Who Should Invest in Arbitrage Mutual Funds?
Arbitrage funds are balanced or hybrid funds as they invest in both debt and equity, but their primary investments are in equities. Even though Arbitrage funds are relatively low-risk funds, their payoffs, or arbitrage fund returns, are unpredictable. They are another variant of mutual funds. They function on the principle of purchasing stock in the cash market and simultaneously selling off that interest in the futures market. View More
Features of Arbitrage Mutual Funds
Arbitrage funds offer multiple benefits to investors. Hence, they appeal most to investors with low-risk tolerance. These funds are born to rule only when the markets are volatile. However, if there is a shortage of profitable arbitrage trades, the funds are invested more heavily on debts. This retains them at low-risk levels, unlike longer-term investment funds. View More
Factors to consider while investing in Arbitrage Funds
Here are the parameters you must evaluate before investing in arbitrage funds: View More
Taxability of Arbitrage Funds
Since arbitrage funds involve 65% of their holding in equities, they are categorized as equity funds and are taxed accordingly. This way, these funds earn the advantage of zero taxability on long-term capital gains (LTCG). If the funds are held on for more than a year, they fall under the category of LTCG and are completely tax-free. View More
Risks Involved With Arbitrage Funds
Arbitrage funds are hybrid funds, primarily investing in debt funds that yield low returns, differentiating them from managed equity mutual funds. You need to keep the following points in mind before going ahead and investing in them. View More
Advantage of Arbitrage Mutual Funds
Arbitrage funds are good when you expect to get moderate returns from your investments. The advantages of investing in these funds are: View More
Popular Arbitrage Mutual Funds
- Fund Name
- Min SIP Investment Amt
- AUM (Cr.)
- 3Y Return
Tata Arbitrage Fund – Direct Growth is an Arbitrage scheme that was launched on 18-12-18 and is currently under the management of our experienced fund manager Sailesh Jain. With an impressive AUM of ₹10,151 Crores, this scheme's latest NAV is ₹13.692 as of 18-03-24.
Tata Arbitrage Fund – Direct Growth scheme has delivered a return performance of 8.3% in the last 1 year, 6.1% in the last 3 years, and an 6.2% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Arbitrage funds.
- Min SIP Investment Amt
- ₹5,000
- AUM (Cr.)
- ₹10,151
- 3Y Return
- 8.3%
Edelweiss Arbitrage Fund – Direct Growth is an Arbitrage scheme that was launched on 27-06-14 and is currently under the management of our experienced fund manager Bhavesh Jain. With an impressive AUM of ₹8,768 Crores, this scheme's latest NAV is ₹18.8624 as of 18-03-24.
Edelweiss Arbitrage Fund – Direct Growth scheme has delivered a return performance of 8.4% in the last 1 year, 6.2% in the last 3 years, and an 6.7% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Arbitrage funds.
- Min SIP Investment Amt
- ₹100
- AUM (Cr.)
- ₹8,768
- 3Y Return
- 8.4%
AXIS Arbitrage Fund – Direct Growth is an Arbitrage scheme that was launched on 14-08-14 and is currently under the management of our experienced fund manager Ashish Naik. With an impressive AUM of ₹3,966 Crores, this scheme's latest NAV is ₹18.4287 as of 18-03-24.
AXIS Arbitrage Fund – Direct Growth scheme has delivered a return performance of 8.1% in the last 1 year, 6.1% in the last 3 years, and an 6.6% since its launch. With a minimum SIP investment of just ₹500, this scheme offers a great investment opportunity for those looking to invest in Arbitrage funds.
- Min SIP Investment Amt
- ₹500
- AUM (Cr.)
- ₹3,966
- 3Y Return
- 8.1%
Invesco India Arbitrage Fund – Direct Growth is an Arbitrage scheme that was launched on 02-01-13 and is currently under the management of our experienced fund manager Deepak Gupta. With an impressive AUM of ₹14,592 Crores, this scheme's latest NAV is ₹31.2876 as of 18-03-24.
Invesco India Arbitrage Fund – Direct Growth scheme has delivered a return performance of 8.4% in the last 1 year, 6.4% in the last 3 years, and an 6.9% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Arbitrage funds.
- Min SIP Investment Amt
- ₹1,000
- AUM (Cr.)
- ₹14,592
- 3Y Return
- 8.4%
Kotak Equity Hybrid Fund – Direct Growth is an Aggressive Hybrid scheme that was launched on 03-11-14 and is currently under the management of our experienced fund manager Pankaj Tibrewal. With an impressive AUM of ₹5,045 Crores, this scheme's latest NAV is ₹58.767 as of 18-03-24.
Kotak Equity Hybrid Fund – Direct Growth scheme has delivered a return performance of 27.4% in the last 1 year, 15.9% in the last 3 years, and an 13.5% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Aggressive Hybrid funds.
- Min SIP Investment Amt
- ₹100
- AUM (Cr.)
- ₹5,045
- 3Y Return
- 27.4%
Parag Parikh Arbitrage Fund – Direct Growth is an Arbitrage scheme that was launched on 02-11-23 and is currently under the management of our experienced fund manager Rajeev Thakkar. With an impressive AUM of ₹370 Crores, this scheme's latest NAV is ₹10.2909 as of 18-03-24.
Parag Parikh Arbitrage Fund – Direct Growth scheme has delivered a return performance of -% in the last 1 year, -% in the last 3 years, and an 2.8% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Arbitrage funds.
- Min SIP Investment Amt
- ₹1,000
- AUM (Cr.)
- ₹370
- 3Y Return
- -%
Aditya Birla SL Arbitrage Fund – Dir Growth is an Arbitrage scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Lovelish Solanki. With an impressive AUM of ₹10,668 Crores, this scheme's latest NAV is ₹25.9539 as of 18-03-24.
Aditya Birla SL Arbitrage Fund – Dir Growth scheme has delivered a return performance of 8.2% in the last 1 year, 6.1% in the last 3 years, and an 4.8% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Arbitrage funds.
- Min SIP Investment Amt
- ₹1,000
- AUM (Cr.)
- ₹10,668
- 3Y Return
- 8.2%
Union Arbitrage Fund – Direct Growth is an Arbitrage scheme that was launched on 20-02-19 and is currently under the management of our experienced fund manager Vishal Thakker. With an impressive AUM of ₹155 Crores, this scheme's latest NAV is ₹13.2209 as of 18-03-24.
Union Arbitrage Fund – Direct Growth scheme has delivered a return performance of 8.2% in the last 1 year, 5.8% in the last 3 years, and an 5.6% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Arbitrage funds.
- Min SIP Investment Amt
- ₹1,000
- AUM (Cr.)
- ₹155
- 3Y Return
- 8.2%
Frequently Asked Questions
Who can invest in arbitrage mutual funds?
Arbitrage funds offer an optimal mix of equity and debt. It invests 65% of its Asset Under Management (AUM) in equity and the remaining in high-quality debt instruments. So, any semi-aggressive or conservative investor can invest in these funds.
How are arbitrage mutual funds taxed?
Arbitrage funds are taxed like any equity fund. For instance, you must pay an LTCG (Long Term Capital Gains) tax of 10%, along with Surcharge and Cess, if you sell your units one year from the investment date.
However, selling your units before one year will be treated as STCG (Short Term Capital Gains), and you have to pay a tax of 15% plus surcharge and cess. However, if your income from equity funds is less than INR 1 lakh a financial year, you don’t have to pay any taxes.
Is there any exit load on arbitrage mutual funds?
Exit load refers to an investor’s fee for withdrawing money before a specific period. Arbitrage mutual funds generally levy exit loads between 0.25% and 1%.
What is the typical expense ratio of arbitrage funds?
The expense ratio eats into the profit from a mutual fund. Fortunately, arbitrage funds’ expense ratios are some of the lowest among equity mutual funds. Generally, direct growth arbitrage funds’ expense ratio hovers between 0.30% and 0.45%.
What is the typical return of arbitrage funds?
A quick look at the best arbitrage mutual funds reveals that these funds generally deliver annualized returns in the range of 4.85% and 6.88%. However, checking an arbitrage mutual fund’s historical returns is good before investing.
Which are the best arbitrage mutual funds in India?
Tata Arbitrage Fund, Edelweiss Arbitrage Fund, Axis Arbitrage Fund, Invesco India Arbitrage Fund, and Kotak Equity Arbitrage Fund are some of the top arbitrage mutual funds in India.