Invest In These Top Arbitrage Mutual Funds in December 2024
An arbitrage fund is a type of hybrid mutual fund that focuses on generating profit from price differences in various markets. If you want to invest your money for more than a year or are seeking the best after-tax return, you can consider investing in arbitrage mutual funds.
Arbitrage funds seek opportunities for arbitrage between the cash and derivatives markets. The fund managers in this scheme search for the price differences so that they can utilize the cash and derivatives markets. Investors should also consider investing in debt securities and equities if there are no arbitrage opportunities available in the market.
Long-Term Capital Gain Tax
Arbitrage funds are taxed the same as equity mutual funds. If the investment is made for more than a year, in that case they are qualified for a long-term capital gains tax of 12.5%. A short-term capital gain tax is applicable if the investment is held for less than a year.
Arbitrage funds offer better arbitrage opportunities in cases of volatility in the stock market. Returns from arbitrage funds are independent of the interest rate regime because they focus on utilizing arbitrage opportunities. This fund is beneficial for those investors who prefer not to make decisions on the rate of interest.
Investors should always remember that there was a time when arbitrage opportunities were available in the market. It only happens when the market is directed in a single direction. A volatile market is beneficial for arbitrage funds, in this situation there will be more arbitrage opportunities available.
Top arbitrage funds to invest in December 2024:
- Kotak Equity Arbitrage Fund
- Nippon India Arbitrage Fund
Kotak Equity Arbitrage Fund: It is a Kotak Mahindra Mutual Fund that focuses on generating income and capital growth by investing in arbitrage opportunities in the equity market.
Nippon India Arbitrage Fund: It is a conservative mutual fund that focuses on generating income by utilizing price differences between cash and derivative markets.
