In 2006, UTI Arbitrage Fund was launched. The fund has exhibited decent performance besides paying monthly dividend under its regular and direct plans. On compounded annual growth basis, the fund has delivered a return of 4.46% under its regular plan growth option and 5.02% under its direct plan growth option on a 1-year basis. (Data as of 6th November 2020). UTI Arbitrage Fund can be a good investment option given its track record.
Being an equity-oriented fund, it enjoys certain tax arbitrage compared to other debt investment avenues. The fund has a reasonable track record of monthly dividend distribution. The periodic income in the form of dividend can help investors plan out their finances in a holistic manner. The NAV appreciation in addition to this adds to overall return. In the current market environment arbitrage funds can provide a relatively safer investment avenue for short term parking of funds. The fully hedged equity portfolio takes the worry off for the investor and targets higher yield from arbitrage opportunities. On the debt side, the fund manager focuses on quality debt instruments with an average maturity of 245 days.
