DSP Arbitrage Fund

DSP Arbitrage Fund

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Benchmark: NIFTY 50 Arbitrage Index info icon

19.77K people have invested in this fund

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This fund


NIFTY 50 Arbitrage Index


CRISIL 1 Year T-Bill Index




This fund


NIFTY 50 Arbitrage Index


CRISIL 1 Year T-Bill Index


team 19.77K people have invested in this fund as of

This is an Equity Diversified, Arbitrage fund with NIFTY 50 Arbitrage Index as its benchmark. The risk level for this fund is categorized as Low Risk.

Total AUM

4,965.51 crores as of Jun 30, 2024

Age of Fund

6 years 5 months since Jan 25, 2018

Expense Ratio

0.98% as of Jul 12, 2024

Exit Load

Nil - If the units

Ideal holding period

6 months+

Rolling Returns

Bars show distribution of returns in given range for selected time period

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Things to know before you invest

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What is in DSP Arbitrage Fund?

  1. This fund invests mostly in equity arbitrage opportunities with a small portion allocated to debt instruments.
  2. It aims to take advantage of stock price mismatches in two different markets by buying stocks in the normal 'spot' market & selling futures of the same stock in the 'derivatives' market to find & book profits.
  3. Fund provides relatively smoother investment journey with benefit of equity taxation.
  1. Offers the potential to earn relatively risk-free, stable returns similar to fixed income investments.
  2. Get the benefit of equity taxation despite the low-risk orientation.
  1. Consider this fund if you
    • Are looking for alternative to fixed income.
    • Are in high tax bracket & looking for better tax adjusted returns vs Fixed Income.
    • Understand that returns in arbitrage position are linked to risk free rate & can fluctuate based on interest rate regime in the economy.
  1. Arbitrage fund carries Low Risk.
  2. Fund invest in equity but returns will not be as high as equity funds.So if very high returns is your goal, this is not the right fund.
  3. Returns from arbitrage funds are technically risk-free but arbitrage opportunities are more prevalent during volatile or upward-trending markets.
  4. In case of falling market & period of uncerntatinity, arbitrage spread can be negative & arbitrage fund can have negative/low returns in short term.

Fund managers:

Abhishek Singh

Abhishek Singh

Total work experience of 17 years. Managing this fund since April 2022.
Total work experience of 17 years. Managing this fund since April 2022.

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Kedar Karnik

Kedar Karnik

Total work experience of 18 years. Managing this fund since June 2020.
Total work experience of 18 years. Managing this fund since June 2020.

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Prescribed asset allocation: 65% - 100% Equity & Equity related instruments including Equity Derivatives including Index Futures, Stock Futures, Stock Options, Index Options etc. , 0% - 35% Debt and money market instruments

Current Allocation

as of Jun 30, 2024

Top holdings

No Data to display

Top Sectors

Arbitrage (cash Long)


Top holdings

No Data to display

Top holdings

DSP Savings Fund - Direct Plan - Growth


TREPS / Reverse Repo Investments


ICICI Securities Limited


Julius Baer Capital (India) Private Limited


Bank of Baroda


Cash & cash equivalents


Credit rating profile



Cash & Equivalent








Instrument break-up



Money market instruments





Yield to Maturity

7.48 %

Modified Duration

0.43 Years

Portfolio Macaulay Duration

0.46 Years

Average Maturity

0.12 Years

Portfolio turnover ratio

12.70 last 12 months

Compare Performance

Performance highlights over last



Cumulative returns on

Annual returns

Current value


Good Returns

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Negative Returns

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vs Category

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vs Benchmark

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  • Historical Returnsas of with investment of10,000

This fund NIFTY 50 Arbitrage Index ^ CRISIL 1 Year T-Bill I #
CAGR Current Value CAGR Current Value CAGR Current Value

Income distribution Cum Capital Withdrawal (IDCW) Distributed

Record Date IDCW per unit NAV Before NAV After

Chart type

Invested as

Invested Amount

Invested since

This fund


NIFTY 50 Arbitrage Ind

CRISIL 1 Year T-Bill I



Funds Annual returns Current Value Absolute Growth

Chart type:

Invested as

Invested Amount

Invested period

Funds Minimum Median Maximum % times -ve returns % times returns > 7%

Date of allotment: Jan 25, 2018.

Period for which fund's performance has been provided is computed based on last day of the month-end preceding the date of advertisement

Different plans shall have a different expense structure. The performance details provided herein are of Regular Plan.

Since inception returns have been calculated from the date of allotment till June 30, 2021

Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments

Rolling returns have been calculated based on returns from regular plan growth option.

^ Fund Benchmark # Additional Benchmark

Fund Details

Fund Details

Investment Objective

The investment objective of the Scheme is to generate income through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative market. Investments may also be made in debt & money market instruments.
There is no assurance that the investment objective of the scheme will be realized.

Fund Type

Equity – Diversified

An open ended scheme investing in arbitrage opportunities


Level of Risk in the fund

View details

Minimum Investment

Rs.  100 Lumpsum
Rs.  100 SIP– 12 instalments
Rs.  100 Minimum Additional Purchase



Arbitrage funds are suitable for parking your idle funds for short or medium investment tenures at low risk for tax efficient returns. To invest in the DSP Arbitrage Fund, Click on the green INVEST button on the left-hand side of the webpage (Click here). If you are an existing DSP Mutual Fund investor, you can start investing immediately. If you are new to DSP Mutual Funds, you will have to create a portfolio by filling out the necessary details. If you are new to Mutual Funds, you will have to fulfill KYC requirements. Follow the on-screen instructions to get started. You can also invest in DSP Arbitrage Fund through your mutual fund distributor.

The average return of arbitrage funds depends on market conditions, market volatility and futures premium. Returns of arbitrage funds usually are related to short term interest rates in the economy. Investors can check the past performance of the DSP Arbitrage Fund by clicking on the (performance) section of the DSP website. One can check both lump sum and SIP returns. We have shown how the DSP Arbitrage Fund has performed versus its benchmark index (NIFTY 50 Arbitrage Index) and its additional benchmark (CRISIL 1 Year T-bill Index) over the last 1, 3, and 5 years and since its inception.

  • There is no price risk in arbitrage funds, since the equity exposure of arbitrage funds is completely hedged. By definition, arbitrage means risk-free profits. The returns of arbitrage funds are not dependent on whether the market goes up or down.
  • For cash and carry arbitrage, the profit is the difference between future and cash prices of a stock. The profit is locked in, whether the price of the stock goes up or down.
  • Arbitrage funds are suitable for parking idle funds for a few weeks, months or a year and getting higher returns than savings / current account.
  • Unlike liquid funds, there is no credit risk in arbitrage funds.
  • There is no counterparty risk is arbitrage funds. Counterparty risk refers to the other party in a trading transaction not honoring their obligation. Settlement of all futures contracts (including futures contract settlements in arbitrage trades) are guaranteed by the stock exchange.
  • Arbitrage funds enjoy equity taxation. When investors redeem their arbitrage fund units, the redemption proceeds are subject to capital gains taxation. There are two types of capital gains: short-term and long-term depending on the investment holding period.

- Short-term capital gains: If the holding period of mid-cap fund units is less than 1 year, gains (if any) are considered to be short-term capital gains. Short-term capital gains in equity funds are taxed at 15%.

- Long-term capital gains: If the holding period of mid-cap fund units is more than 1 year, gains (if any) are considered to be long-term capital gains. Long-term capital gains in excess of Rs 1 lakh in a financial year are taxed at 10%. Income Distribution cum capital withdrawals (IDCW) or dividends from arbitrage funds are taxed as per the income tax rate of the investor.

Arbitrage funds have low risk. It is suitable for parking your idle funds for few months to a year or longer. However, there is no guarantee of capital safety or assured returns in arbitrage funds. Investors should know that arbitrage returns depends on market conditions and market volatility. In extreme market conditions, arbitrage spreads can turn negative and these funds can give negative/low returns in the short term. Therefore, investors should be prepared to remain invested to minimum 3 ? 4 months.

The recommended duration for staying invested in the DSP Arbitrage fund is typically around 6 months to 2 years. This time frame aligns with the short to medium-term nature of these funds, which aim to capitalize on short-term market inefficiencies. Arbitrage funds are suitable for parking your short to medium funds to get tax efficient returns with minimal risk.

Arbitrage funds invest at least 65% of their assets in equity and equity related securities. The balance portion of the assets under management is invested in debt and money market instruments. In the equity portion of the portfolio, positions are taken only in stocks which are part of the Futures and Options (F&O) segment because the equity portion is fully hedged through futures. Hedging implies taking opposite positions in the same underlying assets. For example, if you buy shares worth Rs 1 crore in Stock A, you will sell futures of Stock A worth Rs 1 crores to create a fully hedged position. DSP Arbitrage Funds consider the following factors for selecting securities for the fully hedged equity part of the fund portfolio:-

  • Liquidity ? how quickly the positions could be converted to cash (actively traded shares / futures).
  • Better arbitrage spreads (difference between futures and cash price) than market average.
  • Stocks that tend to undergo backwardation (cash price higher than futures price) in between or near expiry. For example, futures price of a stock is Rs 100 and cash price is Rs 95. The arbitrage profit will be Rs 5, if you sell futures and buy the stock simultaneously. Suppose before expiry, the futures price is Rs 98 and cash price is Rs 99. If you buy the future and sell the stock your holding, you will make an additional profit of Rs 1. Therefore, your total profit on 1 share will be = Rs 5 + 1 = Rs 6.
  • Consistent futures and options rollover levels.
  • Maximum weight in 1 stock is less than 10%, to limit concentration risk

For the debt portion of the portfolio the fund invests in debt mutual fund units, G-Secs / T-Bills, and debt and money market instruments of up to 1 year maturity and of highest credit quality.

Arbitrage funds are not high risk. Arbitrage funds are considered to be low risk funds since arbitrage by definition is risk free profits. However, these funds may be volatile in the short term and may even give negative returns in extreme market conditions.

team 19.77K peoplehave invested in this fund as of