Samco Mutual Fund to launch Samco Arbitrage Fund

Samco Mutual Fund launched the Samco Arbitrage Fund with the goal of investing in arbitrage opportunities between the spot and futures prices of exchange-traded stocks as well as within the derivative segment, contingent on the scheme’s asset allocation pattern and investment objective. The scheme may make investments in debt and money market securities if the fund manager believes there are no good arbitrage opportunities. 

Samco MF to launch Samco Arbitrage Fund

The Samco Arbitrage Fund, an open-ended scheme that invests in arbitrage opportunities, has been announced by Samco Mutual Fund. Subscriptions for the scheme’s new fund offer, or NFO, will be accepted from November 11 to November 20. The program will reopen for ongoing sales and purchases by December 3 at the latest.

Objective of NFO Samco Arbitrage Fund 

The objective is to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and the derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments.

Details of the Samco Arbitrage Fund Scheme

The scheme, which will be run by Paras Matalia, Dhawal Ghanshyam Dhanani, and Umeshkumar Mehta, will be compared to the NIFTY 50 Arbitrage TRI. It will only provide growth options along with regular and direct options. If the investment is redeemed or switched out on or before 30 days from the date of unit allocation, an exit load of 0.25% will be applied. After 30 days from the date of unit allocation, there will be no exit load if the investment is redeemed or exchanged.

Information about the Samco Arbitrage Fund

For lump sum investments, the minimum application amount is Rs 5,000, with subsequent multiples of Re 1. A minimum of 12 instalments and an application fee of Rs 500 or more are required for SIP. The additional purchase amount must be at least Rs 500 and then in multiples of Re 1.

Equities and equity-related instruments will account for 65–100% of the assets (hedged exposure), while debt and money market instruments will make up 0–35%. According to Regulation 52(6)(c), the highest total expense ratio (TER) that can be allowed is 2.25%.

Conclusion 

Investors seeking low volatility returns in the short to medium term who wish to focus primarily on arbitrage opportunities in the cash and derivative segments of the equity markets will find the plan suitable.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.