Archive · 24 Jul 2025
Arbitrage Funds Becoming Popular for Low Risk and Good Returns
Imagine buying something for less and selling it for more at the same time.
That's what arbitrage funds do with stocks.
They buy in one place and sell in another instantly, making money from small price differences.
Unlike regular investments, they are low risk because they buy and sell at the same time.
They're becoming popular because they can offer better returns than traditional savings accounts, and your money is easier to access.
Plus, the taxes might be lower if you keep the money invested for a while.
This is why more people are choosing arbitrage funds.
Arbitrage funds are becoming popular due to their low risk and potential for good returns.
These funds profit from price differences in different markets by simultaneously buying and selling assets.
Arbitrage funds offer advantages like liquidity, allowing investors to withdraw money when needed.
They provide tax benefits, with lower tax rates for investments held over a year compared to FDs.
Arbitrage funds have seen record investments, with over Rs 155 billion invested in June 2025.
- Who
- Investors looking for low-risk, potentially higher-return investments are drawn to arbitrage funds.
- What
- Arbitrage funds are gaining popularity as a low-risk investment.
- When
- Recent trends show a growing preference for arbitrage funds.
- Where
- Arbitrage funds operate in different markets.
- Why
- Arbitrage funds offer low risk, good returns, liquidity, and tax benefits compared to options like fixed deposits.
Fixed Deposits
Arbitrage Funds
Taxation
Fixed Deposits
Interest earned is taxable according to income slab.
Arbitrage Funds
Arbitrage Funds offer potentially higher returns.
- Definition
- Funds that exploit price differences across markets.
- Risk Level
- Low
- Average Return (last year)
- About 8 percent
- Tax on Investments (under 1 year)
- 20 percent
- Tax on Investments (over 1 year)
- 12.5 percent
- Funds Under Management (approx.)
- Rs 2,494 billion