IDEAL DAY TO INVEST IN ARBITRAGE SCHEMES
Markets have hit the upper circuits twice & trading is halted. Sensex has touched 14272. As explained in some of my notes earlier, there is a reverse co relation of NAV of arbitrage schemes to SENSEX i.e. when the SENSEX goes up, NAV of arbitrage schemes go down & vice versa. I expect that NAVs of most of the arbitrage schemes should be down by at least 2-4 paisa; giving great entry point for investment. I expect that those who invest today will benefit by at least an extra half to one % p.a. ( post tax returns) more than those who invest on other days.
To reiterate, schemes like J M Arbitrage Advantage, HDFC Arbitrage scheme have an uninterrupted quarterly dividend payout track record since their inception ( both during bull phase of the market as well as the bear phase of the market) . Others like Kotak Equity Arbitrage ( which has monthly payout option) has only skipped two dividends in the past 36 months.
Kindly invest even on a lump sum basis today to take advantage of the current market conditions. Since markets have run up so much on one day, some profit booking will creep in ,giving rise to volatility & giving Fund Managers unwinding opportunities as well ( which add to returns in a shorter span of time).
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