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The new fund offer (NFO) combines arbitrage and debt-oriented investment strategies within a single portfolio.
The scheme is aimed at investors looking for relatively lower volatility and a combination of accrual-oriented debt exposure and arbitrage opportunities, particularly over a two- to three-year investment horizon.
Nippon India Mutual Fund has launched the Nippon India Income Plus Arbitrage Omni Fund of Fund, a new fund offer (NFO) that combines arbitrage and debt-oriented investment strategies within a single portfolio. The NFO opens for subscription on August 17, 2026, and will close on August 31, 2026.
The scheme is aimed at investors looking for relatively lower volatility and a combination of accrual-oriented debt exposure and arbitrage opportunities, particularly over a two- to three-year investment horizon.
The scheme will invest around 95% to 100% of its assets in a combination of arbitrage mutual funds, actively managed debt mutual funds and passive debt mutual funds. It can invest up to 5% in debt and money market instruments.
The scheme will maintain a minimum allocation of 35% to arbitrage funds, while the combined allocation to active debt funds, passive debt funds and money market instruments will remain below 65% of the portfolio.
This structure allows the fund to combine two different investment approaches. The arbitrage component seeks to capture price differentials between the cash and derivatives markets, while the debt component is intended to provide income through investments in fixed-income securities.
Unlike investors who separately invest in debt and arbitrage funds and manage their allocation themselves, the new fund of fund will provide exposure to multiple underlying schemes through a single portfolio.
The fund manager will select the underlying schemes and can alter the allocation between them depending on market conditions and the investment strategy.
The structure also allows the portfolio to be rebalanced without investors having to independently switch between different mutual fund schemes.
The fund house has positioned the scheme as a tax-efficient option for investors with a longer investment horizon. If the units are held for more than 24 months, the gains are taxed at 12.5% as long-term capital gains, while for a holding period of up to 24 months, taxation is as per the investor’s applicable slab rate.
The Nippon India Income Plus Arbitrage Omni Fund of Fund aims to attract investors who seek exposure to both arbitrage and debt strategies through a single mutual fund structure and who are comfortable with the risks associated with the underlying investments.
The fund house has positioned the product for investors with a two- to three-year investment horizon and relatively lower tolerance for interest-rate volatility.
Disclaimer:Disclaimer: The views and investment tips shared in this article are for general information purposes only. Readers are advised to consult a certified financial advisor before making any investment decisions.[/note
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Ask News18For holdings of up to 24 months, gains from the Nippon India Income Plus Arbitrage Omni Fund of Fund will be taxed according to the investor’s applicable slab rate.
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August 17, 2026, 14:35 IST
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