Franklin Templeton Mutual Fund To Launch Franklin India Arbitrage Fund

Franklin Templeton Mutual Fund has launched the Franklin India Arbitrage Fund, an open-ended scheme primarily focused on arbitrage opportunities. This New Fund Offer (NFO) opens on November 4, 2024, and closes on November 18, 2024, with no entry load and a nominal exit load of 0.25% if redeemed within 30 days from the allotment (nil thereafter). The minimum subscription is set at Rs.5,000, with increments in multiples of Re.1​.

Investment Objective

Franklin India Arbitrage Fund aims to provide capital appreciation and income by leveraging arbitrage opportunities in the equity market’s cash and derivative segments. The fund may also invest in debt and money market instruments for added stability. However, there is no guarantee that the investment objective will be achieved.

This scheme is ideal for investors targeting short-term income through a hybrid investment approach that combines arbitrage with fixed income and money market instruments. The goal is to generate returns while maintaining low-risk exposure.

Benchmark & Fund Management

Franklin India Arbitrage Fund’s performance is benchmarked against the Nifty 50 Arbitrage Index. The fund managers, Rajasa Kakulavarpu, Yogik Pitti, and Pallab Roy, bring their expertise to manage this scheme​.

Investors can choose between regular and direct plans, each offering growth and Income Distribution cum Capital Withdrawal (IDCW) options. These options provide flexibility, allowing investors to either reinvest their distributions or receive payouts.

Why Consider Arbitrage Funds?

Arbitrage funds, like the Franklin India Arbitrage Fund, are designed to benefit from price differences in the cash and derivative markets, making them a low-risk investment choice. By leveraging hedged positions, arbitrage funds can generate consistent returns, even in volatile market conditions. This scheme will allow investors to participate in the equity market while minimizing direct exposure to market fluctuations. 

Conclusion: With its dual focus on arbitrage opportunities and low-risk fixed-income investments, the Franklin India Arbitrage Fund could appeal to conservative investors seeking short-term gains. As always, investors should assess the suitability of this scheme based on their financial goals and risk tolerance​.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.