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Hybrid

Best Arbitrage Mutual Funds in India

Category Snapshot

Total Funds
129In category
3Y Return
+5.0%Annualized
Max Drawdown
-0.5%3Y qtr avg
Low Risk📆 Medium Term

Exploits cash-futures price differences with equity taxation benefit.

Best for:Capital PreservationRegular IncomeShort-Term Goals

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Understanding Arbitrage Fund Funds

Arbitrage funds exploit price differences between cash and futures markets, earning low-risk returns. They combine equity taxation benefits with debt-like safety, making them ideal for conservative investors seeking tax efficiency.

How to Choose Arbitrage Fund Funds

  • Compare expense ratios: even 0.2% difference matters significantly on these low-margin strategies.
  • Check rolling returns: Arbitrage funds should show consistent 4-6% returns with <1% volatility.
  • Evaluate fund stability: diversified arbitrage opportunities across sectors perform better than concentrated strategies.
  • Ask Qopilot: 'What are the best Arbitrage funds?' or 'How does Arbitrage compare to Liquid funds?'

Frequently Asked Questions

What is arbitrage in mutual funds?

Arbitrage exploits price differences between cash (spot) and futures markets. Funds buy in cash market and sell in futures, pocketing the difference.

Are Arbitrage funds safe?

Very safe. They carry minimal market risk because profits come from price differentials, not market direction.

How much return should I expect?

Typical returns are 4-6% annually. Lower than equity but higher than debt funds, with minimal volatility.

Why use Arbitrage funds instead of Liquid funds?

Arbitrage offers better returns (4-6% vs 5-6% Liquid) with equity taxation benefits and similarly low risk.

Important Disclaimer

Mutual fund investments are subject to market risks, read all scheme related documents carefully. Category metrics, comparisons, and AI insights on Qonfido are for educational and informational purposes only. They do not constitute personalized financial advice from a SEBI-registered advisor. Assess your risk appetite and consult a qualified professional before investing.