Why Are Arbitrage Mutual Funds Profitable?

Arbitrage Mutual Funds

Arbitrage mutual funds, considered an option for short-term investment options such as liquid and ultra-short-term funds, attract investors’ late attention. According to data from the Association of Mutual Funds in India, Asset Management (AUM) assets under arbitrage funds increased by nearly 22% to Rs 63,310 crore on 26 July and 52,062 crores by 31 March 2019. The increase can be attributed to the latest cases of credit downgrades and defaults that have an impact on sentiment towards some debt mutual funds, including liquid funds. Arbitrage MFs try to capitalize on…

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