Bajaj Finserv Arbitrage Fund

NAV ₹10.415
as of 2024-04-26
HYBRID FUND
Regular-Growth
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Note: Historical Performance of this scheme is not available because this scheme has not completed 6 months since inception.
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Investment Objective

The investment objective of the scheme is to seek to generate returns by investing in arbitrage opportunities in the cash and derivatives segments of the equity markets and by investing balance in debt and money market instruments.

However, there is no assurance that the investment objective of the scheme will be achieved.

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Key Features

Inception Date

September 15 2023

Minimum Application Amount

Fresh subscription - Rs. 500/- and in multiples of Re. 1/-
Systematic Investment Plan (SIP):
From Rs. 500 up to Rs. 1,000: minimum 60 instalments.
Above Rs. 1,000: minimum 6 instalments.

Category of Scheme

Arbitrage Fund

Minimum Additional Application Amount

Rs. 100/- and in multiples of Re. 1/-

Type of Scheme

An open ended scheme investing in arbitrage opportunities.

Minimum Redemption Amount

Rs. 500 and in multiples of Re. 0.01/- or the account balance of the investor whichever is less.

Plan

Bajaj Finserv Arbitrage Fund – Direct Plan
Bajaj Finserv Arbitrage Fund – Regular Plan

Load Structure/Lock-In Period

Entry load – Not applicable
Exit load – 0.25% of applicable NAV if redeemed/switched out within 15 days from the date of allotment. Nil, if redeemed/switched out after 15 days from the date of allotment.

The scheme will not levy exit load in case the timelines for rebalancing portfolio as stated in SEBI circular dated March 30, 2022 is not complied with.

Options/Sub-Option

Growth option
Income Distribution cum Capital Withdrawal (IDCW) option will offer the following sub-options:
• Payout
• Reinvestment
• Transfer

Benchmark Index

Nifty 50 Arbitrage Index (TRI)

Face Value

₹10 / Unit

Asset Allocation Pattern

Under normal circumstances:
Equity and equity-related instruments including derivatives and stock options:
Maximum: 100%, Minimum: 65% (Risk profile - Very high)
Debt and money market instruments including the margin money deployed in derivative transactions (including units of liquid schemes of Bajaj Finserv Mutual Fund):
Maximum: 35%, Minimum: 0% (Risk profile - Low to moderate)
Non-convertible preference shares:
Maximum: 10%, Minimum: 0% (Risk profile: Very High)

Under defensive circumstances:
Equity and equity related instruments including derivatives and stock options:
Maximum: 65%, Minimum: 0% (Risk profile - High)
Debt and money market instruments including the margin money deployed in derivative transactions (including units of liquid schemes of Bajaj Finserv Mutual Fund):
Maximum: 100%, Minimum: 35% (Risk profile - Low to moderate)
Non-convertible preference shares:
Maximum: 10%, Minimum: 0% (Risk profile: Very High)

For detailed asset allocation, please refer to the Scheme Information Document.

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Who Should Invest?

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Risk-averse investors looking to their park surplus funds.

Investors who want to take advantage of equity taxation.

Investors looking for alternatives to overnight funds and savings bank deposits.

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Benefits

 

Low volatility advantage

Arbitrage index scores favourable on the risk parameters vis-a-vis equities.

No credit risk

The fund endeavors to negate the credit and duration risk by investing in short term debt instruments that are highly rated.

Equity taxation

Arbitrage funds offer a better tax advantage than debt funds.

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Fund Manager

Mr. Chetan Chavan (Equity portion)

Mr. Chavan joined Bajaj Finserv Asset Management Limited in March 2023. Mr. Chavan has over 20 years of work experience across various functions in Equity Dealing profile. Prior to BFAML, Mr. Chavan was earlier associated with Mahindra Manulife Investment Management Private Limited and Invesco Asset Management (India) Private Limited.

 

 



 

Mr. Ilesh Savla (Equity portion)

Mr. Savla joined Bajaj Finserv Asset Management Limited in April 2023. Mr. Savla has over 23 years of work experience across various functions in Equity Dealing and Sales Trading / Dealing profile. Prior to BFAML, Mr. Savla was associated with Reliance Nippon Life Insurance, Equirus Securities and Maybank KimEng Securities.

 

 



 

Mr.Siddharth Chaudhary: Senior Fund Manager- Fixed Income

Mr.Siddharth Chaudhary joined the Company in July 2022 as a Senior Fund Manager – Fixed Income. Prior to this, he was associated with Sundaram Asset Management Co. Ltd from April 2019 - July 2022 as Head Fixed Income – Institutional Business. From April 2017 – March 2019, he served as a Senior Fund Manager – Fixed Income, and from August 2010 – March 2017 as a Fund Manager – Fixed Income with Sundaram Asset Management Co. Ltd. During June 2006 – September 2010, he was working as Senior Manager, Treasury Dept in Indian Bank.

 

 

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Investment Style & Portfolio Strategy

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Predominantly invest in arbitrage opportunities between spot and futures prices of exchange traded equities.

Build market neutral positions that offer an arbitrage potential for e.g., buying the basket of index constituents in the cash or futures segment and selling the index futures.

Invests in high rated debt instruments of short term maturity. This can also be used as margin funding requirements for futures trade.

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Scheme Documents

 
Presentation ImageName
Application Form ImageName
Scheme Information Document (SID) ImageName
Key Information Document (KIM) ImageName
Statement of Additional Information (SAI) ImageName
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Bajaj Finserv Arbitrage Fund – Overview

Bajaj Finserv Arbitrage Fund is an open-ended scheme that invests in arbitrage opportunities in the cash and derivatives segments of equity markets. A portion of the portfolio may also be allocated to high-rated debt and money market instruments.
The scheme is suitable to risk-averse investors who want to park surplus funds in a relatively safe investment avenue or those looking for an alternative to savings accounts and overnight funds that can potentially offer reasonable returns. Arbitrage funds can also offer a tax advantage over debt funds.
The scheme has entails relatively low risk and aims to create a market neutral strategy that can find arbitrage potential in different conditions.

Individuals can invest in the Bajaj Finserv Arbitrage Fund via SIP or lumpsum. SIP investments start from Rs. 500.

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Frequently Asked Questions

 
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An arbitrage fund is an hybrid mutual fund that aims to profit from the price difference of the same asset between two markets. This could include buying an asset at a lower price in the spot market and selling it for higher in the derivatives market or capitalising on the price difference of an asset between two stock exchanges. The purchase and sale transactions are made simultaneously to benefit from brief pricing inefficiencies.

An arbitrage fund is suited to investors with a low-to-moderate risk appetite seeking to earn potentially reasonable returns over a short investment horizon.

No, earnings on arbitrage funds are subject to tax. Arbitrage funds are taxed as equity mutual funds. A short-term capital gains tax of 15% is levied on earnings held for less than year, while a long-term capital gains tax of 10% is levied on earnings held for less than year

Like all mutual funds, arbitrage funds are subject to market risks. However, they fall in the low-risk category. The instantaneous nature of arbitrage trades makes these funds less vulnerable to wider market trends.

No mutual fund investment is risk-free and equity funds are considered to carry greater risk than debt mutual funds. Additionally, flexi cap mutual funds may be more volatile than large cap funds, which tend to offer relatively stable returns because they invest in top-tier companies.
However, a skilled fund manager of a flexi cap fund will aim to mitigate risks by altering the allocation between the different market capitalisations based on the economic conditions and their insights.

Low volatality, no credit risk and benefits on equity taxation are some of the major advantages of Bajaj Finserv Arbitrage Fund.

This scheme can be a suitable option for risk-averse investors looking to park their surplus funds and those who are seeking an alternative to overnight funds.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.