Capitalmind Arbitrage Fund Draft Filed With SEBI

Capitalmind Asset Management has filed the draft offer document with the Securities and Exchange Board of India for the launch of Capitalmind Arbitrage Fund. The proposed scheme is an open-ended hybrid mutual fund categorised as an Arbitrage Fund under SEBI regulations.

It is designed to generate income over the short to medium term by exploiting pricing inefficiencies in the equity cash and derivatives markets. The filing indicates Capitalmind’s entry into the arbitrage fund segment with a low-volatility investment product.

Scheme Category and Benchmark

The Capitalmind Arbitrage Fund is classified as an Arbitrage Fund, which requires a minimum allocation of 65% in equity and equity-related instruments, including derivatives used for hedging and arbitrage. The scheme is benchmarked against the Nifty 50 Arbitrage Total Return Index.

This benchmark measures returns generated through equity arbitrage strategies rather than directional equity movements. It represents a standard reference for evaluating arbitrage fund performance in India.

Investment Objective and Risk Profile

The primary investment objective of the scheme is to generate income through arbitrage opportunities in the equity markets. The fund aims to maintain relatively low volatility by simultaneously taking offsetting positions in the cash and derivatives segments.

It is positioned as a low-risk product within the mutual fund risk classification framework. The draft document clarifies that returns are not guaranteed and depend on prevailing market spreads and execution efficiency.

Asset Allocation

Under normal market conditions, between 65% and 100% of the scheme’s assets will be invested in equity and equity-related instruments, including equity derivatives deployed for arbitrage. Up to 35% of the portfolio may be allocated to other arbitrage opportunities, debt, and money market instruments.

This allocation flexibility allows the fund to manage liquidity and returns when equity arbitrage spreads are limited. The scheme may also invest up to 10% of its assets in units of InvITs, subject to applicable regulatory limits.

Read More: JioBlackRock Mutual Fund Launches Low and Short Duration Funds.

Conclusion

The filing of the Capitalmind Arbitrage Fund draft with SEBI marks the proposed introduction of a low-risk hybrid mutual fund focused on equity arbitrage strategies. The scheme combines active arbitrage execution with conservative debt management to deliver relatively stable returns.

With flexible asset allocation, multiple arbitrage strategies, and high liquidity features, the fund targets investors seeking short-term to medium-term income with lower volatility. The final launch will be subject to regulatory approval from SEBI.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.