NFO Launch: Franklin Templeton Introduces New Arbitrage Fund Opportunity
Recently, Franklin Templeton Mutual Fund (India) has launched the Franklin Arbitrage Fund, an open-ended scheme that focuses on arbitrage opportunities.
The New Fund Offer (NFO) for the Franklin India Arbitrage Fund is open for subscription on November 4, 2024, and will close on November 18, 2024. The scheme will be available for continuous sale and repurchase from November 21 onwards.
This fund focuses on achieving capital growth and income by primarily focusing on arbitrage opportunities in both the cash and derivative segments of the equity markets. Additionally, it will explore arbitrage possibilities within the derivative segment while allocating the remaining portion to debt and money market instruments, as stated in a release from the fund house
Suitability for Investors
This scheme is ideal for investors who are seeking short-term income through a hybrid investment approach that integrates arbitrage with fixed-income and money market instruments. The primary focus of this scheme is to generate stable returns while maintaining a low-risk profile and making it suitable for conservative investors aiming for fixed gains without high market exposure.
Benchmark
The performance of the Franklin India Arbitrage Fund compared against the nifty 50 arbitrage index. The minimum investment required for a lump sum investment is Rs. 5,000, and for a systematic investment plan (SIP), it is set at ₹500.
The management team, which contains Rajasa Kakulavarpu, Yogik Pitti, and Pallab Roy, applies their expertise to oversee this fund.
Investors have the option to select between a regular and direct plan, both of which come with growth and Income Distribution cum Capital Withdrawal (IDCW) alternatives. This option allows investors the flexibility to either reinvent their earnings or receive cash distribution.
Why to Choose Arbitrage Funds?
Arbitrage funds, such as the Franklin India Arbitrage Fund, are designed to take advantage of price differences between cash and derivative markets, positioning them as a low-risk investment option. By utilizing hedged positions, these funds can deliver steady returns, even over market volatility. This scheme enables investors to engage in the equity market while reducing their direct exposure to market fluctuations.
There is no entry load, and a nominal exit load of 0.25% applies if units are redeemed within 30 days of allotment, with no exit load applicable thereafter.
