Arbitrage funds fail to beat benchmark in 2023; offer 5.70%

The arbitrage funds have failed to beat their benchmark in 2023, an analysis of returns showed. There are around 26 schemes in the category and all schemes failed to beat their benchmark in 2023.

The arbitrage fund category has offered an average return of around 5.70% in 2023. The arbitrage schemes are benchmarked against Nifty 50 Arbitrage, which offered 6.54% during the same time period.



Kotak Equity Arbitrage Fund, the largest scheme in the category based on assets managed, offered 6.13% versus 6.54% by its benchmark. The scheme manages assets of Rs 27,412.04 crore.

SBI Arbitrage Opportunities Fund, the topper in the category, gave 6.22%. The scheme manages assets of Rs 21,238.03 crore. UTI Arbitrage Fund, one of the oldest scheme in the category, gave 5.95% in 2023. The scheme was launched in June 2006.

Groww Arbitrage Fund, the smallest scheme in the category based on assets managed, gave the lowest return. The scheme gave 4.16% in 2023. The scheme manages assets of Rs 2.49 crore.

There are 26 schemes in the arbitrage category. Around 19 schemes have a performance record of around five years. Arbitrage funds are typically recommended to investors to park money for a year or more to get better post-tax returns. These schemes are treated like equity schemes and investments will qualify for LTCG tax of 10% if held over a year. Most arbitrage funds offered around 6% in the last year.

If you are looking for recommendations, see : Best arbitrage mutual funds to invest in 2023