Arbitrage Funds – In Detail
Arbitrage mutual funds are equity-oriented ‘Hybrid Funds’ which grasp arbitrage opportunities in the market; also, these can be a pricing mismatch between any two exchanges; different pricing in the future and spot market, etc. The manager of the arbitrage fund buys & sells the shares at the same time & earns the difference between the selling & buying price of the share.
Arbitrage Fund – The Working
Let’s take a look:
- Always take care of the price difference between exchanges
- Taking care of the price difference between the cash & futures markets
Factors to Consider Before Investing
Here:
- Let fund manager take care of the arbitrage funds.
- As there is no equity exposure risk, reason being the fund manager buy stock(s) in one market & simultaneously sells in another. Although, the opportunities are less, thus, the price difference is small too making returns average.
- In arbitrage fund, trades are being done every day, thus, transaction costs are huge.
Top 5 Arbitrage Funds as per Gulaq
Here:
- Nippon India Arbitrage Fund: It is a hybrid mutual fund scheme that was launched by Reliance mutual fund. Later on, it was introduced on 1st Jan 2013 to its investors. Currently, the fund is managed by Payal Kaipunjal. Talking about AUM, it is of INR 10,497 Cr, and the latest NAV is of INR 20.86 (dated as of 28th Feb 2020). The fund growth is rated as moderately low risk. Also, the minimum SIP investment is INR 100, and, lumpsum investment is INR 5000.
- BNP Paribas Arbitrage Fund: It is a hybrid mutual fund scheme that was launched by BNP Paribas mutual fund. Later on, it was introduced on 30th Dec 2016 to its investors. Currently, the fund is managed by Mayank Prakash, and Karthikraj Lakshmanan. Talking about AUM, it is of INR 691 Cr, and, the latest NAV is of INR 12.40 (dated as of 28th Feb 2020). The fund growth is rated moderately high risk. Also, the minimum SIP investment is INR 500.
- Edelweiss Arbitrage Fund: It is a hybrid mutual fund scheme that was launched by Edelweiss mutual fund. Later on, it was introduced on 27th June 2014 to its investors. Currently, the fund is managed by Bhavesh Jain, and Dhawal Dalal. Talking about AUM, it is of INR 4026 Cr, and the latest NAV is of INR 15.02 (dated as of 28th Feb 2020). The fund growth is rated moderately low risk. Also, the minimum SIP investment is INR 500, and, lumpsum investment is INR 5000.
- IDFC Arbitrage Fund: It is a mutual fund scheme that was launched by IDFC mutual fund. Later on, it was introduced on 1st Jan 2013 to its investors. Currently, the fund is managed by Arpit Kapoor, Harshal Joshi, and Yogik Pitti. Talking about AUM, it is of INR 12,224 Cr, and the latest NAV is of INR 25.70 (dated as of 28th Feb 2020). The fund growth is rated moderately low risk. Also, the minimum SIP investment is INR 100.
- Axis Arbitrage Fund: It is a hybrid mutual fund scheme that was launched by Axis mutual fund. Later on, it was introduced on 14th Aug 2013 to its investors. Currently, the fund is managed by Devang Shah, and Ashwin Patni. Talking about AUM, it is of INR 3080 Cr, and the latest NAV is of INR 14.79 (dated as of 28th Feb 2020). The fund growth is rated moderate risk. Also, the minimum SIP investment is INR 1000, and, lumpsum investment is INR 5000.
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*Disclaimer: investment in securities market are subject to market risks, read all the related documents carefully before investing