile).
  • Sharpe: 1.19 (upper mid).

Nippon India Arbitrage Fund

  • Lower mid AUM (₹15,383 Cr).
  • Established history (14+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderately Low.
  • 5Y return: 5.59% (bottom quartile).
  • 3Y return: 6.83% (bottom quartile).
  • 1Y return: 6.43% (bottom quartile).
  • 1M return: 0.32% (bottom quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: 0.26 (bottom quartile).

PGIM India Arbitrage Fund

  • Bottom quartile AUM (₹110 Cr).
  • Established history (11+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: Moderately Low.
  • 5Y return: 5.33% (bottom quartile).
  • 3Y return: 6.52% (bottom quartile).
  • 1Y return: 6.28% (bottom quartile).
  • 1M return: 0.22% (bottom quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: 0.14 (bottom quartile).

ICICI Prudential Equity Arbitrage Fund

  • Top quartile AUM (₹31,526 Cr).
  • Established history (18+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderate.
  • 5Y return: 5.69% (lower mid).
  • 3Y return: 7.01% (upper mid).
  • 1Y return: 6.74% (upper mid).
  • 1M return: 0.35% (top quartile).
  • Alpha: 0.00 (lower mid).
  • Sharpe: 1.21 (top quartile).

UTI Arbitrage Fund

  • Bottom quartile AUM (₹8,512 Cr).
  • Established history (19+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: Moderately Low.
  • 5Y return: 5.70% (upper mid).
  • 3Y return: 7.05% (upper mid).
  • 1Y return: 6.83% (top quartile).
  • 1M return: 0.37% (top quartile).
  • Alpha: 0.00 (lower mid).
  • Sharpe: 1.43 (top quartile).

Aditya Birla Sun Life Arbitrage Fund

  • Upper mid AUM (₹22,310 Cr).
  • Established history (16+ yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderate.
  • 5Y return: 5.63% (lower mid).
  • 3Y return: 6.94% (lower mid).
  • 1Y return: 6.71% (upper mid).
  • 1M return: 0.33% (upper mid).
  • Alpha: 0.00 (bottom quartile).
  • Sharpe: 0.96 (lower mid).

Invesco India Arbitrage Fund

  • Upper mid AUM (₹24,205 Cr).
  • Established history (18+ yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderately Low.
  • 5Y return: 5.82% (top quartile).
  • 3Y return: 7.14% (top quartile).
  • 1Y return: 6.65% (lower mid).
  • 1M return: 0.33% (lower mid).
  • Alpha: 0.00 (bottom quartile).
  • Sharpe: 1.12 (upper mid).

Why Are These Top Performers?

Fincash has employed the following parameters for shortlisting the top performing funds:

  • Past Returns: Return analysis of last 3 years

  • Parameters & Weights: Information ratio with some modifications for our ratings and rankings

  • Qualitative & Quantitative Analysis: Quantitative measures like Expense Ratio, Sharpe Ratio, Alpa, Beta, including fund age and the size of the fund has been considered. Qualitative analysis like the reputation of the fund along with the fund manager is one of the important parameters that you would see in the listed funds.

  • Asset Size: The minimum AUM criteria for arbitrage funds are INR 100 Crores with some exceptions at times for new funds that are doing well in the market.

  • Performance with Respect to Benchmark: Peer average

Smart Tips to Invest in Arbitrage Funds

Some of the important tips to consider while Investing in arbitrage funds are:

  • Investment Tenure: Investors planning to invest in arbitrage funds should stay invested for minimum one year.

  • Invest via a SIP: SIP or Systematic Investment plan is the most efficient way to invest in a Mutual Fund. They not only provide a systematic way of investing, but also ensures regular investment growth. You can invest in a SIP with an amount as low as INR 500.

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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