Step by step guide to invest in Bajaj Finserv Arbitrage Fund

Step by step guide
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Arbitrage has emerged as an intriguing approach for succeeding in the equity markets. Arbitrage funds, such as the Bajaj Finserv Arbitrage Fund, capitalise on the price differentials between different markets – mainly the cash and derivatives segments – to yield potential returns.

Arbitrage funds seek to offer potential for relatively stable returns, which are often not correlated with broader market trends. Since arbitrage strategies tend to be more conservative, these funds are suitable for investors who prioritise limited impact on capital alongside modest returns. While not entirely risk-free, arbitrage funds can often provide a buffer against market volatility.
In essence, these instruments exploit pricing gaps by buying securities at a lower price in one market and selling them at a higher price in another, thus taking advantage of market inefficiencies.

  • Table of contents
  1. Understanding Bajaj Finserv Arbitrage Fund
  2. How to invest in Bajaj Finserv Arbitrage Fund?
  3. FAQ

Understanding Bajaj Finserv Arbitrage Fund

Now, let's look at the details and nuances of the Bajaj Finserv Arbitrage Fund. Whether you are a seasoned investor or someone taking their first steps into the world of mutual funds, this Bajaj Finserv Arbitrage Fund investment guide is designed to equip you with the knowledge needed to make informed decisions.

Scheme overview: Bajaj Finserv Arbitrage Fund is an open-ended scheme, strategically designed to seize arbitrage opportunities in both the cash and derivatives segments of the equity markets. Managed by the Bajaj Finserv Asset Management Limited, this fund positions itself as a suitable option for investors seeking a balanced and dynamic portfolio.

At its core, the fund's goal is to generate potential returns by exploiting arbitrage opportunities while maintaining a balance through investments in debt and money market instruments. However, it's essential to acknowledge that, like any investment, there is no assurance that the fund's objectives will be met.

Brief Asset allocation: The fund's asset allocation pattern is a crucial aspect of its strategy. Divided between equity and equity-related instruments (ranging from 65% to 100%) and debt and money market instruments (up to 35%), this diversification aims to optimise the return potential while managing associated risks.

The fund manager adopts a market-neutral stance, executing deals simultaneously in both cash and derivatives markets, thereby minimising the risks associated with market fluctuations. Adhering to SEBI guidelines, the fund refrains from engaging in short selling in the cash market, ensuring a conservative and compliant approach.

Risk profile: Investors must understand the risks associated with the fund. From market risk to liquidity risk, price risk, settlement risk, and credit risk, comprehending these elements is crucial for informed decision-making. The fund has a low risk associated with it.

Benchmark index: The fund's performance is benchmarked against the Nifty 50 Arbitrage Index (TRI), providing investors with a comparative metric to assess its relative success.

How to invest in Bajaj Finserv Arbitrage Fund?

Investors have the flexibility to choose between two plans – Bajaj Finserv Arbitrage Fund (Direct Plan) and Bajaj Finserv Arbitrage Fund (Regular Plan). Within these plans, two options are available – Growth Option and Income Distribution cum Capital Withdrawal (IDCW) Option. These choices empower investors to align their investment strategy with their financial goals.

Here are the steps to invest in Bajaj Finserv Arbitrage Fund:

  • Selecting the right plan and option: Begin by understanding your financial goals and risk tolerance. Choose between the direct and regular plans and evaluate the growth and income distribution cum capital withdrawal options accordingly.
  • KYC and account setup: Completing the Know Your Customer (KYC) process is mandatory. Once done, set up an account with Bajaj Finserv Mutual Fund through their online portal or authorised distributors.
  • Fund allocation: Determine the amount you wish to invest and allocate it to the chosen plan and option.
  • Regular monitoring: Stay proactive by regularly monitoring the performance of the fund and staying informed about market dynamics. Periodic reviews enable you to make necessary adjustments based on your evolving financial goals.
  • Seek professional advice: While this guide provides a comprehensive overview, it's crucial to seek advice from financial advisors or distributors. Their expertise can provide tailored insights based on your unique financial situation.


Bajaj Finserv Arbitrage Fund presents a strategic opportunity for investors seeking a balanced yet dynamic investment portfolio. By understanding the scheme dynamics, investment strategies, and following a step-by-step approach, investors can make an informed decision about investing in this scheme. As with any investment, seeking advice from financial advisors or distributors is advisable, ensuring sound decisions in the pursuit of wealth generation.


What is an arbitrage fund?
An arbitrage fund is a type of mutual fund that seeks to profit from the price differences of an asset in different markets.

How can I invest in Bajaj Finserv Arbitrage Fund?
You can invest in the fund by completing all the KYC formalities and using the Bajaj Finserv Mutual Fund portal/app or through the distributors.

Which type of investor should consider the Bajaj Finserv Arbitrage Fund?
The fund can be suitable for investors seeking to invest in low risk/low to moderate risk opportunities and those interested in market-neutral strategies.

What are some arbitrage strategies used by the Bajaj Finserv Arbitrage Fund?
Some of the arbitrage strategies used by the Bajaj Finserv Arbitrage Fund include Cash-Future Arbitrage, Dividend Arbitrage, and Nifty Spot-Nifty Futures. Please refer the Scheme Information Document for more information in this regard.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.