Ideal for investors looking to invest in relatively low-risk arbitrage opportunities and seeking equity taxation on capital gains
MUMBAI: Franklin Templeton (India) announced the launch of its open-ended arbitrage fund — Franklin India Arbitrage Fund (FIAF). The fund will aim to achieve capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivative segments of equity markets, as well as arbitrage opportunities within the derivative segment, with the remainder allocated to debt and money market instruments. The fund will be managed by Rajasa K, VP & Portfolio Manager, Emerging Markets Equity – India; Yogik Pitti, Senior Manager, Emerging Markets Equity – Trading; and Pallab Roy, Portfolio Manager, India Fixed Income.
The New Fund Offer opens on November 4, 2024, and will close on November 18, 2024, during which units will be available at Rs. 10/- per unit.
The fund will employ an active investment strategy, adjusting its defensive or aggressive postures depending on available opportunities. It will aim to capitalize on the implied cost of carry between the underlying cash and derivatives market, offering potential returns for investors. Furthermore, holding arbitrage funds for over a year will allow investors to benefit from lower capital gains tax rates, making it a tax-efficient investment option.
Speaking on the launch of the fund, Avinash Satwalekar, President, of Franklin Templeton–India, said, “Arbitrage funds in India are ideal for investors seeking short-term income generation without exposing their investments to high risk. Franklin India Arbitrage Fund is a valuable addition to our investment portfolio as we continue to expand our product suite to meet the varied needs of our investors, based on their risk profiles. As this is a low-risk fund, it is a valuable investment opportunity for both individual and institutional clients in India.”
NFO Features
| Type Of Scheme | An open-ended scheme investing in arbitrage opportunities |
| Investment Objective: | The investment objective of the scheme is to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and 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. |
| NFO Dates | November 4, 2024 to November 18, 2024 |
| Rajasa K, Yogik Pitti, and Pallab Roy | November 21, 2024 |
| Managed By | 0.25% if units are redeemed/switched out within 30 days from the date of allotment.NIL thereafter |
| Minimum Amount | Subscription: Fresh Purchase – Rs.5,000/-. Additional Purchase – Rs.1,000/-. Redemption: Rs.1,000/-. The amount for subscription and redemption over the minimum amount specified above is any amount in multiple of Re. 1/-. SIP: Minimum amount INR 500/- |
| Benchmark | Nifty 50 Arbitrage Index |
| Exit Load | 0.25% if units are redeemed / switched out within 30 days from the date of allotment.NIL thereafter |
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
The above product labeling assigned during the New Fund Offer (NFO) is based on an internal assessment of the scheme characteristics or model portfolio and the same may vary post-NFO when the actual investments are made.
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