October 17, 2022
mayank
SBI Arbitrage Opportunities Fund
NAV Growth: Rs 29.2619
NA IDCW: Rs 15.8105
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 will invest 65 to 85 per cent of its assets in equities and equity derivatives and the rest in debt and money market instruments. It will invest in stocks and would offset its investment in stocks by simultaneous equivalent investment in equity derivatives.
Fund Manager:
1) R Arun
Education: Mr. Arun is a B.Com (H), PGDM (Finance) and Financial Risk Manager (GARP).
Experience: Prior joining SBI in 2009 he has worked with ING Investment Management, Deutsche Bank India Operations and CRISIL India.
2) Neeraj Kumar
Education: Mr.Kumar is a B.Com(H) and ACA.
Experience: Prior to joining SBI AMC he has worked with SBI Funds Management Pvt. Ltd. and LIC.
Investment Details
| Min. Investment (Rs) | 5,000 |
| Min. Addl Investment (Rs) | 1,000 |
| Min. SIP Investment (Rs) | 500 |
| Min. Withdrawal (Rs) | 500 |
| Min. No of Cheques | 12 |
| Min. Balance (Rs) | 1,000 |
| Lock-in Period | NA |
| Exit Load | 0.25% for redemption within 30 days |
Basic Details
| Fund House | SBI Mutual Fund |
| Launch Date | 01-Jan-13 |
| Return Since Launch | 6.59% |
| Benchmark | NIFTY 50 Arbitrage TRI |
| Riskometer | Low |
| Type | Open-ended |
| Assets | Rs 6,980 Cr |
| (As on 30-Sep-2022) | |
| Expense Ratio | 0.36% |
| (As on 30-Sep-2022) | |
| Risk Grade | Above Average |
| Return Grade | Below Average |
| Turnover | 242.00% |
SBI Arbitrage Opportunities Fund Trailing Returns (%)
| Fund name | YTD | 1D | 1M | 3M | 6M | 1Y | 3Y | 5Y | 7Y | 10Y |
| SBI Arbtg Opp Dir | 3.63 | 0 | 0.56 | 1.27 | 2.31 | 4.48 | 4.3 | 5.37 | 5.66 | — |
| CCIL T Bill Liquidity Weight* | 1.67 | 0.04 | 0.19 | 0.67 | 1.07 | 2.08 | 2.52 | 3.21 | 3.56 | — |
| Hybrid: Arbitrage* | 3.3 | 0.01 | 0.54 | 1.18 | 2.14 | 4.18 | 4.32 | 5.26 | 5.76 | — |
| Rank within category* | 6 | 24 | 7 | 2 | 5 | 7 | 16 | 12 | 11 | — |
| Number of funds in category* | 25 | 26 | 26 | 25 | 25 | 25 | 23 | 17 | 15 | 0 |
SBI Arbitrage Opportunities 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 (%) |
| SBI Arbtg Opp Dir | 2 star | 4.48 | 4.30 | 5.37 | 0.36 | 6,980 | 6.59 | 0.25 (30) | 9yrs 9mo | 242.00 |
| Kotak Eqt Arbtg Dir | 4 star | 4.71 | 4.74 | 5.59 | 0.43 | 22,408 | 6.87 | 0.25 (30) | 9yrs 9mo | 536.65 |
| Nippon Ind Arbtg Dir | 4 star | 4.56 | 4.69 | 5.74 | 0.31 | 9,182 | 6.92 | 0.25 (30) | 9yrs 9mo | 1259.00 |
| Tata Arbtg Dir | 5 star | 4.37 | 4.96 | — | 0.29 | 6,975 | 5.51 | 0.25 (30) | 3yrs 10mo | 456.01 |
| Edelweiss Arbtg Dir | 5 star | 4.75 | 4.85 | 5.73 | 0.36 | 5,586 | 6.53 | 0.10 (30) | 8yrs 3mo | 410.00 |
Portfolio Analysis
| No. of Stocks | 155 |
| Top 10 Holdings | 40.16% |
| Top 5 Stocks | 28.85% |
| Top 3 Sectors | 0.44% |
| Portfolio P/B Ratio | 2.06 |
| Portfolio P/E Ratio | 14.34 |
| Avg Credit Rating | GOI/Cash |
Portfolio Breakup
| Fund | Category | |
| Average Mkt Cap (Rs Cr) | 98,395 | 1,18,869 |
| Giant (%) | 39.81 | 42.35 |
| Large (%) | 27.85 | 26.33 |
| Mid (%) | 29.47 | 26.71 |
| Small (%) | 2.87 | 5.22 |
| Tiny (%) | — | — |
| Fund | Category | |
| Number of Securities | 324 | 179 |
| Modified Duration (yrs) | — | — |
| Average Maturity (yrs) | — | — |
| Yield to Maturity (%) | — | — |
| Avg Credit Rating | GOI/Cash | — |
Chanakya’s Mutual Fund Guidance For SBI Arbitrage Opportunities Fund
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