FincashKotak Equity Arbitrage Fund Vs Reliance Arbitrage Fund

Kotak Equity Arbitrage Fund and Reliance Arbitrage Fund both belong to the arbitrage category ofHybrid Fund. Arbitrage funds are a type ofMutual Fundsthat leverage on the price differences of different markets to earn profits. Arbitrage Funds are named after the arbitrage strategy that they use. The returns of these funds are dependent on the volatility of the invested asset on the market. They make use of the market inefficiencies to generate returns for their investors. Though both Kotak Equity Arbitrage Fund Vs Reliance Arbitrage Fund belong to the same category there differ in some parameters like AUM,NAV, performances, etc. So, to make a better investment decision, lets have a look at both the schemes in a detailed manner.

Kotak Equity Arbitrage Fund was launched in the year 2005 with an aim to generate capital appreciation byInvestingin a derivative segment of the equity market and seek income by investing in arbitrage opportunities in the cash. A portion of the portfolio is invested in debt andmoney marketinstruments. Some of the top holdings of the fund (as on 30th June 2018) are Net Current Assets, Kotak Liquid Dir Gr, HDFC Bank Ltd, Axis Bank Ltd, Tata Steel Ltd, etc. Kotak Equity Arbitrage Fund is been currently managed by Deepak Gupta.

Reliance Arbitrage Fund, earlier known as Reliance Arbitrage Advantage Fund was launched in the year 2010. The fund seeks to generate income by taking advantage of the arbitrage opportunities that potentially exists between cash and derivative market. As the fund also invests in debt and money market securities, it profits from regular income. Some of the top holdings of Reliance Arbitrage Fund as on 30th June 2018 are Cash Offset For Derivatives, HDFC Bank Ltd, Housing Development Finance Corp Ltd, Axis Bank Ltd, ICICI Bank Ltd. etc. The fund is currently managed jointly by Payal Kaipunjal and Kinjal Desai.

Though both Kotak Equity Arbitrage Fund Vs Reliance Arbitrage Fund belong to the arbitrage category of hybrid funds, nevertheless; they differ on account of various parameters. So, let us understand the differences between both the schemes based on these parameters that are divided into four sections, namely, basics section, performance section, yearly performance section, and other details section.

Current NAV, Fincash Rating, and Scheme Category are some of the comparable elements that form part of the basics section. It is the first section in the comparison of both the schemes. The comparison of current NAV reveals that there is a drastic difference between the NAV of both the schemes. As on 31st Jul, 2018, the NAV of Kotak Equity Arbitrage Fund was INR 25.3528, while the NAV of Reliance Arbitrage Fund was INR 18.1855. With respect to theFincash Rating, it can be said that both the funds are rated as4-Star. The summary comparison of the basics section is as shown in the table given below.

This section compares the Compounded Annual Growth Rate orCAGRreturns of both the schemes at various intervals. Some of the time intervals include 3 Month Return, 6 Month Return, 1 Year Return, and Return since Inception. The comparison of CAGR returns shows that both Kotak Equity Arbitrage Fund and Reliance Arbitrage Fund has performed closely in many instance. The table given below shows the summary of performance section.

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The comparison of absolute returns generated by both the schemes for a particular year is compared in the yearly performance section. It is the third section in the comparison of both the schemes.

It is the last section on the comparison of both the schemes that compares the elements like AUM, minimumSIPand lump sum investment and others. The comparison of AUM reveals that there is a significant difference in the AUM of both the schemes. As on 30th June 2018, the AUM of Kotak Equity Arbitrage Fund was INR 11,764 crore, while of Reliance Arbitrage Fund was INR 8,123 crores. Similarly, the minimumSIP investmentfor both the schemes is also different. The SIP amount forReliance Mutual Funds scheme is INR 100 and forKotak Mutual Funds scheme is INR 500. However, the minimum lumpsum amount for both the schemes is the same, that is, INR 5,000. The table given below shows the comparison of other details section.

Equity, Since 31 May 18RELIANCE4%₹632 Cr5,419,500

Equity, Since 30 Apr 19HDFCBANK4%₹607 Cr2,697,000

Equity, Since 30 Apr 19HDFCBANK5%₹446 Cr1,980,000

Equity, Since 31 Dec 17RELIANCE4%₹346 Cr2,964,500

Equity, Since 30 Apr 15SUNPHARMA4%₹337 Cr7,885,900

Click to Invest in Kotak Equity Arbitrage Fund

Thus, based on the above pointers, it can be said that both the schemes differ on account of various parameters. Consequently, investors should be very cautious before investing in any of the Mutual Fund schemes. They should understand the modalities of the scheme completely. Also, if required, they can consult afinancial advisorfor an opinion. This will help the individuals to attain their goals on time in a hassle-free manner.

All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.

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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements before choosing a fund, or designing a portfolio that suits your needs.

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