Invest in Best Arbitrage Mutual Funds in India for 2026
Explore the list of top-performing arbitrage mutual funds schemes curated by our experts
Best Arbitrage Funds in India
Arbitrage funds represent a unique investment strategy that helps investors navigate market volatility while minimising risk. These innovative mutual funds capitalise on price differences between various market segments, offering a distinctive approach to wealth creation. By strategically exploiting temporary market inefficiencies, arbitrage funds provide investors with a sophisticated yet relatively stable investment option.
You would have got
Total Investment
₹ 1200
Expected Returns
₹ 39
Total Value
₹ 1239
Past performance doesn’t assure future results; actual outcome may vary due to market dynamics.
Your Investment Amount
- 1
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per annum
Understanding Arbitrage Funds
How do Arbitrage Funds Work?
Arbitrage funds employ a sophisticated investment strategy that involves simultaneously buying and selling securities in different markets to profit from price discrepancies. Fund managers meticulously identify and exploit temporary price variations across cash, derivatives, and other market segments.
Key Factors:
- Identifying price differences across markets
- Executing near-simultaneous trades
- Capturing minimal but consistent price differentials
- Minimising overall market risk
Arbitrage Funds FAQs
Arbitrage funds are mutual fund schemes that aim to generate returns by simultaneously buying and selling securities in different markets to profit from temporary price differences. These funds typically invest in equity and arbitrage opportunities across cash, futures, and derivative markets.
Arbitrage funds are considered relatively low-risk investment options. They aim to provide returns with minimal market exposure by simultaneously buying and selling securities. However, like all market-linked investments, they are not entirely risk-free and can be affected by market conditions.
Arbitrage funds generate returns by exploiting price inefficiencies between various market segments. Fund managers identify and execute trades that capture small price differentials across cash, derivative, and other financial markets, creating a market-neutral investment strategy.
Historically, arbitrage funds have delivered returns in the range of 6-8% annually. Returns can vary based on market volatility, arbitrage opportunities, and overall economic conditions. Past performance does not guarantee future results.
Yes, most arbitrage funds offer SIP options. This allows investors to:
- Invest small amounts regularly
- Benefit from rupee cost averaging
- Build investment discipline
- Reduce the impact of market volatility
Arbitrage funds differ from other mutual funds by focusing on price differentials between market segments rather than direct stock appreciation. They tend to be lower-risk compared to equity funds and offer better tax efficiency than debt funds.
The investment amount will largely depend on:
- Your personal financial goals
- Risk tolerance
- Overall investment portfolio strategy
Arbitrage funds are ideal for investors seeking:
- Stable, low-risk investment options
- Protection against market volatility
- Alternative to traditional debt instruments
- Tax-efficient equity-oriented investments
Financial experts recommend an investment horizon of 2-3 years for arbitrage funds. This duration allows investors to potentially benefit from multiple market cycles and arbitrage opportunities.
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