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Tata Arbitrage Fund re-opens for fresh subscriptions

Arbitrage funds look to benefit from the price anomalies between the cash and futures markets.

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Last Updated: Mar 26, 2020, 02.42 PM IST
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Tata Arbitrage Fund has reopened today for fresh subscription, additional subscription, switch-in into the scheme, new Systematic Investment Plan (SIP) registrations and Systematic Transfer Plan (STP) registrations. Tata Mutual Fund had suspended fresh subscriptions in Tata Arbitrage Fund due to the volatile situation in the equity markets on March 19.

Arbitrage funds look to benefit from the price anomalies between the cash and futures markets.

“The arbitrage spreads are back to reasonable levels. That is, equity futures are trading at a premium to the spot prices. In fact, the spreads are at 4-5%, almost around the peak spread levels. To protect the interest of the existing and new investors, we had stopped fresh inflows in the fund last week,” said Rahul Singh, CIO-equities, Tata Mutual Fund. "But now the trend has effectively reversed towards a positive direction and we have reopened the fund for fresh subscriptions,” added Rahul Singh.

The fund house had said at the time of shutting the scheme for subscription that once the markets stabilize, spreads would go back to being at positive levels or may not be as high as we have seen in the past few months. The trend would effectively reverse towards a positive direction and the scheme will start taking fresh inflows, the fund house added.
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