Zerodha Arbitrage Fund Launches with ₹5,000 Minimum Investment

Returns are not guaranteed. They depend on available arbitrage spreads, execution costs, and market volatility. When spreads shrink or disappear, the fund can allocate up to 35% of its portfolio to short-term debt, the fund house said.

Zerodha Fund House, a joint venture between the trading platform Zerodha and investment firm smallcase, runs index funds and exchange-traded funds. The firm also manages a fund-of-funds strategy. It serves more than 12.5 lakh investors. In June, the firm partnered with Swiggy to let delivery partners invest as little as ₹100 into mutual funds through the Swiggy rider app, managing investments via WhatsApp.

CEO Vishal Jain called that partnership "another example of how technology can make investing simple and accessible." He also noted that arbitrage funds are not risk-free substitutes for bank fixed deposits. Investors should evaluate exit loads and the trading costs the fund incurs before committing money, Jain said.

"The fund is designed for investors looking to park surplus cash for shorter holding periods without equity market volatility," Jain said.