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The fund seeks to generate return through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment
- An open ended scheme investing in arbitrage opportunities in the equity segment.
- The Arbitrage Fund follows a strategy to take advantage of the arbitrage opportunities arising out of the price difference between the cash and derivative market of the equity segment on a market neutral basis.
- The fund manager depending on the available opportunities takes exposure in equity segment along with respective F&O position.
- The balance portion of the portfolio is invested in FDs, debt instruments, money market instruments and/or in units of debt funds of Mutual Funds.
(A) Redemption / Switch out within 15 days from the date of allotment – 0.25 %
(B) Redemption / Switch out after 15 days from the date of allotment – NIL
Any redemption/switchout of units would be done on First in First out (FIFO) basis
SWP/SIP/STP
Not Applicable
(1) Under normal market circumstances, the investment range would be as follows: Equity and equity related instruments: 65-100% (Medium to High) Derivatives including Index Futures, Stock Futures, Index Options and Stock Options*: 65-100% (Medium to High) Money Market, Debt instruments, Securitized debt# and call money: 0-35% (Low to Medium) (2) The asset allocation under defensive circumstances would be as follows: Equity and equity related instruments: 0-65% (Medium to High) Derivatives including Index Futures, Stock Futures, Index Options and Stock Options*: 0-65% (Medium to High) Money Market, Debt instruments, Securitized debt# and call money: 35-100% (Low to Medium) #The fund may invest up to 50% of its debt portfolio in securitized debt * The exposure to derivative shown in the above asset allocation tables is the exposure taken against the underlying equity investments and should not be considered for calculating the total asset allocation. The idea is not to take additional asset allocation with the use of derivatives. The notional value exposure in derivatives securities would be reckoned for the purposes of the specified limits. The margin money deployed on these positions would be included in the Money Market/Debt category.
The objective of the scheme is to generate capital appreciation through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment and by deployment of surplus cash in debt securities and money market instruments.
However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
The fund seeks to generate return through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment
An open ended scheme investing in arbitrage opportunities in the equity segment
- The Fund follows a strategy to take advantage of the arbitrage opportunities arising out of the price difference between the cash and derivative market
- The Fund will endeavour to enhance returns through arbitrage between spot and futures equity markets
- The fund manager will evaluate the difference between the price of a stock in the futures market and in the spot market on a market neutral basis.
- The balance portion of the portfolio is invested in FDs, debt instruments, money market instruments and/or in units of debt funds of Mutual Funds
This product is suitable for investors who are seeking*:
- Capital appreciation over medium to long term.
- Takes advantage of arbitrage opportunities in cash and derivative market without taking any directional/ unhedged position in either equity or derivative instruments.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
- Investors looking to take advantage of the arbitrage opportunities in the equity markets
- Ideal for investment with a time horizon of preferably, 3 months or above
- Investors looking for alternate to liquid and bank deposits
An open ended scheme investing in arbitrage opportunities in the equity segment
UTI Arbitrage Fund is an equity-oriented mutual fund that aims to generate returns by taking advantage of price differences between the cash (spot) and derivatives (futures) markets. Instead of predicting market direction, the fund locks in these price gaps through simultaneous buy and sell positions.
Because these positions are fully hedged, the fund reduces the impact of market volatility. It also maintains a minimum 65% exposure to equity (arbitrage positions), which allows it to qualify for equity taxation.
The fund identifies situations where a stock is priced differently in the cash market and the futures market. It buys the stock in one market and sells it in the other at the same time, locking in the difference as potential return.
As the prices converge (which they typically do by expiry), the spread gets realised. Since both positions are taken together, the strategy does not depend on whether the market goes up or down, making it relatively low-risk compared to traditional equity funds.
No, investment is not completely risk-free. However, arbitrage funds are generally considered relatively low-risk because they follow a hedged strategy. That said, returns may vary depending on the availability of arbitrage opportunities, market liquidity, and short-term interest rates. There can also be temporary fluctuations in very short holding periods.
While you can invest for shorter durations, a minimum horizon of 3 months or more is generally recommended.
Over very short periods, returns can fluctuate slightly, but as the holding period increases, the volatility tends to reduce significantly. This makes arbitrage funds suitable for at least 3–6 months period , often extending up to a year for more consistent outcomes.
This fund may be suitable for:
- Investors looking for a relatively low-risk investment option
- Investors who want to stay invested in an equity-oriented product without taking significant market risk
- Individuals looking to park surplus funds for short duration
The objective of the scheme is to generate capital appreciation through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment and by deployment of surplus cash in debt securities and money market instruments. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
Investors can simply log in to UTI Mutual Fund and start investing subject to KYC compliance. Investors may also approach nearest UTI Financial Centers (UFCs). Alternatively, you may also approach your mutual fund distributor, financial advisor or various online platform for investments.
A fund that simultaneously invest (buy in cash and sell in future) in the same stock in two different markets (cash / futures) aiming to generate low risk returns
Positions are fully hedged with no directional exposure, reducing the impact of market movements
Minimum 65% exposure to equity arbitrage with the balance invested in fixed income instruments
Fully hedged portfolio can potentially eliminate risks typically associated with directional equity exposure
The fund follows a market-neutral strategy by simultaneously buying and selling securities, thereby reducing directional risk. Along with arbitrage strategies, surplus funds are deployed in high-quality fixed income instruments.
Suitable for investors seeking capital appreciation over medium to long term.
Enjoys equity tax treatment, helping reduce post-tax impact compared to traditional fixed income investment options
The fund follows a market-neutral strategy by simultaneously buying and selling securities, thereby reducing directional risk. Along with arbitrage strategies, surplus funds are deployed in high-quality fixed income instruments.
Suitable for investors seeking capital appreciation over medium to long term.
Liquidity makes this fund suitable for short term parking of surplus money
The fund follows a market-neutral strategy by simultaneously buying and selling securities, thereby reducing directional risk. Along with arbitrage strategies, surplus funds are deployed in high-quality fixed income instruments.
Suitable for investors seeking capital appreciation over medium to long term.
Investments in high credit quality instruments with controlled duration
The fund follows a market-neutral strategy by simultaneously buying and selling securities, thereby reducing directional risk. Along with arbitrage strategies, surplus funds are deployed in high-quality fixed income instruments.
Suitable for investors seeking capital appreciation over medium to long term.