Some mutual fund advisors are asking their clients to choose arbitrage funds over liquid, ultra short or short duration funds for their short-term needs. The primary reason for this shift is the fear among debt mutual fund investors regarding the safety of their investments, say advisors.
“If you are investing for one year and want to stay away from the fear of debt market, you can choose arbitrage funds. Arbitrage funds take the advantage of uncertainties in the market and give good, tax-efficient returns,” says Suresh Sadagopan, Founder, Ladder7 Financial Advisories, a Navi-Mumbai-based financial planning firm.
