UTI Arbitrage Fund invests in arbitrage opportunities to generate returns for the investors. The fund was launched in June 2006 and has been in existence for more than 15 years across different market cycles.
Mr. Sharwan Kumar Goyal manages the fund for the equity portion and Mr Amit Sharma for the debt portion. As of February 28, 2022, the fund has Assets Under Management (AUM) of Rs. 5,784 crores with TER (Total Expense Ratio) of 0.93% for Regular Plans and 0.34% for Direct Plans. The fund has an exit load of 0.25% if the investments are redeemed before 21 days of investment. However, investors can redeem 10% of the units without exit load.
The arbitrage spreads depend on market sentiments, interest rates, liquidity, etc. Such spreads converge to the spot market on the expiry date. The fund simultaneously trades in cash & futures markets to capitalize on the pricing inefficiencies between these two markets and generate returns for the investors. The investment portfolio stays hedged and is not impacted by the market movements.
Invest in UTI Arbitrage Fund - Features and Benefits
- The arbitrage mutual fund focuses on arbitrage opportunities across the cash and futures equity market. It must invest at least 65% in equities that stay hedged through reverse market positions for tax efficiency.
- One can conveniently invest in UTI Arbitrage Fund through the UTI Mutual Fund website and mobile app.
- Investments in arbitrage funds India can be made in a lump sum or through Systematic Investment Plans (SIPs).
- Invest for an amount as low as Rs. 5,000 for the Growth option and Income Distribution cum Capital Withdrawal (ICDW) option.
- The arbitrage funds return carries a special tax rate of 15% for Short-Term Capital Gains (STCG) and 10% for Long-Term Capital Gains (LTCG). Additionally, in aggregate, LTCG up to Rs. 1 lakh a year from equity shares and equity funds is exempt.
|Period||Fund Performance Vs Benchmark (CAGR)||Growth for Rs 10,000 /-|
|NAV (%)||NAV (Rs)|
Different plans have a different expense structure. The performance details provided herein are of a regular plan. *Compounded annualized Growth Rate. Mr. Ankit Agarwal manages 2 domestic schemes of UTI Mutual Fund. The performance of the benchmark is calculated using total return index variant of the benchmark index. *Inception date: April 07, 2004
"Different plans have a different expense structure. The performance details provided herein are of Regular plan." * CAGR - Compounded annualized Growth Rate
Frequently asked questions
What is an Arbitrage Fund?
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.
What is UTI Arbitrage Fund?
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.
How are the returns of UTI Arbitrage Fund?
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
What is the current NAV of UTI Arbitrage Fund?
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
How is UTI Arbitrage Fund taxed?
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.
What is the investment objective of UTI Arbitrage Fund?
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.
What is Canserv feature in UTI Arbitrage Fund?
- 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.
How do I invest in UTI Arbitrage Fund?
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.