Arbitrage fund is a type of mutual fund that advantage of price differential in the cash and future market to gain returns. Arbitrage funds are a good category for parking short term money. These funds invest their assets in taking hedged positions only. The fund buys shares in the cash market and takes an opposite trade in the futures market. The difference in the price in the futures market and cash market is the locked-in profit for the arbitrage funds.
In this video we have discussed the top 3 recommended arbitrage funds for investment:
Edelweiss Arbitrage Fund
Kotak Equity Arbitrage Fund
Nippon India Arbitrage Fund
We have discussed the past returns and features for these funds.