There are multiple types of mutual fund schemes in India that offer different benefits. If you’re not sure what to pick, here’s a smart investment option you might like. There is a scheme that combines equity, debt, and cash to create a balanced portfolio. It focuses on arbitrage opportunities. It aims for steady growth even when the market changes. You can enjoy short-term gains and long-term stability without worrying about lock-in periods. Let’s introduce you to the Bajaj Finserv Arbitrage Fund Direct Growth plan.
See how this investment option might be a suitable mutual fund investment for you!
In this blog, we’ll explore the Bajaj Finserv Arbitrage Fund NAV, its benefits, and how to invest in the Bajaj Finserv Arbitrage Fund.
- What You Can Achieve: Fund Management and Objectives
- Performance Overview- 2024
- Investment Allocation
- Key Parameters
- Returns of Bajaj Finserv Arbitrage Fund – Direct Plan
- Taxation
- Investment Details
- How to Invest in Bajaj Mutual Funds
- What is an Arbitrage Fund?
- Why Should You Consider Arbitrage Funds?
- Bajaj Finserv Arbitrage Fund – Direct Plan: Key Takeaways
- FAQs: Bajaj Finserv Arbitrage Fund – Direct Plan
What You Can Achieve: Fund Management and Objectives
The Bajaj Finserv Arbitrage Fund Direct Growth is a hybrid mutual fund that started on September 15, 2023. Ilesh S. Savla has been managing this fund since September 13, 2023. The main goal of the Bajaj Finserv Arbitrage Fund Direct Growth is to generate returns by capitalizing on arbitrage opportunities. It does so through both cash and derivatives markets. Additionally, it also invests in debt and money market instruments for added stability.
It provides you an opportunity to take the benefit of investing with a diversified portfolio.
Performance Overview- 2024
Over the past year, it has returned about 7.56%, showing that it can grow your money steadily. In the last six months, the Bajaj Finserv Arbitrage Fund Direct gave back 3.63%.
But there’s more.
In just last three months, it returned 1.73%.
This fund mixes its investments, putting some money into stocks, some into bonds, and keeping a good portion in cash.
Investment Allocation
Let us see how the Bajaj Finserv Arbitrage Fund – Direct Plan growth allocates its assets.
- Equity: The fund allocates 0.47% to equities. This small percentage shows that the Bajaj Finserv Arbitrage Fund also makes stock investments.
- Debt: A significant portion of 29.07% is invested in debt instruments. This helps provide stability and regular income.
- Cash and Cash Equivalents: The fund holds 71.41% in cash and cash equivalents.
Overall, this Bajaj Finserv Arbitrage Fund portfolio asset allocation strategy aims to balance risk and returns. And as seen, this is done by combining equity for growth, debt for stability, and cash for liquidity.
Top Holdings- 2024
The Bajaj Finserv Arbitrage Fund Direct growth plan primarily invests in Cash Equivalents.
However, the main sectors under its focus are:
| Financial Services |
| Industrials |
| Basic Materials |
| Corporate |
| Technology |
| Energy |
| Utilities |
| Consumer Cyclical |
| Healthcare |
| Consumer Defensive |
| Communication |
| Real Estate |
Bajaj Finserv Arbitrage Fund – Direct Plan Portfolio Composition
The fund invests in various companies categorized by size:
- Giant Companies: 43.52% of the portfolio (compared to 49.70% in the category)
- Large Companies: 34.29% (category average: 31.19%)
- Mid Companies: 20.85% (category average: 18.07%)
- Small Companies: 1.35% (category average: 1.89%)
- Tiny Companies: 0% (category average: 0%)
The average market capitalization of the companies in this fund is ₹1,72,637 Crores, while the category average is ₹2,01,800 Crores.
Equity Fund Details
The fund has a total of 87 different stocks.
- Top 10 Holdings: Represent 48.14% of the fund
- Top 5 Stocks: Make up 37.08% of the fund
- Price-to-Book Ratio: 3.26
- Price-to-Earnings Ratio: 22.61
Debt Fund Details
In terms of debt investments, here are the specifics:
- Total Number of Securities: 176 (compared to a category average of 224)
- Macaulay Duration: 0.16 years (category average: 0.37 years)
- Average Maturity: 0.16 years (category average: 0.39 years)
- Yield to Maturity: 7.21% (category average: 7.11%)
Top Equity Holdings
Here are some of the top companies in the fund:
| Company Name | Sector | P/E Ratio | % of Assets |
| HDFC Bank | Financial | 19.01 | 3.95% |
| Reliance Industries | Energy & Utilities | 25.79 | 3.28% |
| Bandhan Bank | Financial | 10.34 | 2.69% |
| ITC | Consumer Staples | 29.31 | 2.55% |
| Tata Power | Energy & Utilities | 36.52 | 2.43% |
| Hindustan Aeronautics | Industrials | 34.21 | 2.39% |
| Interglobe Aviation | Industrials | 22.84 | 2.24% |
| MCX | Financial | 92.75 | 2.02% |
| GMR Airports Infra | Industrials | Not Available | 1.98% |
| Bajaj Finance | Financial | 27.35 | 1.93% |
Key Parameters
As of September 2024, the Bajaj Finserv Arbitrage Fund Direct growth plan AUM is ₹700 Crores in assets, which is below the average for similar funds. It has an expense ratio of 0.25%. The benchmark for this fund is the NIFTY 50 Arbitrage TRI. The risk level is considered low, and it is an open-ended fund.
Returns of Bajaj Finserv Arbitrage Fund – Direct Plan
If you are considering the Bajaj Finserv Arbitrage Fund – Direct Plan, you must know about its returns over different time periods:
- The fund has provided a return of 7.56% over the past year.
- In the last six months, the fund has generated a return of 3.63%.
- Over the past three months, the fund delivered a return of 1.73%.
Overall, these returns suggest that Bajaj Finserv Arbitrage Fund – Direct Plan has been effective in providing continued growth to its investors.
Taxation
Since arbitrage funds are generally equity-oriented, with over 65% of assets invested in equities, they have specific tax rules:
- Short-term Gains (holding period less than 1 year): If you sell your units within a year, the profits are considered short-term capital gains and are taxed at 15%.
- Long-term Gains (holding period more than 1 year): If you hold your units for over a year, any profits are long-term capital gains and are taxed at 10%. However, this does not include indexation benefits (adjusting for inflation).
- Exemption on Gains Up to ₹1 Lakh: If your total long-term capital gains from equity investments in a financial year are up to ₹1 lakh, these gains are tax-free. Only gains above ₹1 lakh will be taxed at 10%.
This tax treatment makes arbitrage funds attractive for those looking to benefit from equity taxation rules with comparatively lower risk.
Investment Details
The minimum amount you can invest is ₹500. If you want to add more to your investment later, the minimum additional amount is ₹100. You have a dual advantage.
This means, you can invest in Bajaj Finserv Arbitrage Fund Direct Growth through SIP as well as Lumpsum. The minimum amount required for both is ₹500.
Know your SIP returns on Bajaj Finserv Arbitrage Fund Direct Growth Plan with SIP calculator!
You can withdraw money with a minimum withdrawal of ₹500.
Exit Load
For the Bajaj Finserv Arbitrage Fund – Direct Plan, an exit load of 0.25% applies for redemptions made within 15 days of investment. This fee promotes longer-term investment in the fund.
There is no lock-in period for Bajaj Finserv Arbitrage Fund.
How to Invest in Bajaj Mutual Funds
You can invest in an Arbitrage Fund easily with Shoonya.
Shoonya offers a free demat and trading account along with the zero brokerage trading.
Here’s how you can start investing in Bajaj Finserv Arbitrage Fund – Direct Plan with Shoonya!
Investing in Lump Sum Mutual Funds Through the Shoonya Web Platform
Here’s a quick guide on how to invest in lump sum mutual funds through the Shoonya web platform:
- First, you need to log in to your Shoonya account at trade.shoonya.com. From the “Orders” section, click on “MF order.”
- Search for the fund you wish to invest in, in this case, Bajaj Finserv Arbitrage Fund – Direct Growth Plan.
- Choose “Fresh” for a new investment and enter the amount you want to invest.
- You can complete your purchase by clicking the “Purchase” button.
- A payment link will be sent to your registered email. Use the link to make the payment.
After payment, your mutual fund units will be allotted to your Demat account within T+2 days.
Note: You can only make the payment using the bank account registered with your Demat account.
Setting Up an SIP for Mutual Funds
If you prefer a Systematic Investment Plan (SIP) for Axis Arbitrage Fund, follow these steps:
- First, you need to log in to your Shoonya account at trade.shoonya.com. Go to “Orders” and click on “XSIP.”
- Find the mutual fund for which you want to set up an SIP. In this case, select Bajaj Finserv Arbitrage Fund – Direct Plan.
- If this is your first SIP with Shoonya, you need to create a Mandate ID. Enter the mandate amount and the validity date (until you want to keep your SIP active).
- You must submit the details, and you’ll receive a Mandate authentication link via email. Approval generally takes 24 hours.
Once your Mandate is approved, you can follow these steps to set up your SIP:
- Go to “XSIP,” enter the SIP amount, and select “Fresh” as the transaction type.
- Choose the date when the SIP will be debited directly from your registered bank.
- The approved Mandate ID will auto-reflect.
- Choose “Monthly” for monthly debits and specify the number of instalments (e.g., 24 instalments for a 2-year SIP).
This process will help you invest systematically with ease.
What is an Arbitrage Fund?
An arbitrage fund is a kind of mutual fund that aims for better returns by taking advantage of price differences between two markets: the cash market and the futures market. These funds buy securities in one market and sell them in another where prices are higher, allowing them to profit from the difference. They are considered hybrid funds because they invest in both stocks and bonds.
Why Should You Consider Arbitrage Funds?
Here are multiple reasons for you to try investing in Bajaj Finserv Arbitrage Fund – Direct Plan:
- These funds aim to reduce risk and focus on regular profits.
- They usually show less fluctuation.
- Arbitrage funds can provide returns similar to or even better than low-risk debt funds, even before taxes.
- They work well for both short-term and long-term investments.
- You get the benefit from favourable tax rules for equity.
Bajaj Finserv Arbitrage Fund – Direct Plan: Key Takeaways
Key Details
- NAV: ₹10.8570 (as of Nov 4, 2024)
- Assets Under Management (AUM): ₹700 Crores (as of Sept 30, 2024)
- Risk Level: Low
- Expense Ratio: 0.25%
- Returns: 7.56% in the past year, 3.63% over six months, and 1.73% in the last three months.
- Portfolio Composition: Balanced between equity (0.47%), debt (29.07%), and cash (71.41%).
FAQs: Bajaj Finserv Arbitrage Fund – Direct Plan
The Bajaj Finserv Arbitrage Fund – Direct Plan invests in stocks and derivatives. It aims to make money by taking advantage of price differences between a stock and its futures.
As of November 4, 2024, the NAV (Net Asset Value) of the Bajaj Finserv Arbitrage Fund – Direct Plan is ₹10.8570. This value shows the price of one unit of the fund.
The Assets Under Management (AUM) for the Bajaj Finserv Arbitrage Fund – Direct Plan is ₹700 Crores as of September 30, 2024. This means this amount is currently being managed in the fund.
The riskometer level for this fund is classified as Low. This indicates that the fund carries relatively low risk for investors.
No, there is no lock-in period for the Bajaj Finserv Arbitrage Fund – Direct Plan. You can withdraw your money whenever you want without any penalties.
The expense ratio for this fund is 0.25%. This means that 0.25% of your investment goes towards managing the fund’s expenses.
Source: ValueResearch
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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.