Now Reading: Zerodha Fund House opens arbitrage fund with Rs 5,000 minimum
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Zerodha Fund House opens arbitrage fund with Rs 5,000 minimum
Zerodha Fund House launched the Zerodha Arbitrage Fund, an open-ended equity scheme that seeks returns from price differences between cash and derivatives markets. The new fund offer requires a minimum investment of…
The Story in Brief
Zerodha Fund House launched the Zerodha Arbitrage Fund, an open-ended equity scheme that seeks returns from price differences between cash and derivatives markets. The new fund offer requires a minimum investment of Rs 5,000 and targets investors wanting lower volatility than pure equity funds for short-term cash parking.
The fund will keep at least 65% in equity and equity-linked derivatives, with the rest in short-term debt when arbitrage opportunities shrink. Because of this equity exposure, the fund is taxed like an equity mutual fund: short-term gains at 20% if redeemed within 12 months, and long-term gains above Rs 1.25 lakh at 12.5% for holdings over a year. Zerodha Fund House, a joint venture with smallcase, already serves over 12.5 lakh investors.
The Indian Opinion
Arbitrage funds are being pitched as a smart alternative to fixed deposits, but the narrative conveniently skips the fine print: returns are variable, not guaranteed, and depend on fleeting price gaps that can vanish. Enthusiasts call the tax treatment a win for high earners, yet the real test is whether post-cost returns outstrip a plain debt fund over a full year. Watch the expense ratio and exit load disclosures closely they will decide whether this is genuine innovation or just a glossy wrapper on a spread trade.
Source: livemint.com
This story was synthesised by AI from the source linked above.
