The market has been continuously declining for the last 6 months. Investors in the stock market are facing losses. Investors are suffering huge losses in Mutual Funds (MF) along with their portfolio. But this is not completely true. It is not true that all those investing in Mutual Funds are suffering losses. There is also a category of MF which has performed amazingly even in the falling market. It has made profits for the investors. Nifty has seen a decline of more than 17% in the last 6 months. Whereas during this period arbitrage funds have outperformed.
Gave an average return of 3.7% in 6 months
Giving more details on this, Mitali Jain of CNBC-Awaaz said that arbitrage funds have done wonders. There has been a huge sell-off in the market for the last 6 months. Nifty has seen a decline of more than 17% in 6 months. But during this time arbitrage funds have outperformed. In 6 months, it has given an average return of 3.7%.
What are arbitrage funds?
Arbitrage funds are a category of mutual funds in which 65% of the money is invested in equity and the rest in debt and money market. In this, fund managers take advantage of the difference in the prices of cash and futures. These funds work on the strategy of taking advantage of fluctuations.
Arbitrage funds did wonders
If we look at the data of the last 6 months, the AUM of Arbitrage Funds increased to Rs 2,00,652 crore. The percentage of increase in AUM was 5.68%. While its average return during this period was 3.70%. If we look at ELSS Funds, the AUM was only Rs 41,272 crore. The percentage of increase in AUM was 11.60%. While its average return during this period was negative 2.60%. If we look at the data of Hybrid Funds, the AUM in the last 6 months was Rs 1,02,137 crore. The percentage of increase in AUM was 10.20%. While its average return during this period was negative 7.30%.
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