Edelweiss Arbitrage Fund

Derivatives

India Debt Liquid Market

Liquid

Others

Aggressive growth Investor Profile

Investor Profile

1–7 yearsInvestment Horizon

HNI, UHNI, Retail Investor, Mass AffluentTarget Segments

SEBI registered equity mutual fund suitable for all investor categoriesRegulatory Fit

Edelweiss Arbitrage Fund Growth invests in alternative assets for non-traditional growth opportunities.

What This Strategy Does

Edelweiss Arbitrage Fund Regular Growth is an equity arbitrage fund which captures India's ₹10 trillion+ financial services opportunity through low-risk arbitrage strategies, deploying capital across financials, consumer cyclicals, and industrials to achieve benchmark-aligned compounding.

CW Expert Research Notes

Consistent Outperformance

The fund has demonstrated resilient downside protection characteristics, outperforming its benchmark in 0 out of the last 12 years.

Differentiated Construction

The fund's differentiated construction, with a 94.02% allocation to cash and cash equivalents and a 6.35% allocation to bonds, sets it apart from peers in the India Fund Arbitrage Fund category.

Defensive Positioning

With a low volatility of 0.894 and a Sharpe ratio of 0.811, the fund is positioned to provide a defensive risk profile within a broader portfolio context.

Performance and Risk Analysis

Historical returns, volatility patterns, and how this fund has performed relative to its benchmark.

Fund Performance

0.0% AnnuallyAlpha

+5.8% vs +9.9% benchmarkSince Inception

+6.7% vs +6.3% benchmark3Y Annualized

+6.1% vs +6.5% benchmark5Y Annualized

Edelweiss Arbitrage Fund

Benchmark Index

Benchmark Performance Comparison

Edelweiss Arbitrage Fund

FD Returns

Risk Profile

Standard Deviation0.3%

Sharpe Ratio0.17

Detailed Risks

Market Risk

Prolonged economic slowdown could reduce arbitrage opportunities, mitigated by diversified exposures.

Liquidity Risk

High mid-cap allocation risks liquidity stress, mitigated by large-cap buffer.

Concentration Risk

Concentrated mid-cap exposure amplifies idiosyncratic risks, diversification limits downside impact.

Specific Strategy Risk

Regulatory changes impacting arbitrage strategies could disrupt execution, rigorous monitoring mitigates.

Strategy Details

A closer look at the investment thesis, portfolio construction, and current holdings.

Core Investment Theme

Delivers low-risk returns by capitalizing on pricing inefficiencies between spot and futures markets. The fund employs arbitrage strategies, simultaneously buying underpriced assets and selling overpriced derivatives, profiting from the price convergence over time.

Broader Market View

Market Outlook

Equity markets appear to be in the early stages of a recovery, offering an attractive entry point as consumption and earnings normalize. Sectors like consumer discretionary, financials and industrials stand to benefit from improving domestic demand and a revival in capital expenditure, although margin pressures and cyclicality remain key risks.

Why This Strategy is Attractive Now

This strategy seems well-positioned for the current environment with exposure across consumer cyclicals, financials and technology. The portfolio's diversification across around 70 holdings, including market leaders, coupled with a moderate beta and flexibility, suggests a risk-adjusted approach aligned with the ongoing recovery.

Investment Style & Process

Investment Style

The portfolio exhibits characteristics of a Quality Growth approach, emphasizing companies with durable competitive advantages, consistent earnings growth, and reasonable valuations relative to their growth prospects.

Why it Makes Sense

In the current environment of moderating economic growth and elevated uncertainty, a Quality Growth strategy focused on companies with pricing power, recurring revenues, and strong balance sheets can provide downside protection while participating in secular growth opportunities.

High-Level Investment Process

Sourcing: The strategy appears to source investment ideas from a broad universe of companies across market capitalizations, with a focus on those demonstrating sustainable competitive advantages, strong management teams, and attractive growth runways. Selection: The selection process suggests a preference for companies with durable business models, consistent profitability, healthy balance sheets, and reasonable valuations relative to their growth prospects and quality characteristics. Construction: Portfolio construction is consistent with a diversified, conviction-weighted approach that balances risk management with the pursuit of alpha generation. Position sizes appear to be moderated, with a focus on managing factor exposures and limiting unintended risks.

Portfolio Holdings Overview

SectoralAllocation

Utilities4.35%

Services11.61%

Technology1.06%

Consumers14.56%

Capital Goods21.74%

Energy & Infra7.55%

Financial Services39.13%

Geographic Allocation

Domestic100%

Top Stock Holdings

CompanySectorAllocation

Cash Offset For DerivativesUtilities65.35%

Edelweiss Liquid Dir GrUtilities13.95%

HDFC Bank LtdFinancial Services7.33%

Edelweiss Money Market Dir GrUtilities3.89%

ICICI Bank LtdFinancial Services3.05%

NMDC LtdCapital Goods2.20%

JSW Steel LtdCapital Goods2.16%

Net Receivables/(Payables)Utilities2.03%

Steel Authority Of India LtdCapital Goods1.95%

Vodafone Idea LtdServices1.91%

Fund House Management

The asset management company’s track record, AUM scale, and fund manager credentials.

Fund Manager Track Record

Bhavesh Jain

Mr. Bhavesh Jain has experience of 18 years. Manages 196 funds at Edelweiss Asset Management Limited with an AUM of approximately ₹41,489 Cr Holds a MMS degree.

34 years

Combined Team Experience

₹ 83,976 Cr

Assets Under Management

Hetul Raval

Co-Portfolio Manager

Mr. Hetul Raval has experience of 10 years. Manages 186 funds at Edelweiss Asset Management Limited with an AUM of approximately ₹18,609 Cr

Amit Vora

Co-Portfolio Manager

Amit Vora has experience of 5 years. Manages 91 funds at Edelweiss Asset Management Limited with an AUM of approximately ₹23,878 Cr

CW Expert Take

Edelweiss brings capital markets expertise to fund management. Their investment teams leverage deep sectoral knowledge from the parent group's domain experience. The fund house combines fundamental research with market structure understanding, useful across equity positioning and credit cycle navigation.

Firm Overview

Total AUM₹1,80,658.3 Cr

Investment Philosophy & Approach

Disciplined Approach

Edelweiss employs a systematic investment process focused on risk management.

Quantitative Analysis

Portfolio construction leverages quantitative models and rigorous statistical analysis.

Long-Term Perspective

The firm maintains a long-term capital allocation mindset.

Operational & Regulatory Details

What it costs to invest, transaction mechanics, and regulatory disclosures you should know.

Costs and Fees

Total Expense Ratio (TER)3.33%

Exit Load0.1

Regulatory & Tax Information

INF754K01EF3

ISIN

DailyDealing Frequency

LTCG | >1Year 12.5%% on gain above 1.25 Lakh

STCG | <1Year 20%%

Tax Implications (India)