NJ Arbitrage Fund for Steady Returns with Low Volatility

Arbitrage Funds Carry Low Risk

In an arbitrage transaction, the gain in equity segment is protected against market movements

Illustration

The fund manager buys ABC Ltd. share at Rs. 300 in cash market and simultaneously sells it in the future market at Rs. 310
At month-end there are three likely scenarios

scenario 1

STOCK PRICE INCREASES
TO Rs 311

Gain in cash market is
311 – 300 = 11

Loss in futures segment is
310 – 311 = -1

Net Gain: 11 - 1 = 10

scenario 2

STOCK PRICE REMAINS
UNCHANGED AT Rs 300

Gain in cash market is
300 – 300 = 0

Gain in futures segment is
310 – 300 = 10

Net Gain: 10 + 0 = 10

scenario 3

STOCK PRICE FALLS
TO Rs 293

Loss in cash market is
293 – 300 = -7

Gain in futures segment is
310 – 293 = 17

Net Gain : 17 – 7 = 10

Investment Objective

The investment objective of the scheme is to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equity market and by investing the balance in debt and money market instruments.
However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

Why NJ Arbitrage Fund?

Lower volatility & riskSince equal and simultaneous positions are taken in cash and futures, there is low risk from share price fluctuations.

Tax-friendlyBeing equity-oriented, they are more tax-friendly than debt funds.

All weather mutual fundSince arbitrage opportunities are available across market phases, investors can invest in them regardless of market conditions.

Who Should Invest?

The fund is suitable for investors who

Investors looking for a stop gap arrangement before they systematically transfer funds (via STP) in an equity-oriented fund later when they believe it is the right time.

Investors with surplus funds looking for liquidity + tax efficient return will find these funds helpful.

Fund Features

Type of Scheme

An open ended scheme investing in arbitrage opportunities

Asset Allocation

Instrument	Indicative allocations (% of total assets)		Risk Profile
Instrument	Min	Max	High / Medium / Low
Equity & Equity related instruments	65%	100%	High to Very High
Debt and money market instruments*	0%	35%	Low to Medium

*TREPS, Government Repo/Reverse Repo (in Government Securities), Treasury bills, Government securities (Issued by both Central and State governments) and any other like instruments as specified by the Reserve Bank of India from time to time and approved by SEBI from time to time.

Benchmark Index

Nifty 50 Arbitrage Index

Plan & Options

Regular Plan & Direct Plan
Each Plan offers the Growth Option.

Minimum Amount

Lumpsum Investment: Rs. 5,000/- and in multiples of Re. 1/- thereof
Additional Application: Rs. 500/- and in multiples of Re. 1/- thereof
SIP Application: Rs.100/- and in multiples of Rs.1/- thereafter

Minimum Redemption Amount

There is no minimum redemption criteria

Entry Load

Not applicable

Exit Load

NIL

SIP/STP/SWP

Available

Fund Manager

Mr. Viral Shah
Mr. Dhaval Patel