Is it good to invest in Arbitrage Funds?

[avikrish]

Hi All,

Since the savings account interest rates are reduced massively, even the fd's now will get reduced.

Looking to park the planned purchase amounts in arbitrage Funds.
Why not liquid ? Why arbitrage? Ans: taxation is on equity terms when it comes to arbitrage, so looking into that.

Please share your views and experiences.

Is it a good instrument? Any risks involved?

Which arbitrage fund is good ?

What tax documents are required to get filed if chosen this instrument?

 

[ronakshah]

I'm invested in arbitrage funds from last 2 years and so far everything looks good. Kotak/Edelweiss is good or you can choose from any big fund house. Returns are more or less similar.

 

[avikrish]

I'm invested in arbitrage funds from last 2 years and so far everything looks good. Kotak/Edelweiss is good or you can choose from any big fund house. Returns are more or less similar.

Related to redemption, did you face any issues? If tried.

What are all the tax documents that we need for tax filing?

 

[abhiaj_geek]

Yeah, it is a good idea. Gives decent returns throughout multiple years as arb funds also hold bonds

 

[ronakshah]

Related to redemption, did you face any issues? If tried.

What are all the tax documents that we need for tax filing?

I have not done any redemption yet but it gets credited on T+2 basis. Also taxation is similar to other equity mfs. I believe you can provide capital gains statement for filing if you do some redemption.