Frequently asked questions
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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.
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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.
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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
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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
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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.
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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.
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- 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.
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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.