When it comes to parking funds for the short term, the average investor prefers liquid, overnight or ultra-short-term funds. However, of late some investors are looking at arbitrage funds, given equity taxation and exposure to money market yield. Though it can improve post-tax returns, the volatility involved in such investments cannot be ignored.
Arbitrage funds for short term
Arbitrage funds look to capture the difference in price in the spot market and that in the futures market.
