GEMGAZE

April 2021

Three GEMs from the 2019 GEMGAZE have performed reasonably well through thick and thin and figure prominently in the 2021 GEMGAZE too. JM Arbitrage Fund and SBI Arbitrage Opportunities Fund have been shown the exit door by virtue of their lacklustre performance and Edelweiss Arbitrage Fund and Nippon India Arbitrage Fund have been accorded a red carpet welcome.

Kotak Equity Arbitrage Fund Gem

Incorporated in September 2005, Kotak Equity Arbitrage Fund has an AUM of Rs 16,362 crore. The fund is a blend of value and growth style of investing with an objective to generate income through arbitrage opportunities emerging out of pricing anomaly between the spot and futures market, and also through the deployment of surplus cash in fixed income instruments. The fund has given annualized return of 7.11% since inception. The one-year return of the fund is 3.64% (4.22% for the direct plan) modestly ahead of the category average of 2.93% (3.58%). Top five holdings constitute 32.81% of the portfolio. The portfolio turnover ratio is 457.78% and the expense ratio is 1 % (0.41% for the direct plan). The fund is benchmarked against the Nifty Fifty Arbitrage Total Return Index with Mr. Hiten Shah efficiently managing the fund since October 2019.

Edelweiss Arbitrage Fund Gem

The Rs 3393 crore Edelweiss Arbitrage Fund, incorporated in June 2014, has earned a one-year return of 3.45% (4.19% for the direct plan) trailing the category average return of 2.94% (3.58% for the direct plan). Top five holdings constitute 17.39% of the portfolio. The portfolio turnover ratio is 357% and the expense ratio is 1.09%. The fund is benchmarked against the NIFTY 50 Arbitrage Total Return Index. The fund is managed by Bhavesh Jain since June 2014 and Dhawal Dalal since December 2016.

Nippon India Arbitrage Fund Gem

Nippon India Arbitrage Fund, incorporated in October 2010, has an AUM of Rs 9,936 crore. Its one-year return is 3.58% (4.3% for direct plan), as against the category average return of 2.94% (3.58% for direct plan). The top five holdings constitute 23.75% of the portfolio. The portfolio turnover ratio of the fund is a massive 1298%. The expense ratio is comparatively low at 1.01% (0.34% for direct plan). The fund is benchmarked against the NIFTY 50 Arbitrage Total Return Index. The fund is managed by Anand Devendra Gupta since September 2018 and Anju Chhajer since February 2020.

IDFC Arbitrage Fund Gem

IDFC Arbitrage Fund is a fourteen-year old fund with an AUM of Rs 6,756 crore. The fund was launched in December 2006, and has given 6.76% since its launch. Its one-year return of 3.27% (4.03% for direct plan) is a tad higher than its category average of 2.94% (3.58% for direct plan) at present. Top five holdings constitute 21.31% of the portfolio. While the portfolio turnover ratio is high at 253%, the expense ratio is very low at 0.97% (0.37% for direct plan), an icing on the cake, indeed. The fund has been managed by Yogik Pitti since June 2013, Harshal Joshi since October 2016, and Arpit Kapoor since March 2017.

ICICI Prudential Equity Arbitrage Fund Gem

Incorporated in December 2006, ICICI Prudential Equity Arbitrage Fund has an AUM of Rs 10,456 crore. The fund has performed consistently over a long period of time and has given annualized return of 7.15% since inception. The one-year return of the fund is 3.4% (3.94% for direct plans) slightly ahead of the category average of 2.94% (3.58% for direct plans). Top five holdings constitute 18.52% of the portfolio. The portfolio turnover ratio is 188% and the expense ratio is 0.98% (0.45% for direct plan). The fund is benchmarked against the Nifty Fifty Arbitrage Fund Total Return Index with Mr. Kayzad Eghlim, Mr. Nikhil Kabra and Mr Rohan Maru.  efficiently managing the fund since February 2011, December 2020 and December 2020 respectively.