September 22, 2022
mayank
Nippon India Arbitrage Fund
NAV Growth: Rs 23.2775
NAV IDCW Monthly: Rs 12.1832
NAV IDCW: Rs 14.3319
Suitable For Which Investors?
“Arbitrage funds invest in equity shares and derivatives, and earn their returns through the price differential between a stock and its futures. You can expect to earn better returns than what you would get from a bank account.
They are usually suitable to park your money for a period ranging between three months to a year. However, we believe that liquid funds, which have a similar risk-return payoff, are a better alternative for most investors for such a time frame. Arbitrage funds may have some appeal for those who are in the highest tax bracket, given the preferential tax treatment of these funds.
The risk of incurring a loss in these funds over the said time frame is low but they do not guarantee returns or safety of capital.
Remember, these funds usually deliver low returns which are only marginally higher than your bank account. They are not suitable if your aim is to build wealth in the long run.”
Fund’s Investment Strategy:
The scheme seeks to generate income by taking advantage of the arbitrage opportunities that potentially exists between cash and derivative market and within the derivative segment along with investments in debt securities & money market instruments.
Fund Manager:
1) Anand Devendra Gupta
Education: Mr. Gupta is B.Com and PGDBA
Experience: Prior to joining Nippon India Mutual Fund he has worked with ICICI Prudential AMC and Refco – Sify Securities Pvt. Ltd.
2) Anju Chhajer
Education: Ms. Chhajer is a B.Com (H) and a Chartered Accountant.
Experience: Prior to joining Nippon India Mutual Fund Ltd. as a fund manager, she has worked with National Insurance Company as a Money Maker Instruments and D.C Dharewa & Co.
Investment Details
| Min. Investment (Rs) | 5,000 |
| Min. Addl Investment (Rs) | 1,000 |
| Min. SIP Investment (Rs) | 100 |
| Min. Withdrawal (Rs) | 100 |
| Min. No of Cheques | 60 |
| Min. Balance (Rs) | 1 |
| Lock-in Period | NA |
| Exit Load | 0.25% for redemption within 30 days |
Basic Details
| Fund House | Nippon India Mutual Fund |
| Launch Date | 01-Jan-13 |
| Return Since Launch | 6.92% |
| Benchmark | NIFTY 50 Arbitrage TRI |
| Riskometer | Low |
| Type | Open-ended |
| Assets | Rs 9,331 Cr |
| (As on 31-Aug-2022) | |
| Expense Ratio | 0.34% |
| (As on 31-Jul-2022) | |
| Risk Grade | Below Average |
| Return Grade | High |
| Turnover | 1175.00% |
Nippon India Arbitrage Fund Trailing Returns (%)
| Fund name | YTD | 1D | 1M | 3M | 6M | 1Y | 3Y | 5Y | 7Y | 10Y |
| Nippon Ind Arbtg Dir | 3.04 | 0.03 | 0.5 | 0.99 | 2.15 | 4.27 | 4.75 | 5.72 | 6.01 | — |
| CCIL T Bill Liquidity Weight | 1.51 | 0.03 | 0.23 | 0.76 | 1.1 | 2.07 | 2.58 | 3.24 | 3.6 | — |
| Hybrid: Arbitrage | 2.81 | 0.03 | 0.48 | 0.92 | 2.01 | 3.87 | 4.37 | 5.24 | 5.75 | — |
| Rank within category | 7 | 10 | 11 | 9 | 7 | 6 | 6 | 1 | 2 | — |
| Number of funds in category | 25 | 26 | 26 | 25 | 25 | 25 | 23 | 17 | 15 | 0 |
Nippon India Arbitrage Fund Peer Comparison
| Fund name | Rating | 1 Year Returns | 3 Year Returns | 5 Year Returns | Expense Ratio (%) | Net Assets (Rs Cr) | Return Since Launch (%) | Exit Load (Days) | Fund Age | Turn over (%) |
| Nippon Ind Arbtg Dir | 4 star | 4.27 | 4.75 | 5.72 | 0.34 | 9,331 | 6.92 | 0.25 (30) | 9yrs 8mo | 1175.00 |
| Kotak Eqt Arbtg Dir | 4 star | 4.40 | 4.76 | 5.57 | 0.44 | 23,310 | 6.87 | 0.25 (30) | 9yrs 8mo | 528.42 |
| Tata Arbtg Dir | 5 star | 3.98 | 5.02 | — | 0.29 | 7,385 | 5.50 | 0.25 (30) | 3yrs 9mo | 456.01 |
| Edelweiss Arbtg Dir | 5 star | 4.43 | 4.91 | 5.72 | 0.36 | 5,841 | 6.53 | 0.10 (30) | 8yrs 2mo | 415.00 |
| Axis Arbtg Dir | 5 star | 4.58 | 4.75 | 5.61 | 0.31 | 4,395 | 6.38 | 0.25 (7) | 8yrs 1mo | 1183.00 |
Portfolio Analysis
| No. of Stocks | 146 |
| Top 10 Holdings | 39.12% |
| Top 5 Stocks | 24.09% |
| Top 3 Sectors | 0.17% |
| Portfolio P/B Ratio | 2.51 |
| Portfolio P/E Ratio | 19.32 |
| Avg Credit Rating | GOI/Cash |
Portfolio Breakup
| Fund | Category | |
| Average Mkt Cap (Rs Cr) | 1,30,951 | 1,31,018 |
| Giant (%) | 45.93 | 44.66 |
| Large (%) | 27.48 | 26.44 |
| Mid (%) | 24.50 | 24.69 |
| Small (%) | 2.10 | 4.97 |
| Tiny (%) | — | — |
| Fund | Category | |
| Number of Securities | 302 | 169 |
| Modified Duration (yrs) | 0.10 | 0.29 |
| Average Maturity (yrs) | 0.11 | 0.30 |
| Yield to Maturity (%) | 3.40 | 5.69 |
| Avg Credit Rating | GOI/Cash | — |
Chanakya’s Mutual Fund Guidance for Nippon India Arbitrage Fund
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