Now get tax efficient returns with less risk with ITI Arbitrage Fund  

ITI Arbitrage Fund

(An open ended scheme investing in arbitrage opportunities)
Investment Objective: The investment objective of the Scheme is to generate income by predominantly investing in arbitrage opportunities in the cash and the derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments. However, there is no assurance that the investment objective of the scheme will be realized.
Fund Manager: Mr. George Heber Joseph and Mr. Milan Mody
Benchmark: : Nifty 50 Arbitrage Index

Key Features

SQL Philosophy

'S': Margin of Safety, 'Q': Quality of the business and 'L': Low Leverage.

Better Liquidity

Alternate Option to Liquid Fund and Bank FD

Investment Strategy

Fully Hedged Portfolio & Market Neutral Strategy

Tax Efficiency

Tax efficient returns with low volatility

Risk Profile

Lowest risk product in Equity segment & zero credit risk on Arbitrage investments

Ideal Investment Option

Ideal investment option for investors with short to medium term investment horizon

Tax Efficient Returns With Arbitrage Funds
Particulars Arbitrage Fund Liquid Fund Fixed Deposit Saving Account
Investment 1,00,00,000 1,00,00,000 1,00,00,000 1,00,00,000
1 year Return 6.44% 7.18% 6.80% 3.50%
Gains 6,44,000 7,18,000 6,80,000 3,50,000
Tax Paid % * 11.65% 35% 35% 35%
Post Tax Gains 5,68,974 4,66,700 4,42,000 2,27,500
Post Tax Returns % 5.69% 4.67% 4.42% 2.28%
Tax Paid 75,026 2,51,300 2,38,000 1,22,500
1 year average return of Arbitrage category funds (Regular Plan - Growth) as on July 31, 2019. Returns on Liquid Funds based on 1 year average return of Liquid category funds (Regular Plan - Growth) as on July 31, 2019. FD & Savings assumed 6.8% and 3.50% based on rates offered by large PSU banks. SBI fixed deposit rates for 1 year to less than 2 years (for below Rs.2 crores). *Assumed that investor belongs to highest tax bracket & has taken capital gains tax benefit.”
The above calculation is only for Illustration purpose with prevailing income tax regulation in India. It should not be construed as a promise on minimum returns and safeguard of capital. The AMC / Mutual Fund does not guarantee or promise or forecast any returns. In view of individual nature of the tax consequences, the investor is advised to consult his/her own professional tax advisor.
Source: Internal

Portfolio Strategy

  • Returns are generated from the implied cost of carry between the underlying asset and the derivatives market
  • Aims to provide relatively risk-free returns without any directional equity risk
  • Implied cost of carry and mis-pricing across the cash & derivative markets can lead to profitable arbitrage trades
  • Fund intends to take offsetting positions on cash and futures markets without any un-hedged/open exposures
  • Bank FD’s, cash or securities will be used as margin money for the fund
  • If arbitrage opportunities are limited, the scheme may invest a small portion in very high quality low duration debt securities or money market instruments.
Asset Allocation
Instruments Indicative Allocation under Normal Circumstances(% Of Net Assets) Indicative Allocation under Defensive Circumstances (% Of Net Assets) Risk Profile
Maximum Minimum Maximum Minimum Low/Medium/High
Equity & Equity related instruments including derivatives 100% 65% 35% 0% Medium to High
Debt instruments (including floating rate debt instruments and securitized debt) with maturity up to 91 days only 35% 0% 100% 65% Low
The allocation under defensive circumstances will be made keeping in view the interest of the Unit Holders. Such position will be closely monitored by the fund managers and necessary rebalancing will be done at suitable opportunity but not later than 30 days.
This product is suitable for investors who are seeking*
  • To generate income by predominantly investing in arbitrage opportunities
  • Investments predominantly in arbitrage opportunities in cash and derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money instruments.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
riskometer
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.