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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
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.
For subscriptions received w.e.f. March 6th , 2019, applicable Exit load: Redemption / Switch out within 21 days from the date of allotment – (i) NIL for upto 10% of the allotted Units (ii) 0.25 % for beyond 10% of the allotted Units.
Redeem/SIP/STRIP/Switch
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.
Arbitrage
An open ended scheme investing in arbitrage opportunities
• 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 for overall portfolio diversification - Investors who want growth with limited downside risk to their portfolio - Investors looking for tax efficient returns - Retirees looking for moderate and stable returns with low volatility - First time mutual fund investors
An open ended scheme investing in arbitrage opportunities in the equity segment
Arbitrage funds works on the mispricing opportunities of equity shares in the spot and futures market. Funds aims to takes advantage of the price differences between current and future securities to maximise return outcome. The fund manager simultaneously buys shares in the cash market and sells it in futures or derivatives markets. The difference in the cost price and the selling price is the return potential.
UTI Arbitrage Fund is an equity-oriented fund under in hybrid category that invests simultaneously in the an equity instrument in two different markets (cash and futures) to generate returns. The minimum exposure to equity in UTI Arbitrage Fund is 65% of the total asset while the balanced portion is invested into debt segment.
Over the last 1-year UTI Arbitrage Fund has generated 3.91% CAGR as against the benchmark index Nifty 50 Arbitrage Index of 3.93% CAGR as of September 30, 2021. The past performance may or may not be sustained in the future. For more details on performance click here
The NAV of UTI Arbitrage Fund - Regular Plan - Growth is Rs.27.9601 as of September 30, 2021. To view the NAV history of the fund click here
On redemption of investments of UTI Arbitrage Fund, capital gains are taxed as below: The Fund will attract capital gains tax if the redemption value is more than the purchase price. The gains can either be short term or long term in nature. If the units are held for 3 years or less, the gains made are subject to Short-Term Capital Gains Tax (STCG) and are taxed as per the income slab. If the units are held for more than 3 years, the gains are subject to Long-Term Capital Gains Tax (LTCG) which is taxed at 20% with the benefit of indexation (available to debt-oriented funds). Indexation accounts for the effect of inflation in the acquisition purchase cost i.e., the purchase price is increased to adjust for inflation (as per the cost inflation index (CII) notified by the Central Board of Direct Taxes (CBDT)) before calculating the capital gain. Thus, it reduces the overall tax liability for the investor.
The investment objective of UTI Arbitrage Fund 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 Canserve feature in UTI Arbitrage Fund is a facility wherein investor can opt towards donating a part of their investment growth (Appreciation/ Income distribution) towards social cause.
- Contributions under "CanServe" facility will go to St. Jude India Childcare (NGO) as donation towards medical or social cause for needy and under-privileged children who are being treated for cancer and their families, during the period of the child's treatment. St. Jude India Childcare Centres, is a not-for-profit organization in India that provides free of charge shelter and holistic care to children who are undergoing cancer treatment along with their families.
- Investors may claim tax exemption under sec 80 G of the Income Tax Act, 1961 to this effect. St. Jude India Childcare Centres will issue certificate towards donation receipt to avail tax exemption under section 80 G of the IT Act, 1961.
Investors can invest online at UTI Mutual Fund website or download the mobile app and start investing subject to KYC compliance. Investors may also approach nearest UTI Financial Centres (UFCs). Alternatively, you may also approach your mutual fund distributor, financial advisor or various online platform for investments.