Groww Logo
search
Home>Mutual Funds>Category>Best Arbitrage Mutual Funds

Best Arbitrage Mutual Funds

Arbitrage funds leverage the price difference of equity shares between two markets to generate maximum returns for investors. Fund managers of these schemes buy shares in the cash market and sell them in the derivatives market simultaneously. One can calculate returns earned by the best arbitrage mutual funds by subtracting the cost price from the selling price. These funds fall under the category of hybrid funds as they invest a significant portion of the corpus in debt instruments.

Why invest with Groww?

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Sign Up

Top 10 Arbitrage Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Edelweiss Arbitrage FundHybridLow4.5%5star6,206
Nippon India Arbitrage FundHybridLow4.4%5star12,451
BNP Paribas Arbitrage FundHybridLow4.4%5star713
L&T Arbitrage Opportunities FundHybridLow4.4%4star5,572
UTI Arbitrage FundHybridLow4.4%4star6,184
Aditya Birla Sun Life Arbitrage FundHybridLow4.5%4star8,675
Kotak Equity Arbitrage FundHybridLow4.5%4star25,000
Tata Arbitrage Fund - Direct PlanHybridLow4.6%4star11,972
Axis Enhanced Arbitrage FundHybridLow4.3%3star3,568
IDFC Arbitrage FundHybridLow4.2%3star6,640
DSP Arbitrage FundHybridLow4.0%3star1,858
ICICI Prudential Equity Arbitrage FundHybridLow4.3%3star15,346
Invesco India Arbitrage FundHybridLow4.0%3star818
PGIM India Arbitrage FundHybridLow4.2%3star138
HDFC Arbitrage FundHybridLow4.2%2star8,063
View All Top 10 Arbitrage Mutual Funds

Features of Arbitrage Mutual Funds

Here are some characteristics of arbitrage funds: 

Asset allocation: As per the Securities and Exchange Board of India (SEBI) rules, arbitrage funds must invest at least 65% in equity shares of companies. The remaining portion of the portfolio primarily comprises debt instruments. 

Risk-reward ratio: The portfolio of top arbitrage mutual funds includes investment in fixed-income generating instruments, which makes these less risky than equity funds.  Nevertheless, since arbitrage opportunities do not arise frequently, the returns generated are not that high.

Taxability

Short-term Capital Gains Tax: If investors sell their units within a year from the date of purchase, short term capital gains tax of 15% is applicable on such proceeds. 

Long-term Capital Gains Tax: For long-term capital gains – profits from the sale of units with a holding period of more than 1 year – 10% tax is applicable on the amount exceeding Rs.1 lakh. Please note that investors do not have to pay tax on gains of up to Rs.1 lakh.

Who are These Funds Suited for?

As mentioned earlier, the risk level associated with these funds is quite similar to that of debt funds. Hence, these suit investment objectives with a risk-averse outlook but with equity exposure. These funds have the potential to minimise risk and be less impacted in case of persistent market fluctuations. Nevertheless, it’s vital for investors to take certain aspects into account before investing in the best arbitrage mutual fund. Let’s take a look at them in detail. 

Investment objective: The investment objectives of individuals tend to vary. If a mutual fund scheme appears to be the best option for one investor, it might not be suitable for another. That’s why it’s crucial that prospective investors identify their financial goals first before allocating their savings to an arbitrage mutual fund. 

Risk appetite: It’s essential for investors to assess their risk profile before choosing to invest in the best arbitrage mutual funds

Expense ratio: This is a maintenance charge levied annually by a fund house on investors to finance its expenses. It is a small percentage of the fund’s total assets. When choosing an arbitrage fund, investors must make sure to compare the expense ratio of the best arbitrage mutual funds 2021.

Direct or regular plan: Investors can opt for a direct plan from an asset management company directly. There’s no involvement of brokers, distributors or any other third party. However, to subscribe to a regular plan, individuals must invest via intermediaries, which involves commission and brokerage. Hence, regular plans report a lower NAV and also have a comparatively higher expense ratio than direct plans. 

Past performance of the fund: It’s vital for individuals to check the historical returns of an arbitrage fund to get an idea about its past performance. By analysing the performance, they can understand whether the fund has been able to achieve its goal thus far. Evaluating this factor also offers insights into a scheme’s graph of returns in response to different market conditions.

Exit load: Exit load refers to the fee that an asset management company charges if an investor redeems his/her units from a mutual fund scheme partially or fully within a pre-specified time frame. Investors must ensure not to confuse this with the expense ratio. They can avoid paying this fee by not redeeming their units within a certain period. However, paying the expense ratio on a yearly basis is mandatory.

Track record of the fund manager: Fund managers of the best arbitrage mutual funds make the most of arbitrage opportunities and generate maximum returns for investors. However, this requires extensive knowledge, specialised skills, and thorough research and analysis. Hence, it’s vital to check the experience and track record of a fund manager.

Major Advantages

Here are some benefits of investing in the best arbitrage mutual funds

Minimal risk: Arbitrage funds can generate short-term returns by taking advantage of low-risk buy-and-sell opportunities that may arise. 

Higher returns than savings accounts: Arbitrage funds have the capacity to generate higher returns than a savings deposit account. They can also generate stable returns in volatile market conditions. 

Taxed as equity funds: Arbitrage funds are treated as equity funds for taxation purposes. It’s because these funds invest at least 65% of their assets in equity shares.

Choice of investment route: Investors can either choose the lump sum mode or systematic investment plan (SIP) option to allocate their funds to an arbitrage mutual fund. The former allows individuals to invest the entire amount in a fund all at once. By opting for the SIP route, one can invest in the best arbitrage mutual funds by paying fixed instalments at regular intervals. While the lump sum mode requires an individual to invest at least Rs.1,000, one needs Rs.500 to start investing via the SIP route.

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Edelweiss Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.69% annualized returns in the last three years. In the last year, its returns were 4.45%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.45% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM6,206Cr
1Y Returns4.5%

Nippon India Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.59% annualized returns in the last three years. In the last year, its returns were 4.42%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.42% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹5,000
AUM12,451Cr
1Y Returns4.4%

BNP Paribas Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.54% annualized returns in the last three years. In the last year, its returns were 4.42%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.42% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹300.

Min Investment Amt₹5,000
AUM713Cr
1Y Returns4.4%

L&T Arbitrage Opportunities Fund Direct Growth

Fund Performance: This fund has given 5.52% annualized returns in the last three years. In the last year, its returns were 4.36%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.36% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM5,572Cr
1Y Returns4.4%

UTI Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.48% annualized returns in the last three years. In the last year, its returns were 4.39%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.39% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM6,184Cr
1Y Returns4.4%

Aditya Birla Sun Life Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.48% annualized returns in the last three years. In the last year, its returns were 4.47%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.47% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹1,000
AUM8,675Cr
1Y Returns4.5%

Kotak Equity Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.46% annualized returns in the last three years. In the last year, its returns were 4.49%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.49% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM25,000Cr
1Y Returns4.5%

Tata Arbitrage Fund Direct Growth

Fund Performance: In the last year, its returns were 4.58%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.58% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM11,972Cr
1Y Returns4.6%

Axis Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.47% annualized returns in the last three years. In the last year, its returns were 4.3%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.3% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM3,568Cr
1Y Returns4.3%

IDFC Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.39% annualized returns in the last three years. In the last year, its returns were 4.19%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.19% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM6,640Cr
1Y Returns4.2%

DSP Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.39% annualized returns in the last three years. In the last year, its returns were 4.02%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.02% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹500
AUM1,858Cr
1Y Returns4.0%

ICICI Prudential Equity Arbitrage Direct Growth

Fund Performance: This fund has given 5.38% annualized returns in the last three years. In the last year, its returns were 4.28%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.28% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM15,346Cr
1Y Returns4.3%

Invesco India Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.3% annualized returns in the last three years. In the last year, its returns were 4.05%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.05% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹1,000
AUM818Cr
1Y Returns4.0%

PGIM India Arbitrage Fund Direct Growth

Fund Performance: This fund has given 5.07% annualized returns in the last three years. In the last year, its returns were 4.15%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.15% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM138Cr
1Y Returns4.2%

HDFC Arbitrage Fund Wholesale Direct Growth

Fund Performance: This fund has given 5.12% annualized returns in the last three years. In the last year, its returns were 4.2%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.2% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,00,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹1,00,000
AUM8,063Cr
1Y Returns4.2%

Explore all Mutual Funds on Groww

Explore Mutual Funds
ⓒ 2016-2021 Groww. All rights reserved, Built with in India
MOST POPULAR ON GROWWVERSION - 1.9.7
STOCK MARKET INDICES:  S&P BSE SENSEX |  S&P BSE 100 |  NIFTY 100 |  NIFTY 50 |  NIFTY MIDCAP 100 |  NIFTY BANK |  NIFTY NEXT 50
MUTUAL FUNDS COMPANIES: ICICI PRUDENTIAL  | HDFC  | NIPPON INDIA  | ADITYA BIRLA SUN LIFE  | SBI  | UTI  | FRANKLIN TEMPLETON  | KOTAK MAHINDRA  | IDFC  | DSP  | AXIS  | TATA  | L&T  | SUNDARAM  | PGIM  | INVESCO  | LIC  | JM FINANCIAL  | BARODA PIONEER  | CANARA ROBECO  | HSBC  | IDBI  | INDIABULLS  | MOTILAL OSWAL  | BNP PARIBAS  | MIRAE ASSET  | PRINCIPAL  | BOI AXA  | UNION KBC  | TAURUS  | EDELWEISS  | NAVI  | MAHINDRA  | QUANTUM  | PPFAS  | IIFL  | Quant  | SHRIRAM  | SAHARA | ITI