Best Arbitrage Mutual Funds
Arbitrage funds profit from small price gaps between the cash and futures markets rather than from market direction. Returns are usually modest and cash-like, but they are taxed as equity.
Top arbitrage mutual funds by 3Y returns
20Direct plan, Growth option — ranked by 3-year CAGR. Open a fund for NAV history, rolling returns, risk metrics and peer rank.
As of 05 Oct 2026, Tata Arbitrage Fund (Direct plan, Growth option) leads arbitrage mutual funds on 3-year CAGR at +7.47%, followed by Invesco India Arbitrage Fund at +7.47% and Kotak Arbitrage Fund at +7.46%. Across 41 arbitrage mutual funds the category averaged +7.19% over three years, at an average expense ratio of 1.50%. All figures are computed from public AMFI NAV history and recomputed daily; past returns do not predict future ones.
| 1 | Tata Arbitrage Fund Tata | ★★★★☆ | +6.8% | +7.5% | +6.9% | 1.57% | ₹22,684Cr |
| 2 | Invesco India Arbitrage Fund Invesco | ★★★★★ | +6.9% | +7.5% | +7.1% | 2.20% | ₹27,818Cr |
| 3 | Kotak Arbitrage Fund Kotak Mahindra | ★★★☆☆ | +6.8% | +7.5% | +7.0% | 2.32% | ₹70,783Cr |
| 4 | Aditya Birla Sun Life Arbitrage Fund Aditya Birla Sun Life | ★★★☆☆ | +6.8% | +7.4% | +6.8% | 1.24% | ₹26,029Cr |
| 5 | Edelweiss Arbitrage Fund Edelweiss | ★★★★☆ | +6.7% | +7.4% | +6.9% | 1.58% | ₹14,863Cr |
| 6 | Mirae Asset Arbitrage Fund Mirae Asset | ★★★☆☆ | +6.8% | +7.4% | +6.8% | 2.48% | ₹3,657Cr |
| 7 | Axis Arbitrage Fund Axis | ★★★☆☆ | +6.8% | +7.3% | +6.8% | 1.40% | ₹9,735Cr |
| 8 | UTI - Arbitrage Fund UTI | ★★★★☆ | +6.7% | +7.3% | +6.8% | 1.26% | ₹10,939Cr |
| 9 | Nippon India Arbitrage Fund Nippon India | ★★★★☆ | +6.8% | +7.3% | +6.8% | 1.34% | ₹16,381Cr |
| 10 | Bandhan Arbitrage Fund Bandhan | ★★★☆☆ | +6.6% | +7.3% | +6.8% | 1.63% | ₹8,114Cr |
| 11 | ICICI Prudential Arbitrage Fund ICICI Prudential | ★★★☆☆ | +6.7% | +7.3% | +6.8% | 1.63% | ₹32,407Cr |
| 12 | HDFC Arbitrage Fund HDFC | ★★☆☆☆ | +6.7% | +7.3% | +6.7% | 1.50% | ₹24,544Cr |
| 13 | SBI Arbitrage Fund SBI | ★★★☆☆ | +6.6% | +7.3% | +6.8% | 1.48% | — |
| 14 | ITI Arbitrage FundSmall fund ITI | ★★☆☆☆ | +6.6% | +7.3% | +6.2% | 1.10% | ₹82.74Cr |
| 15 | Baroda BNP Paribas Arbitrage Fund Baroda BNP Paribas | ★★★★★ | +6.4% | +7.2% | — | 1.47% | ₹1,250Cr |
| 16 | Sundaram Arbitrage Fund Sundaram | ★★★☆☆ | +6.9% | +7.2% | — | 0.99% | ₹483.23Cr |
| 17 | HSBC Arbitrage Fund HSBC | ★★★★☆ | +6.7% | +7.2% | — | 1.45% | ₹2,652Cr |
| 18 | DSP Arbitrage fund DSP | ★★★☆☆ | +6.6% | +7.2% | +6.7% | 1.17% | ₹6,460Cr |
| 19 | Union Arbitrage Fund Union | ★★☆☆☆ | +6.7% | +7.2% | +6.6% | 1.61% | ₹243.13Cr |
| 20 | LIC MF Arbitrage Fund LIC | ★★★☆☆ | +6.7% | +7.1% | +6.6% | 1.04% | ₹249.64Cr |
NAV data as of 05 Oct 2026. Returns are CAGR for periods ≥1 year, computed from AMFI NAV history. Ratings are WealthTicker’s own, ranked within sub-category peers — not a SEBI or agency rating. See our methodology for every formula. This is data, not investment advice.
Popular comparisons
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Understand arbitrage mutual funds
From the blog
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05 Oct 2026
The median arbitrage fund returned 6.60% in the year to 1 October 2026 against 6.47% for liquid funds, and none lost money over three months.
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02 Oct 2026
Savings account, sweep-in FD, overnight or liquid fund? How fast each pays out, what it earned in the past year, and what can go wrong.
Debt funds after the tax change: where to park cash
02 Oct 2026
Liquid and money market funds returned about 6.5% in the year to October 2026. Taxed at slab since 2023, they now compete with arbitrage funds after tax.
Frequently asked questions
What are arbitrage mutual funds?
Arbitrage funds profit from small price gaps between the cash and futures markets rather than from market direction. Returns are usually modest and cash-like, but they are taxed as equity.
Which is the best arbitrage fund right now?
Tata Arbitrage Fund by Tata currently ranks first among arbitrage mutual funds by 3-year CAGR at +7.47%. Rankings move with NAVs — past returns don't guarantee future performance.
What returns have arbitrage mutual funds given?
The category has averaged +6.64% over 1 year, +7.19% annualized over 3 years, +6.65% annualized over 5 years — peer averages over the live funds in the category, computed from AMFI NAV history.
How are arbitrage mutual funds taxed?
Equity taxation: gains within 1 year are short-term and taxed at 20%; beyond 1 year, long-term gains above ₹1.25 lakh a year are taxed at 12.5%.