The fund will be open for subscription during its NFO period from April 8 to April 22.
The scheme primarily follows a “long cash – short futures” strategy, where positions in the cash market are hedged with corresponding futures positions. This approach is intended to reduce sensitivity to overall market movements while attempting to benefit from price differentials between the cash and derivatives markets.
However, the availability of arbitrage opportunities can fluctuate, and the fund does not guarantee returns.
The fund may also allocate up to 35% of its portfolio to debt and money market instruments, aiming to balance liquidity and risk, though these investments remain subject to market conditions. The scheme is structured to maintain over 65% exposure to equity and equity-related instruments, which may allow it to qualify as an equity-oriented fund for taxation purposes, subject to prevailing tax laws.
The Groww Arbitrage Fund may be suitable for investors seeking hedged equity exposure with a relatively lower risk profile, a minimum investment horizon of one year, and potential tax efficiency compared to certain fixed-income options. Investors should note that arbitrage funds are not risk-free and carry market, liquidity, and operational risks.
The scheme will track the Nifty 50 Arbitrage TRI benchmark. The minimum investment is Rs. 500, with no exit load. Fund managers for the scheme are Paras Matalia, Shashi Kumar, and Wilfred Gonsalves.
