Axis Arbitrage Fund

An arbitrage fund is a type of mutual fund that aims to exploit price differentials in different markets or instruments to generate returns. These funds typically buy and sell the same or similar securities simultaneously in different markets to profit from the price differences.

The Axis Arbitrage Fund is an open-ended scheme that invests in arbitrage opportunities. It aims to generate income through low volatility absolute return strategies by taking advantage of opportunities in the cash and derivative segments of the equity markets. The scheme also invests between10-35% of its total assets in debt and money market instruments.

Arbitrage funds work by generating profit from price differentials in the derivatives and cash (or spot) markets through simultaneous buy and sell transactions. For instance, an arbitrage fund could buy an asset in today's cash market and simultaneously sell it in the futures market at a higher price, thereby locking in its gain right away.

Arbitrage funds can be a suitable choice for investors who want to profit from volatile markets without taking on too much risk. They are relatively low risk, but the payoff can be unpredictable. These funds are taxed like equity funds, and investors need to keep an eye on expense ratios, which can be high.

Arbitrage funds are actively managed. Fund managers actively seek out and exploit arbitrage opportunities in different markets to generate returns.

Investing in the Axis Arbitrage Fund offers several benefits:
•    It utilizes the price differential in the cash and derivatives segment of the equity market to generate returns with relatively low volatility.
•    It seeks to capture the cash-futures spread in the equity market without being affected by market direction.
•    It can be suitable for parking short-term money
 

Choosing between equity funds and arbitrage funds depends on your risk tolerance and investment timeline. Arbitrage funds offer lower risk and for short to medium term objectives, while equity funds unlock the potential for higher returns but demand a longer horizon and tolerance for volatility.

You can invest via Website or Mutual Fund App

Arbitrage funds are taxed like equity funds. If you hold the investment for more than one year, the gains are subject to long-term capital gains tax. If held for less than a year, short-term capital gains tax applies

The minimum investment required for the Axis Arbitrage Fund is ₹500 for both lump sum and additional investments. The minimum SIP (Systematic Investment Plan) amount is ₹100

Yes, the Axis Arbitrage Fund allows for Systematic Transfer Plan (STP), Systematic Investment Plan (SIP), and Systematic Withdrawal Plan (SWP)

The Axis Arbitrage Fund has an exit load of 0.25% if redeemed within 15 days from the date of investment/allotment. If redeemed/switched out after 15 days from the date of allotment, there is no entry load.

Arbitrage funds can be suitable for investors looking for relatively low-risk investment options to park their short-term money. They are ideal for cautious investors, active investors, and those who want to keep an emergency fund.

Arbitrage funds can be considered relatively safer as they aim to exploit price differentials in different markets, which typically involves lower risk compared to other equity investments.