Park surplus money in income plus arbitrage funds

WITH DEBT FUNDS LOSING INDEXATION BENEFITS, THIS IS A TAX-EFFICIENT OPTION

- SAIKAT NEOGI

INVESTORS CAN CONSIDER income plus arbitrage funds as an attractive avenue to park their short-to medium-term surplus.

These funds combine stable accrual and tax efficiency, making them a smart alternative to traditional debt allocations.

Income plus arbitrage funds allocate just under 65% to high-quality debt instruments such as corporate bonds, government securities, and money market instruments. The rest is invested in equity arbitrage strategies, where fund managers exploit short-term price differences between cash and futures markets to generate additional yield.