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Tag: Arbitrage

Tax Arbitrage: The nudge to solve the current debt mutual fund crisis

Tax Arbitrage: The nudge to solve the current debt mutual fund crisis

Finance
By Somnath MukherjeeIt’s been the non-proverbial Ides of several months now for the credit markets. It started with the IL&FS default last year, but it has been a series of blow-ups since then — the latest being downgrades in two Reliance ADAG group companies. The most immediate impact has been on certain debt mutual funds (MF), that have been large investors in several companies that have come under stress. The most debilitating effect though isn’t about drop in prices — after all MFs are market instruments and subject to price volatility — it is about the absolute lack of liquidity in bonds that come under stress. Given that MFs, for most parts, are open-ended vehicles (i.e., unitholders have a right to withdraw their investments on demand), it is the appropriateness of MFs investing...
LIC Mutual Fund launches Arbitrage Fund

LIC Mutual Fund launches Arbitrage Fund

Finance
LIC Mutual Fund launched LIC MF Arbitrage Fund, an open-ended scheme investing in arbitrage opportunities. The new fund offer (NFO) opens on January 4 and will close on January 18. The fund will be managed by Yogesh Patil (Equity) and Marzban Irani (Debt). Investors can make investment in the scheme in a lump sum. The investment objective of the scheme is to generate income by taking advantage of arbitrage opportunity that potentially exist between cash and derivative market and within the derivative segment along with investments in debt securities and money market instruments. The fund manager will use a disciplined quantitative analysis while accessing the arbitrage opportunities. The scheme will hold minimum of 65 per cent in equities and equities related instruments, derivatives incl...