Indiabulls MF launches Arbitrage Fund

MUMBAI: Indiabulls Mutual Fund today said it has launched a new scheme Indiabulls Arbitrage Fund, which would predominantly be long cash market-short future market.

The scheme's primary objective is to generate income by predominantly investing in arbitrage opportunities in the cash and derivative segments of equity markets and arbitrage opportunities available within derivative segment and by investing the balance in debt and money market instrument.

There is no assurance or guarantee that the scheme's investment objective will be realised, a company release said.

The new fund offer, which opened today, will close on December 15.

The NFO targets returns higher than the money market interest rates without taking the market risk as the fund would predominantly be long cash market-short future market.

"This product aims to capture the interest element in the pricing differential between cash and futures market," Indiabulls Mutual Fund's fund manager Sumit Bhatnagar told PTI.

Predominantly, it will be buying in cash market and simultaneously take short position in the futures market to hedge the position and capture the price differential, he said.

The fund would be fully hedged as each position in equity stock shall be hedged by an equal and opposite position in the relevant derivative instrument, the release said.