This Arbitrage Fund (Wholesale) Is Good For SIP, Offered 6.68% Returns On 3-Years SIP

Arbitrage funds are a type of mutual fund that is taxed similarly to equity funds. Even while arbitrage funds are generally low-risk, their payoffs are uncertain. The fund manager buys shares in the cash market and sells them in futures or derivatives markets at the same time in these funds, and the difference between the cost price and the selling price is the return earned by the investors.

HDFC Arbitrage Fund - Wholesale - Direct Plan-Growth

This Arbitrage Fund - Wholesale - is an open-ended medium-sized fund of its category launched by the HDFC Mutual Fund. It was launched on 07th April 2014. This fund has worth Rs 6675.5 crore Asset under Management (AUM). The Net Asset Value (NAV) of this scheme as of 02nd April 2022 is Rs 16.151. The scheme has an expense ratio of 0.4%, which is close but higher than its category average expense ratio. 

This mutual fund scheme seeks to generate income through arbitrage opportunities and debt & money market instruments. It is a low-risk fund. The benchmark of this fund is NIFTY 50 Arbitrage. For investment in this fund, the minimum investment amount required is Rs 5,000. Whereas, for SIP the minimum amount required is Rs 500. There is no lock-in period is in this fund. However, it charges 0.25% for redemption within 30 days of the investment.

Absolute And Annualised Returns

Lump-Sum Investment Returns

Since its launch, it has delivered 6.09% average annual returns.

Tenure	Absolute Returns	Annualised Returns
1 Year	4.17%	4.14%
2 Year	8.08%	3.95%
3 Year	14.79%	4.70%
5 Year	29.58%	5.32%
Since Inception	61.51%	6.09%

SIP Returns

Tenure	Absolute Returns	Annualised Returns
1 Year	2.15%	4.01%
2 Year	4.33%	4.14%
3 Year	6.69%	4.26%
5 Year	12.97%	4.83%

Portfolio

The fund is invested in equities to the tune of 68.73 per cent, with 44.03 per cent in large-cap companies, 19.43 per cent in mid-level stocks, and 4.3 per cent in small-cap stocks. The fund has a debt investment of 20.34 per cent, with 16.57 per cent in government securities and 3.77 per cent in funds with extremely low-risk securities.

The fund's equity portion is primarily invested in the Financial, Services, Energy, and Metals & Mining, Healthcare sectors. The debt portion of the fund has low credit quality indicating the quality of borrowers it has lent it to is not too great. 

The fund's top holdings are in Adani Ports and Special Economic Zone Ltd., Government of India, HDFC Liquid Fund - Direct Plan, Reserve Bank of India (RBI), and Adani Enterprises Ltd.

Disclaimer

Mutual fund investments are subject to market risk. Read all scheme-related documents, and Terms and Conditions carefully before investing. The above-mentioned information is purely informational and doesn't guarantee any return. The Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.