Birla Sun Life MF launches Enhanced Arbitrage Fund

MUMBAI: Birla Sun Life Mutual fund (BSLMF) has launched a new fund christened as ���Birla Sun Life Enhanced Arbitrage Fund��� that aims to generate absolute returns over and above money market returns or liquid funds.

The new fund offer opened on July 14, and closes on July 20. The scheme seeks to generate income by investing predominantly in equity and equity related instruments. The fund intends to take advantage from the price differentials prevailing for stock / index in various market segments (cash & future).

The fund will also explore the possibilities to take advantage of opportunities arising out of corporate events like open offers, buy-back and merger. Arbitrage funds works on a mechanism wherein returns are locked-in through a completely hedged position. It tends to neutralize the directional impact of the market.

���Due to prevailing high liquidity, we expect the liquid fund returns to reduce. Arbitrage funds come as an alternative, which can potentially generate returns higher than liquid funds in the medium term. It can also be categorized as low risk fund due to its inherent investment mechanism through which it takes complete hedge position to lock-in returns,��� said A Balasubramaniam, CIO-BSLAMC.

BSL Enhanced Arbitrage Fund along with cash-futures arbitrage strategy will invest primarily in cash future arbitrage, index arbitrage and buy back arbitrage.