Pune: In a clear response to ongoing equity market turbulence, Pune-based investors poured ₹356 crore into the Tata Arbitrage Fund between April and June 2025.
The fund, which strategically capitalises on price differences in the cash and futures markets, has seen rising demand as investors seek low-risk, tax-efficient investment alternatives.
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According to data released by the Association of Mutual Funds in India (AMFI), arbitrage funds attracted ₹43,077 crore in net inflows during Q1 FY26 – outperforming other hybrid and equity-oriented mutual fund categories.
Reflecting this trend, the Tata Arbitrage Fund witnessed strong national inflows of ₹5,217 crore during the quarter, taking its total assets under management to ₹14,274 crore as of June 30, 2025.
“Arbitrage funds are uniquely positioned to deliver stable returns amid elevated market volatility and high roll spreads,” said Sailesh Jain, Fund Manager at Tata Asset Management.
“They provide equity-like tax benefits without exposing investors to direct equity risk, making them an ideal tool for navigating today’s uncertain financial climate.”
Tata Arbitrage Fund: Several macroeconomic factors have contributed to this momentum:
- RBI’s monetary easing, including a 50 basis point repo rate cut and a 100 basis point CRR reduction, has reduced the appeal of traditional fixed-income options.
- Positive monsoon forecasts, upcoming corporate earnings, and potential Indo-US trade agreements have increased volatility, creating fertile ground for arbitrage strategies.
- Tax efficiency—arbitrage funds are taxed like equity mutual funds – offers an edge over short-term debt instruments, especially for high-net-worth individuals seeking optimal post-tax returns.
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While global risks such as geopolitical tensions and tariff uncertainties continue to fuel market swings, arbitrage funds offer a relatively low-risk hedge.
With savings account interest rates declining and inflation-adjusted returns tightening, investors are now re-evaluating their strategies – favoring instruments that combine stability, liquidity, and tax benefits.
As market uncertainty persists, the Tata Arbitrage Fund is emerging as a preferred option for risk-averse investors aiming to ride out volatility while maintaining exposure to structured, market-linked returns.
