InvestorQ : What exactly is an arbitrage fund?
Diya Chitale made post

What exactly is an arbitrage fund?

Answer
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rhea Babu answered.
2 years ago


There are a variety of products in the mutual fund spectrum. There are pure equity products, pure debt products and hybrid products. Then there are also products like ETFs which basically derive their value from an underlying asset like gold or global equities. In the middle of this spectrum, there are certain products which may have equity as their asset class but have the characteristics of a debt product. One such product is an Arbitrage Fund. It is basically an equity fund but the combination of equities and futures gives it the unique characteristics of a debt product.