NFO: Union Mutual Fund Launches New FoF Income Plus Arbitrage Active

Union Mutual Fund has introduced a new open-ended scheme – Union Income Plus Arbitrage Active Fund of Fund (FoF). The fund combines exposure to arbitrage strategies and debt-oriented mutual fund schemes. Subscriptions for the New Fund Offer (NFO) open on May 22, 2025, and close on June 5, 2025. The scheme will reopen for continuous purchase and redemption within 5 working days from the date of allotment.

Fund Overview

• Fund Name: Union Income Plus Arbitrage Active FOF Reg G
• Type: Open-ended
• Category: Fund of Funds – Debt
• Launch Date: May 22, 2025
• Close Date: June 5, 2025
• Minimum Investment: ₹1,000
• Plans: Growth, IDCW
• Lock-in Period: NA
• Exit Load: 0
• Riskometer: Low to Moderate

• Benchmark: NIFTY Composite Debt Index (60), NIFTY 50 Arbitrage TRI (40)

Scheme Structure and Allocation

The fund invests in units of existing arbitrage and debt mutual fund schemes. The asset allocation will be managed actively, with up to 65% of the portfolio allocated to arbitrage or debt-oriented schemes, depending on prevailing market conditions. The goal is to generate income over a medium- to long-term period.

Tax Treatment

If the fund maintains an allocation in arbitrage funds to meet equity classification thresholds, it could qualify for equity-like taxation. This treatment is applicable if units are held for more than 2 years. The structure follows the latest tax regulations applicable to Fund of Funds (FoFs).

Read more: Union Mutual Fund Files Draft for Union Gold ETF

Conclusion

The fund offers exposure to arbitrage and debt schemes under a single umbrella and will operate within the tax and regulatory framework applicable to FoFs.

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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. 

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