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Hans India
5 days ago
- Business
- Hans India
Hyderabad Investors Pour Rs 310 Cr into Tata Arbitrage Fund in 3 months as Market Volatility Shifts Strategy
Arbitrage Funds are gaining traction as an investment option amid equity market volatility, particularly for those seeking low risk investment opportunity. By capitalising on price differences between the cash and futures markets, these funds seek to perform better in turbulent conditions, giving fund managers greater scope for intra-month trading opportunities. "In the current environment, arbitrage funds are uniquely positioned to capture the potential benefits of market volatility while shielding investors from direct equity risks. Elevated roll spreads and sustained volatility have enabled arbitrage funds to deliver reasonable returns, even as traditional income avenues have become less attractive. For investors seeking equity tax returns, arbitrage funds offer a suitable proposition," said Sailesh Jain, Fund Manager, Tata Asset Management. According to data from the Association of Mutual Funds in India (AMFI), arbitrage funds attracted Rs 43,077 crore between April and June 2025, surpassing inflows into other hybrid and equity categories. This surge underscores investor preference for instruments that can deliver relatively reasonable returns while minimising equity risk during periods of heightened uncertainty. However, profit is not guaranteed. Reflecting the broader industry trend, the Tata Arbitrage Fund too, saw inflows of Rs 5,217 crore between April and June 2025, with Rs 310 crore coming from Hyderabad. The fund had assets under management of Rs 14,274 crore as of June 30, 2025. The environment is especially conducive for arbitrage strategies, as elevated volatility and strong roll spreads have opened potential return opportunities. The Reserve Bank of India's recent easing measures—cutting the repo rate by 50 basis points and the Cash Reserve Ratio by 100 basis points—has further boosted the appeal of arbitrage funds over traditional fixed income avenues. The upcoming corporate earnings and a positive monsoon outlook are also expected to lift market sentiment. As global and domestic uncertainties continue to cloud market outlook, arbitrage funds are a choice for investors to help them navigate choppy waters. With interest rates on a downward trend and savings account returns declining, traditional fixed-income options have become relatively less attractive in terms of returns. At the same time, factors such as the anticipated Indo-US trade deal, tariff negotiations, and ongoing geopolitical tensions are keeping the market volatility elevated. Although the US dollar index remains subdued for now, any spike in global risk aversion may trigger fresh market swings. In this backdrop, arbitrage funds seek to offer investors a low-risk way to capitalise on volatility without direct equity exposure.
Business Recorder
09-07-2025
- Business
- Business Recorder
India mutual fund investors chase equities, gold and silver in quest for returns
Mutual fund allocations bounced back in India last month, driven by strong retail participation, with investors also seeking out gold and silver funds in the hunt for stronger returns. Indian equity mutual fund inflows rose 24% to 235.87 billion rupees($2.75 billion), snapping a five-month decline, as investors poured money across segments and turned to gold and silver ETFs in search of returns amid rising global trade uncertainty. India's mutual fund industry hit a new record in June, with net assets under management (AUM) climbing to 74.41 trillion rupees. The inflows supported the benchmark Nifty 50, which gained 3% for the month, while the small-caps and mid-caps jumped 6.7% and 4%, respectively. Gold Exchange Traded Funds saw inflows surge ten-fold month-on-month to 20.81 billion rupees in June, hitting a five-month high, data from the Association of Mutual Funds in India showed on Wednesday. 'Rising inflows into Gold ETFs suggest investor interest to seek both diversification and gain from the performance of the precious metal,' said Anand Vardarajan, chief business officer at Tata Asset Management. RBI action in focus as Indian bonds stay put before US data Silver ETFs attracted inflows of 20.04 billion rupees, up from 8.53 billion rupees in May. Large-cap equity mutual funds recorded a 36% monthly jump to 16.94 billion rupees, while small-cap and mid-cap funds posted a 25% and 34% rise in inflows. Contributions via systematic investment plans (SIPs) – a popular periodic investment route for mutual fund investors - rose to a record 272.69 billion rupees in June. The number of contributing SIP accounts also climbed to 86.4 million from 85.6 million in May. 'Strong inflows and record SIPs reflect improved sentiment, better valuations post-correction, and the enduring structural confidence in Indian equities,' said Himanshu Srivastava, associate director, manager research at Morningstar India. If June-quarter earnings hold up and macro stability continues, strong domestic inflows could cushion markets from foreign outflows and trade jitters, two analysts said.
Reuters
09-07-2025
- Business
- Reuters
India mutual fund investors chase equities, gold and silver in quest for returns
July 9 (Reuters) - Mutual fund allocations bounced back in India last month, driven by strong retail participation, with investors also seeking out gold and silver funds in the hunt for stronger returns. Indian equity mutual fund inflows rose 24% to 235.87 billion rupees($2.75 billion), snapping a five-month decline, as investors poured money across segments and turned to gold and silver ETFs in search of returns amid rising global trade uncertainty. India's mutual fund industry hit a new record in June, with net assets under management (AUM) climbing to 74.41 trillion rupees. The inflows supported the benchmark Nifty 50 (.NSEI), opens new tab , which gained 3% for the month, while the small-caps (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab jumped 6.7% and 4%, respectively. Gold Exchange Traded Funds saw inflows surge ten-fold month-on-month to 20.81 billion rupees in June, hitting a five-month high, data from the Association of Mutual Funds in India showed on Wednesday. "Rising inflows into Gold ETFs suggest investor interest to seek both diversification and gain from the performance of the precious metal," said Anand Vardarajan, chief business officer at Tata Asset Management. Silver ETFs attracted inflows of 20.04 billion rupees, up from 8.53 billion rupees in May. Large-cap equity mutual funds recorded a 36% monthly jump to 16.94 billion rupees, while small-cap and mid-cap funds posted a 25% and 34% rise in inflows. Contributions via systematic investment plans (SIPs) - a popular periodic investment route for mutual fund investors - rose to a record 272.69 billion rupees in June. The number of contributing SIP accounts also climbed to 86.4 million from 85.6 million in May. "Strong inflows and record SIPs reflect improved sentiment, better valuations post-correction, and the enduring structural confidence in Indian equities," said Himanshu Srivastava, associate director, manager research at Morningstar India. If June-quarter earnings hold up and macro stability continues, strong domestic inflows could cushion markets from foreign outflows and trade jitters, two analysts said. ($1 = 85.8340 Indian rupees)
Time of India
03-07-2025
- Business
- Time of India
Record inflow of over Rs 15,000 crore in May. What is making arbitrage mutual funds gain investors' interest?
Arbitrage mutual funds saw record inflows in May, driven by market volatility and tax benefits. These funds exploit price differences, offering lower risk. Recent rate cuts by the Reserve Bank of India (RBI) impact arbitrage opportunities, but less than debt funds. Experts suggest arbitrage funds for investors with a one-year horizon. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads With arbitrage mutual funds attracting the highest inflows in May, exceeding Rs 15,000 crore, and gaining increasing investor interest, market expert believes this is due to several factors, including market volatility, tax efficiency, and relative stability. Given the current high market volatility, these funds may offer a good option for investors seeking relatively low-risk opportunities to benefit from market fluctuations.'Firstly, arbitrage funds try to benefit from volatile markets by exploiting price differences between the cash and futures markets. This allows them to generate returns without taking on significant directional market risk. Secondly, these funds are treated as equity funds for taxation purposes, which can be beneficial compared to debt funds as they are taxed at slab rates. Short-term capital gains are taxed at 20%, and long-term gains are taxed at 12.5%. Holding of anything below one year is defined as short term, while above that is long term,' Sailesh Jain, Fund Manager at Tata Asset Management shared with to Jain, the third factor is that arbitrage funds maintain a market-neutral position by simultaneously buying in the cash market and selling in the futures market, and this helps to reduce the risk compared to other types of May, arbitrage funds received a total inflow of Rs 15,701 crore which was the highest among all hybrid funds , according to the monthly data by the Association of Mutual Funds in India ( AMFI ).Further analysis of this monthly data showed that the highest inflows in May marked the second consecutive month of the highest inflows in the category. In April, these funds received an inflow of Rs 11,790 crore, which was again the highest among all hybrid in its last bi-monthly policy meeting slashed the repo rate by another 50 basis points to 5.50% and a 100 basis point CRR cut. This cut in repo rate was the third consecutive rate cut by the RBI in the current calendar year and the second one in the current financial year. This marks the third consecutive cut under Governor RBI slashing down the repo rate, market experts believe that fixed income landscape has turned even more favorable for investors and the CRR cut is a strong liquidity injection, which will further push down short-end rates and improve system-wide the last rate cut by the RBI, banks have also reduced interest rates on their fixed deposits. As the fixed deposits offer lower interest rates compared to debt mutual funds, Sagar Shinde, VP of Research at Fisdom, shared with ETMutualFunds that investors in higher tax brackets, with a 1–5-year horizon, can consider diversifying beyond FDs into mutual funds.'Arbitrage funds can be more efficient for holding periods of one year or more, while income-plus-arbitrage funds tend to become more tax-efficient when held for over two years,' he the important thing to check is how the recent RBI rate cut and improved debt outlook will affect returns from arbitrage similar thoughts on debt funds, Jain said that the recent RBI rate cut has reshaped the debt market landscape, and the impact on arbitrage funds includes lower short-term interest rates, improved liquidity, and debt market said that as arbitrage funds earn returns from the spread between cash and futures prices, a rate cut typically narrows this spread, as borrowing costs decline and futures premiums compress. 'This could moderately reduce arbitrage opportunities, especially in a low-interest environment, but the impact is much lesser when compared to debt funds, which are directly exposed to interest rates,' he the CRR cut boosts liquidity, which can enhance trading volumes and increase market efficiency, and higher liquidity may lead to more frequent arbitrage opportunities, albeit with tighter spreads. And lastly, while arbitrage funds are not directly exposed to interest rate risk like debt funds, rate cuts would impact debt products directly lowering their returns.'While Arbitrage funds are largely exposed to equities, the rate cut impact is low, hence it may yield relatively competitive returns than the comparable debt funds on post tax basis,' Jain further arbitrage funds come as an option for investors' to park their money for a year or more and offer best after-tax returns. Another option available for parking money for short-term is liquid funds have very low risk, carry credit and interest rate risk but arbitrage funds have no risk as 100% is hedged. The returns offered by liquid funds are low and those offered by arbitrage funds are these two options are available for parking money for short-term, Jain said that, 'We continue to remain optimistic on Arbitrage fund, with increased activity in the market may continue to provide continued opportunity for the arbitrage funds to generate relatively competitive returns than the comparable debt funds on a post-tax basis.'Arbitrage funds look for arbitrage opportunities available between the cash and derivatives markets. In other words, the fund managers in these schemes look for the price difference that they can exploit between the cash and derivatives markets. They may also invest in debt securities and equities if there are no arbitrage opportunities available in the market.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
10-06-2025
- Business
- Time of India
Tata Asset Management receives IFSCA approval to begin operations in Gujarat's GIFT City
Tata Asset Management has received necessary regulatory approval from the International Financial Services Centres Authority ( IFSCA ) to commence operations at the International Financial Services Centre (IFSC) in GIFT City , Gujarat , as a Registered Fund Management Entity (Retail). This marks a significant milestone in Tata Asset Management Company's journey toward becoming a global asset management brand. According to the AMC, presence in GIFT City will play a pivotal role in strengthening the company's offshore product portfolio and enhancing its investment offerings for international clients, which include foreign nationals, family offices, government and institutional investors, and non-resident Indians (NRIs). It will also provide an avenue for Indian investors to pursue outbound investments under the Liberalised Remittance Scheme (LRS), the company said. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo The foray also aligns with the Tata AMC's vision to contribute to India's positioning as a key player in the global financial ecosystem, under the enabling framework of the IFSCA. Established in 1994, Tata Asset Management Private Limited is the investment manager for Tata Mutual Fund . It is one of the oldest mutual funds in India with a unique folio base of over 59 lakhs (latest available as on 30th April 2025), the press release added. Live Events
