Close Menu
Fund Focus News
    Facebook X (Twitter) Instagram
    Trending
    • Mutual funds are taking cash calls—but are they working?
    • Investing in CIBC mutual funds
    • How To Buy Direct Mutual Funds Online In India | Business News
    • Top 3 Tax-saving ELSS Mutual Funds with Highest Returns: Rs 3.5 lakh invested in No. 1 fund has grown to Rs 12.66 lakh in just 5 years
    • Lum Sum vs Income Tax vs Inflation: What will be value of your Rs 1 lakh mutual fund investment in 20 years after paying tax, adjusting to inflation?
    • Invesco MF launches Income Plus Arbitrage Active Fund of Fund
    • SBI Mutual Fund launches AI chatbot ‘SmartAssist’ for WhatsApp-based investing
    • Lombard Odier & Cie s’associe à BlueBay pour lancer un fonds sur les obligations souveraines
    Facebook X (Twitter) Instagram
    Fund Focus News
    • Home
    • Bonds
    • ETFs
    • Funds
    • Investments
    • Mutual Funds
    • Property Investments
    • SIP
    Fund Focus News
    Home»Mutual Funds»Best arbitrage mutual funds to invest in July 2024
    Mutual Funds

    Best arbitrage mutual funds to invest in July 2024

    July 18, 2024


    Do you want to park your money for a year or more? Are you looking for the best after-tax returns? Consider investing in arbitrage mutual funds.Arbitrage funds look for arbitrage opportunities available between the cash and derivatives markets. In other words, the fund managers in these schemes look for the price difference that they can exploit between the cash and derivatives markets. They may also invest in debt securities and equities if there are no arbitrage opportunities available in the market.

    LTCG tax

    Arbitrage funds are taxed like equity schemes. This means they qualify for long term capital gains tax of 10% if investments are held for more than a year. If investments are for less than a year, short term capital gains tax of 15% will be applicable.

    Volatility in the stock market may help arbitrage funds as it will offer better arbitrage opportunities. Also, returns from arbitrage funds have nothing to do with the interest rate regime as they invest in arbitrage opportunities. So they may be suitable for investors who don’t want to take a call on interest rates.

    Arbitrage opportunities

    However, you should keep in mind that there may be periods when there are not many arbitrage opportunities available in the market. This can happen when the market is headed in a single direction. A volatile market is helpful to arbitrage funds as there will be more arbitrage opportunities available.

    Invest and Earn on ET Money – Get up to 9.5% p.a. returns


    Here are our recommended arbitrage schemes you can consider investing to take care of your short-term needs. There is no change in the list this month as all schemes have retained their place in the list. Watch out for our monthly updates to ensure your schemes are faring well.

    Best arbitrage funds to invest in July 2024

    • Kotak Equity Arbitrage Fund
    • Nippon India Arbitrage Fund


    Methodology
    ETMutualFunds.com has employed the following parameters for shortlisting the hybrid mutual fund schemes.
    1. Mean rolling returns: Rolled daily for the last three years.2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.

    i) When H equals 0.5, the series of returns is said to be a geometric Brownian time series. This type of time series is difficult to forecast.

    ii) When H is less than 0.5, the series is said to be mean reverting.

    iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series

    3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.

    X = Returns below zero

    Y = Sum of all squares of X

    Z = Y/number of days taken for computing the ratio

    Downside risk = Square root of Z

    4. Outperformance
    i) Equity portion: It is measured by Jensen’s Alpha for the last three years. Jensen’s Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market.

    Average returns generated by the MF Scheme =

    [Risk Free Rate + Beta of the MF Scheme * {(Average return of the index – Risk Free Rate}

    ii) Debt portion: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund.

    5. Asset size: For Hybrid funds, the threshold asset size is Rs 50 crore

    (Disclaimer: past performance is no guarantee for future performance.)
    Whatsapp Banner



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email

    Related Posts

    Mutual funds are taking cash calls—but are they working?

    July 2, 2025

    Investing in CIBC mutual funds

    July 2, 2025

    How To Buy Direct Mutual Funds Online In India | Business News

    July 2, 2025
    Leave A Reply Cancel Reply

    Top Posts

    Mutual funds are taking cash calls—but are they working?

    July 2, 2025

    Qu’est-ce qu’un green bond ?

    December 7, 2017

    les cat’ bonds deviennent incontournables

    September 5, 2018

    Quel est le rôle du service des impôts des particuliers (SIP) ?

    May 7, 2020
    Don't Miss
    Mutual Funds

    Mutual funds are taking cash calls—but are they working?

    July 2, 2025

    Indian equity mutual funds are sitting on more cash than usual. As of April 2025,…

    Investing in CIBC mutual funds

    July 2, 2025

    How To Buy Direct Mutual Funds Online In India | Business News

    July 2, 2025

    Top 3 Tax-saving ELSS Mutual Funds with Highest Returns: Rs 3.5 lakh invested in No. 1 fund has grown to Rs 12.66 lakh in just 5 years

    July 2, 2025
    Stay In Touch
    • Facebook
    • Twitter
    • Pinterest
    • Instagram
    • YouTube
    • Vimeo
    EDITOR'S PICK

    Perthshire firm ships home kits to Falklands

    October 18, 2024

    Is Coinbase Global, Inc. (NASDAQ:COIN) The Most Popular Stock Among Mutual Funds According To Goldman Sachs?

    October 10, 2024

    Mutual fund folio growth drags to 23.45 Crore in March 2025

    April 16, 2025
    Our Picks

    Mutual funds are taking cash calls—but are they working?

    July 2, 2025

    Investing in CIBC mutual funds

    July 2, 2025

    How To Buy Direct Mutual Funds Online In India | Business News

    July 2, 2025
    Most Popular

    ₹10,000 monthly SIP in this debt mutual fund has grown to over ₹70 lakh in 23 years

    June 13, 2025

    ₹1 lakh investment in these 2 ELSS mutual funds at launch would have grown to over ₹5 lakh. Check details

    April 25, 2025

    ZIG, BUZZ, NANC, and KRUZ

    October 11, 2024
    © 2025 Fund Focus News
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.