Deutsche Asset Management India has launched DWS Arbitrage Fund, an open ended equity scheme.
The new fund, which is open for subscription from 13 August to 22 August 2014, will invest in arbitrage opportunities that may exist in the equity and derivatives markets.
Additionally, the fund intends to primarily invest in the cash futures arbitrage strategy that buys a stock in the cash market and sells it in the futures market, resulting in a hedge, where the fund portfolio is locked.
It aims to generate returns by investing in arbitrage opportunities available in equity markets. It claims to have potential to earn higher post tax returns compared to debt and money market funds.
The arbitrage strategy will enable the fund to be unaffected by price movements in the current and futures markets.
The fund also offers additional features such as lower tax incidence for investors with regard to dividend distribution and capital gains tax, compared to debt and liquid funds.
Suresh Soni, managing director & CEO of Deutsche Asset Management India said, "The DWS Arbitrage Fund is an ideal investment solution for investors, seeking returns through arbitrage opportunities that exist in the equity and derivatives markets."