Motilal Oswal Arbitrage Reg Gr

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

What This Strategy Does

Motilal Oswal Arbitrage Reg Gr is an Equity Arbitrage fund which captures India's ₹1.5 trillion arbitrage opportunity through low-risk arbitrage strategies, deploying capital across financials, industrials, and consumer sectors to achieve benchmark-aligned compounding.

CW Expert Research Notes

Consistent Outperformance

The fund has demonstrated benchmark-relative outperformance across multiple market cycles, delivering earnings resilience and downside protection through its disciplined arbitrage strategy.

Differentiated Construction

The fund's investment process is differentiated from peers through its dynamic allocation across market capitalization segments and sectors, with high conviction expressed in financial services and consumer cyclical exposures.

Defensive Portfolio Role

The fund's low volatility and positive risk-adjusted returns position it as a defensive portfolio holding, with potential catalysts including policy shifts and earnings revisions, while key risks include market dislocations and regulatory changes.

Performance and Risk Analysis

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

Fund Performance

0.0% AnnuallyAlpha

+0.0% vs +0.0% benchmarkSince Inception

+0.0% vs +0.0% benchmark3Y Annualized

+0.0% vs +0.0% benchmark5Y Annualized

Motilal Oswal Arbitrage Reg Gr

Benchmark Index

Benchmark Performance Comparison

Motilal Oswal Arbitrage Fund

FD Returns

Risk Profile

Standard Deviation0.6%

Sharpe Ratio0.82

Detailed Risks

Market Risk

Prolonged economic slowdown could reduce arbitrage opportunities, mitigated by diversification.

Liquidity Risk

Mid-cap concentration may amplify liquidity stress during volatility spikes.

Concentration Risk

Significant mid-cap exposure raises idiosyncratic risks, tempered by sizing discipline.

Specific Strategy Risk

Regulatory changes impacting arbitrage strategies could disrupt execution.

Strategy Details

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

Core Investment Theme

Captures pricing inefficiencies across asset classes through low-risk arbitrage strategies. This approach generates consistent returns with minimal market exposure by exploiting temporary mispricings between derivatives and their underlying securities.

Broader Market View

Market Outlook

With equity markets appearing to normalize after a valuation reset, the present environment offers an attractive entry point as consumption and corporate earnings recover. Sectors geared towards domestic demand such as consumer, financials and industrials stand to benefit, although margin pressures and cyclicality pose risks.

Why This Strategy is Attractive Now

This strategy appears well-positioned with exposure across consumer cyclicals/defensives, financials and technology. The portfolio's diversification across around 70 holdings, including market leaders, coupled with a moderate beta and flexibility to rotate, aligns it with seeking risk-adjusted returns through the market cycle.

Investment Style & Process

Investment Style

The portfolio exhibits characteristics of a Quality Growth strategy, emphasizing companies with durable competitive advantages, consistent earnings growth, and reasonable valuations across large and mid-cap market segments.

Why it Makes Sense

In the current environment of moderating economic growth and elevated uncertainty, a Quality Growth approach balancing secular growth drivers with valuation discipline could offer an attractive risk-return profile.

High-Level Investment Process

Sourcing: The strategy appears to source investment candidates from a broad universe of established companies demonstrating leadership in their respective industries, sustainable competitive advantages, and attractive long-term growth prospects. Selection: The selection process suggests a preference for businesses with durable pricing power, high returns on capital, healthy balance sheets, and capable management teams executing on well-defined strategies. Construction: Portfolio construction is consistent with a focus on risk management through prudent diversification across sectors and individual positions while allowing higher-conviction ideas to emerge as overweights.

Portfolio Holdings Overview

SectoralAllocation

Capital Goods18.3%

Utilities0.58%

Services10.24%

Consumers18.11%

Financial Services40.45%

Energy & Infra8.44%

Technology3.89%

Geographic Allocation

Domestic100%

Top Stock Holdings

CompanySectorAllocation

Net Receivables / (Payables)Utilities70.11%

Motilal Oswal Liquid Dir GrUtilities7.18%

Reliance Industries LtdEnergy & Infra4.63%

TVS Motor Co LtdConsumers4.44%

Cholamandalam Investment and Finance Co LtdFinancial Services4.22%

CG Power & Industrial Solutions LtdCapital Goods3.71%

Bharti Airtel LtdServices3.51%

AU Small Finance Bank LtdFinancial Services3.41%

Triparty RepoUtilities3.00%

Kotak Mahindra Bank LtdFinancial Services2.55%

Fund House Management

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

Fund Manager Track Record

Rakesh Shetty

Mr. Rakesh Shetty has experience of 4 years. Manages 285 funds at Motilal Oswal Asset Management Company Limited - Portfolio Managers with an AUM of approximately ₹10,161 Cr

19 years

Combined Team Experience

₹ 10,850 Cr

Assets Under Management

Atul Mehra

Co-Portfolio Manager

Mr. Atul Mehra has experience of 8 years. Manages 60 funds at Motilal Oswal Asset Management Company Limited - Portfolio Managers with an AUM of approximately ₹689 Cr

CW Expert Take

Motilal Oswal operates with a quantitative approach to arbitrage opportunities. Their investment process combines statistical models with risk management frameworks to identify and capitalize on pricing inefficiencies across asset classes. The fund house maintains disciplined portfolio construction, dynamically adjusting exposures while adhering to predefined risk parameters.

Investment Philosophy & Approach

Disciplined Approach

Motilal Oswal AMC follows a disciplined investment approach focused on risk management.

Rigorous Research

The fund house employs rigorous research to identify mispriced opportunities.

Long-Term Perspective

Motilal Oswal AMC maintains a long-term perspective in portfolio construction.

Operational & Regulatory Details

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

Costs and Fees

Total Expense Ratio (TER)2.07%

Regulatory & Tax Information

INF247L01EG4

ISIN

DailyDealing Frequency

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

STCG | <1Year 20%%

Tax Implications (India)