{"id":10708,"date":"2025-06-05T11:33:03","date_gmt":"2025-06-05T11:33:03","guid":{"rendered":"https:\/\/navia.co.in\/blog\/?p=10708"},"modified":"2026-08-06T12:38:19","modified_gmt":"2026-08-06T12:38:19","slug":"what-are-arbitrage-funds","status":"publish","type":"post","link":"https:\/\/navia.co.in\/blog\/what-are-arbitrage-funds\/","title":{"rendered":"What are Arbitrage Funds?\u00a0"},"content":{"rendered":"<ul><li><a class=\"aioseo-toc-item\" href=\"#what-are-arbitrage-funds\">What are Arbitrage Funds?<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#how-do-arbitrage-funds-work\">How Do Arbitrage Funds Work?<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#benefits-of-arbitrage-funds\">Benefits of Arbitrage Funds<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#list-of-top-arbitrage-funds\">List of Top Arbitrage Funds<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#things-to-consider-before-investing-in-arbitrage-funds\">Things to Consider Before Investing in Arbitrage Funds<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#who-should-invest-in-arbitrage-funds\">Who Should Invest in Arbitrage Funds?<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#final-thoughts\">Final Thoughts<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#frequently-asked-questions\">Frequently Asked Questions<\/a><\/li><\/ul>\n\n\n<blockquote style=\"border-left:4px solid #e8622f;background:#fdf1ec;padding:18px 22px;margin:1.5em 0;line-height:1.8\"><strong>\ud83d\udca1 Quick Answer<\/strong><br>An arbitrage fund is a mutual fund scheme that profits from short-term price differences between the cash and futures markets. The fund manager buys a stock in the cash market and simultaneously sells its futures contract, locking in the spread when both prices converge at expiry. Returns are low but relatively stable.<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">\u201cIf You Don&#8217;t Find a Way to Make Money While You Sleep, You Will Work Until You Die.\u201d &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">These are the words of Warren Buffet from his rare interviews in 2017.&nbsp;He means the power of passive income and tells everyone to allow their money to work through stocks, dividends, and mutual funds. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Mutual funds offer a wide range of options to control every investor\u2019s risk appetite. Among them, <strong>arbitrage funds<\/strong> stand out as a unique hybrid category because that leverages price differences in different markets to generate returns. In this blog, we\u2019ll explain <strong>what are arbitrage funds, <\/strong>how they work, benefits, and who should consider investing in them in detail.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-1\" id=\"what-are-arbitrage-funds\" style=\"color:#023368\">What are Arbitrage Funds?&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Before diving into the deep <strong>meaning of arbitrage funds, <\/strong>you have to understand how the cash and futures market operate. &nbsp;<\/p>\n\n\n\n<ul style=\"margin:1em 0;line-height:1.9\">\n<li style=\"margin-bottom:0.8em;line-height:1.8\"><strong>Cash Market:<\/strong> Regular buying and selling of stocks at their current price are also known as spot prices.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\"><strong>Futures Market:<\/strong> It involves contracts to buy or sell the same stocks at a future date for a fixed price.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">There is a price difference between these two markets, at that time <strong>arbitrage opportunity <\/strong>arose. For example, if a stock is trading at \u20b9100 in the cash market and \u20b9103 in the futures market, the trader can buy it at \u20b9100 and sell it in the future market at \u20b9103. Here he locks a profit of \u20b93 per share and is risk-free. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\"><strong>So, arbitrage funds are a type of mutual fund scheme that focuses on these short-term price differences between cash and future markets to make profits. &nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">SEBI groups arbitrage funds under the hybrid category. For the wider family, see our guide to <a href=\"https:\/\/navia.co.in\/blog\/what-are-hybrid-mutual-funds\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=mutual_funds\">hybrid mutual funds<\/a>. &nbsp;<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-fe48e5de wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-white-color has-text-color has-background has-link-color wp-element-button\" href=\"https:\/\/navia.co.in\/app.html\" style=\"background-color:#ec4d37\"><strong>Get Navia APP<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-2\" id=\"how-do-arbitrage-funds-work\" style=\"color:#023368\">How Do Arbitrage Funds Work?&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Arbitrage funds work by buying a stock in the cash market and simultaneously selling the same quantity in the futures market, then holding both legs until expiry when the two prices converge. Let\u2019s break down the process of generating funds through arbitrage funds with a simple example. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\"><strong>Example; <\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">A stock named XYZ trading at \u20b9500 in the cash market and trading in futures market at \u20b9510. The fund manager buys XYZ stock at \u20b9500 in the cash market simultaneously sells the same quantity in the futures market at \u20b9510. It is considered the classic arbitrage trade; they are buying low (cash) and selling high (futures) to lock in a price difference. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">At the time of expiry,&nbsp;the arbitrage trade settles as follows: &nbsp;The fund manager had bought XYZ stock at \u20b9500 in the cash market and sold its futures at \u20b9510. By expiry, both the cash and futures prices converge to \u20b9505. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">The futures contract settles at \u20b9505, giving a profit of \u20b95 (\u20b9510 \u2013 \u20b9505). If the stock is also sold at \u20b9505, it yields another \u20b95 profit (\u20b9505 \u2013 \u20b9500). Thus, the total arbitrage gain is \u20b910 per share, locked in by the price difference at the time of the trade.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-3\" id=\"benefits-of-arbitrage-funds\" style=\"color:#023368\">Benefits of Arbitrage Funds&nbsp;<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Terms<\/strong>&nbsp;<\/td><td><strong>Definition<\/strong>&nbsp;<\/td><\/tr><tr><td>Low Risk&nbsp;<\/td><td>Through this process the action of buying and selling happen simultaneously, so the market risk is minimal.&nbsp;<\/td><\/tr><tr><td>Suitable for Volatile Markets&nbsp;<\/td><td>The increasing volatility will create more opportunities for price mismatches, which arbitrage funds can exploit effectively. &nbsp;<\/td><\/tr><tr><td>Tax Efficiency&nbsp;<\/td><td>It is like equity funds, which means short-term (less than 1 year) capital gains are taxed at 15% and long term (more than 1 year) are taxed at 10%. &nbsp;<\/td><\/tr><tr><td>Quick Profits&nbsp;<\/td><td>Arbitrage trades are short-term, and they settle quickly, so the traders can realize the gains in a short amount of time. &nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-4\" id=\"list-of-top-arbitrage-funds\" style=\"color:#023368\">List of Top Arbitrage Funds&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Here you can see some of the <strong>best arbitrage funds <\/strong>based on AUM (assets under management), and past performance. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">NAV &amp; Returns data as on 04-Jun-25&nbsp;*Source: Moneycontrol &nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Scheme Name<\/strong>&nbsp;<\/td><td><strong>Aum (Cr)<\/strong>&nbsp;<\/td><td><strong>6 M<\/strong>&nbsp;<\/td><td><strong>1 Yr<\/strong>&nbsp;<\/td><td><strong>5 Yr<\/strong>&nbsp;<\/td><td><strong>10 Yr<\/strong>&nbsp;<\/td><\/tr><tr><td>Kotak Equity Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>63,309.51&nbsp;<\/td><td>3.73%&nbsp;<\/td><td>7.53%&nbsp;<\/td><td>6.31%&nbsp;<\/td><td>6.52%&nbsp;<\/td><\/tr><tr><td>Invesco India Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>20,029.39&nbsp;<\/td><td>3.67%&nbsp;<\/td><td>7.48%&nbsp;<\/td><td>6.36%&nbsp;<\/td><td>6.49%&nbsp;<\/td><\/tr><tr><td>Bandhan Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>8,656.28&nbsp;<\/td><td>3.72%&nbsp;<\/td><td>7.51%&nbsp;<\/td><td>6.13%&nbsp;<\/td><td>6.40%&nbsp;<\/td><\/tr><tr><td>Edelweiss Arbitrage Fund Direct Pan Growth&nbsp;<\/td><td>14,307.17&nbsp;<\/td><td>3.73%&nbsp;<\/td><td>7.48%&nbsp;<\/td><td>6.26%&nbsp;<\/td><td>6.60%&nbsp;<\/td><\/tr><tr><td>Nippon India Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>14,112.58&nbsp;<\/td><td>3.58%&nbsp;<\/td><td>7.30%&nbsp;<\/td><td>6.17%&nbsp;<\/td><td>6.53%&nbsp;<\/td><\/tr><tr><td>Aditya Birla Sun Life Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>15,895.77&nbsp;<\/td><td>3.78%&nbsp;<\/td><td>7.56%&nbsp;<\/td><td>6.15%&nbsp;<\/td><td>6.42%&nbsp;<\/td><\/tr><tr><td>SBI Arbitrage Opportunities Fund Direct Plan Growth&nbsp;<\/td><td>31,895.02&nbsp;<\/td><td>3.68%&nbsp;<\/td><td>7.36%&nbsp;<\/td><td>6.09%&nbsp;<\/td><td>6.26%&nbsp;<\/td><\/tr><tr><td>Axis Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>6,299.25&nbsp;<\/td><td>3.70%&nbsp;<\/td><td>7.42%&nbsp;<\/td><td>6.15%&nbsp;<\/td><td>6.50%&nbsp;<\/td><\/tr><tr><td>ICICI Prudential Equity Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>26,917.80&nbsp;<\/td><td>3.69%&nbsp;<\/td><td>7.47%&nbsp;<\/td><td>6.09%&nbsp;<\/td><td>6.41%&nbsp;<\/td><\/tr><tr><td>UTI Arbitrage Fund Direct Plan Growth&nbsp;<\/td><td>6,899.22&nbsp;<\/td><td>3.71%&nbsp;<\/td><td>7.43%&nbsp;<\/td><td>6.11%&nbsp;<\/td><td>6.38%&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Note: Returns are indicative and may vary. Make sure to review the most recent data before making any investment decisions. Comparing plans is easier once you understand <a href=\"https:\/\/navia.co.in\/blog\/direct-vs-regular-mutual-fund-which-is-better\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=mutual_funds\">direct versus regular mutual funds<\/a> and how <a href=\"https:\/\/navia.co.in\/blog\/what-is-xirr-in-mutual-funds\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=mutual_funds\">XIRR<\/a> measures your actual returns.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/open.navia.co.in\/index-navia.php?utm_source=Organic&amp;utm_medium=blog&amp;utm_campaign=blog&amp;utm_content=arbitrage_funds_CTA\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"149\" src=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC.png\" alt=\"Open a free Navia demat account to invest in arbitrage funds\" class=\"wp-image-9412\" style=\"max-width:100%;height:auto\" srcset=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC.png 1024w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC-300x44.png 300w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC-150x22.png 150w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC-768x112.png 768w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-5\" id=\"things-to-consider-before-investing-in-arbitrage-funds\" style=\"color:#023368\">Things to Consider Before Investing in Arbitrage Funds<\/h2>\n\n\n\n<ul style=\"margin:1em 0;line-height:1.9\">\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Arbitrage funds offer relatively low but stable returns, so it is not suitable for investors who are seeking high growth.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">These funds perform better in volatile markets, where price differences between cash and futures segments are wider.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Arbitrage funds are taxed like equity <a href=\"https:\/\/navia.co.in\/blog\/category\/mutual-funds\/\">mutual funds<\/a> in India; short-term capital gains (STCG) are taxed at 15%, and long-term gains (LTCG) over \u20b91 lakh are taxed at 10%.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">It is an ideal option for short-term investment horizon (3\u201312 months) also they can earn better post-tax returns than savings<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Some funds may charge an exit load if redeemed before a specific period, so, always check the scheme details before investing.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">If you want steady income rather than a parking place for surplus cash, <a href=\"https:\/\/navia.co.in\/blog\/what-is-a-fixed-income-mutual-fund\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=mutual_funds\">fixed income mutual funds<\/a> are the closer fit. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-6\" id=\"who-should-invest-in-arbitrage-funds\" style=\"color:#023368\">Who Should Invest in Arbitrage Funds?&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Arbitrage funds suit risk-averse investors who want equity-like tax treatment with low market risk, and who have short-term surplus cash to deploy. Arbitrage funds are suitable for the following types of investors; &nbsp;<\/p>\n\n\n\n<ul style=\"margin:1em 0;line-height:1.9\">\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Risk-averse investors who want equity-like benefits with lower market risk<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Investors who looking to get short-term surplus funds for 3-6 months<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">The investors who need higher tax slabs than traditional debt instrument<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">They want to diversify their portfolio with low risk<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-7\" id=\"final-thoughts\" style=\"color:#023368\">Final Thoughts&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">To sum up,<strong> what are arbitrage funds<\/strong>? They are a smart blend of low-risk strategy and tax efficiency and offer safe trading in a volatile market. But they don\u2019t promise extraordinary returns, but they are considered a great short-term investment tool. If you want to invest safely without compromising tax advantages and risk appetite arbitrage is the best solution for you. Just be sure to assess fund performance, exit load terms, and your <a href=\"https:\/\/navia.co.in\/blog\/category\/investments\/\">investment<\/a> horizon before diving in.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Looking for low-risk investment options with better tax efficiency? Explore arbitrage funds on the <strong><a href=\"https:\/\/navia.co.in\/\" data-type=\"link\" data-id=\"https:\/\/navia.co.in\/\">Navia<\/a><\/strong> App today and make the most of market opportunities with minimal volatility. &nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-color has-link-color wp-elements-8\" id=\"key-takeaways\" style=\"color:#ec4d37\">Key Takeaways<\/h3>\n\n\n\n<ul style=\"margin:1em 0;line-height:1.9\">\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Arbitrage funds profit from the gap between a stock&#8217;s cash market price and its futures price, not from market direction.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Both legs are opened at the same time, so directional market risk is minimal.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">The gain is locked in at trade time and realised when cash and futures prices converge at expiry.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">They are taxed like equity funds in India and perform best when markets are volatile.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Best suited to risk-averse investors parking short-term surplus, not to those chasing high growth.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><strong>Do You Find This Interesting?<\/strong><\/p>\n\n\n\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-8f761849 wp-block-group-is-layout-flex\">\n<p class=\"wp-block-paragraph\">We\u2019d Love to Hear from you-<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/form.typeform.com\/to\/bpQ8ZlDc\"><img decoding=\"async\" width=\"300\" height=\"64\" src=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1.png\" alt=\"feedback yes or no button\" class=\"wp-image-8901\" style=\"max-width:100%;height:auto\" srcset=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1.png 300w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1-150x32.png 150w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><\/figure>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-9\" id=\"frequently-asked-questions\" style=\"color:#023368\">Frequently Asked Questions<\/h2>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">Can an arbitrage fund give negative returns?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Yes, arbitrage funds can give negative returns in rare cases, especially during extreme market volatility or if arbitrage opportunities fail to materialize. &nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">What is the difference between Arbitrage funds and Hedge Funds?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\"><strong>Arbitrage funds<\/strong> exploit price differences between cash and futures markets for low risk returns, mainly in mutual fund format.&nbsp;<br><strong>Hedge funds<\/strong> use aggressive, high-risk strategies across asset classes to generate high returns and are meant for high-net-worth investors.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">How does an Arbitrage Fund work?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">An arbitrage fund works by exploiting price differences between the cash and futures markets\u2014buying stocks in the cash market and simultaneously selling them in the futures market. The fund locks in a risk-free profit when both prices converge at expiry.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">What is the minimum amount required to invest in an Arbitrage Fund?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">The minimum amount to invest in an arbitrage fund typically starts at \u20b9500 to \u20b91,000 for SIPs and around \u20b95,000 for lump-sum investments. However, it may vary depending on the mutual fund.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">How safe is the arbitrage fund investment?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Arbitrage fund investments are relatively safe as they exploit price differences between markets with minimal directional risk. &nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">Who can invest in arbitrage funds?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Arbitrage funds are ideal for conservative investors seeking low-risk, short-term investments with better tax efficiency.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">What is the benefit of investing in Arbitrage funds?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Arbitrage funds offer low risk returns by exploiting price differences between cash and futures markets, and they are also tax efficient.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:13px;line-height:1.6;color:#777\"><strong>DISCLAIMER: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Brokerage will not exceed the SEBI prescribed limit.<\/strong> Full disclaimer: https:\/\/bit.ly\/naviadisclaimer.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ud83d\udca1 Quick AnswerAn arbitrage fund is a mutual fund scheme that profits from short-term price differences between the cash and futures markets. The fund manager buys a stock in the cash market and simultaneously sells its futures contract, locking in the spread when both prices converge at expiry. Returns are low but relatively stable. \u201cIf [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10712,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ub_ctt_via":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[209],"tags":[560,485,529,561,23],"class_list":["post-10708","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mutual-funds","tag-arbitrage-funds","tag-capital-gains-tax","tag-future-trading","tag-hybrid-mutual-funds","tag-mutual-funds"],"aioseo_notices":[],"featured_image_src":"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/06\/What-are-Arbitrage-Funds.png","author_info":{"display_name":"Navia Markets","author_link":"https:\/\/navia.co.in\/blog\/author\/tradeplusonline\/"},"jetpack_featured_media_url":"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/06\/What-are-Arbitrage-Funds.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/10708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/comments?post=10708"}],"version-history":[{"count":8,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/10708\/revisions"}],"predecessor-version":[{"id":18943,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/10708\/revisions\/18943"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/media\/10712"}],"wp:attachment":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/media?parent=10708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/categories?post=10708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/tags?post=10708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}