Knowledge Nuggets - Why invest in an ARBITRAGE FUND?

An Arbitrage fund identifies and takes advantage of spreads between the stock price and its futures price. This results in a relatively high return at negligible risk for the investors.Tax incidences on Arbitrage Fund is much more favorable than FDs as its treated as Equity investment. This makes it very attractive for investors who otherwise invest in FDs...

Performance of Arbitrage Funds

Scheme Name	3 Months*	6 Months*
SBI Arbitrage Opportunities Fund - Growth	9.06	9.19
UTI Spread Fund - Growth	9.84	9.17
JM Arbitrage Advantage Fund - Growth	9.16	9.16
ICICI Prudential Blended Plan - Option A - Growth	9.37	8.85
Standard Chartered Arbitrage Fund - Plan A (Regular) - Growth	8.12	8.52
JM Equity & Derivative Fund - Growth	9.14	7.53

TAX BENEFITS

• Short Term Capital Gain - 10%
• Long Term (over 1 year) Capital Gain - Zero
• Dividend payout - Tax free
• No TDS deduction on redemption