WhiteOak Capital Arbitrage Fund NFO: Review, Date & NAV

WhiteOak Capital Arbitrage Fund: Complete Overview

WhiteOak Capital Mutual Fund (MF WhiteOak) launched the WhiteOak Capital Arbitrage Fund under its AMC ‘WhiteOak Capital Asset Management Limited’. It is an open-ended equity program that makes investments in arbitrage opportunities.

The NFO date is from August 28 to September 03, 2024, with an NFO price of Rs.500 and in multiples of Rs.1 thereafter. WhiteOak Capital Mutual Fund AUM is Rs.11,878.38 crore (as of 30 Jun 2024). The exit load of the Scheme is 0.25% if units get redeemed within 7 days.

Today at the WhiteOak Capital Arbitrage Fund NFO blog, we're dedicated to providing you with useful information on this new NFO, including financial characteristics and prior performance if any.

WhiteOak Capital Arbitrage Fund NFO Details

The scheme is suitable for investors who want to generate short to medium-term returns by investments mostly in cash and derivatives market arbitrage opportunities. The scheme is a low-risk scheme. There is no assurance that the scheme's investment goal will be met. The scheme will invest under normal conditions 65-100% of its units in equity and equity-related instruments with equity derivatives, 0-35% in debt instruments and money market instruments, such as the margin funds used in derivative deals, and 0-10% in REITs & InVITs units.

The scheme has declared a defensive allocation pattern also in case alternative investment yields higher profits or if there are very few arbitrage opportunities in the market. The defensive circumstances allocation pattern is 0-65% of its units in equity and equity-related instruments with equity derivatives, 35-100% in debt instruments and money market instruments, such as the margin funds used in derivative deals, and 0-10% in REITs & InVITs units.

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Fund Overview

The WhiteOak Capital Mutual Fund NFO minimum subscription amount is Rs.500 and in multiples of Rs.1 thereof.

How To Invest In The NFO After The Closure Date?

If you have missed participating in the NFO and now want to invest in the same Scheme on a continuous basis, then within 5 business days after the allotment date, when the Scheme will reopen; you will have the option to participate and invest directly in the Mutual Fund by spending at NAV based price by logging on to your Demat account and search for “WhiteOak Capital Arbitrage Fund” or directly with the AMC or simply click the ‘Banner’ below.

The Objective of The Fund

The Scheme aims to produce returns by investing mostly in equity market arbitrage opportunities in the cash and derivatives areas, with the remaining portion going into debt and money market instruments. Nevertheless, there can be no assurance or guarantee that the scheme's investment goals will be met.

Asset Allocation (% of Total Assets) of the Scheme's Portfolio will be as follows:

Peers of WhiteOak Capital Arbitrage Fund

Since this scheme is a new scheme, hence no comparable data on its past performance against its peers is available. WhiteOak Capital Mutual Fund returns approximately 5.77% and 5% annually on average over the last three and five years.

Risk Factors In Such Funds

• A significant portfolio turnover rate is also anticipated for the scheme, particularly in an erratic market. Additionally, the Scheme suggests executing arbitrage transactions in multiple markets at the same time, which could lead to a large transaction cost and portfolio turnover.

• When using arbitrage tactics across different market segments, there is an execution risk that could lead to lost investment opportunities, losses, or expensive transaction fees.

• Even though the futures market is usually more liquid than the underlying cash market, there is no guarantee that the scheme will always have access to ready funds to buy and close out a particular future contract.

• The scheme's success will be directly impacted by the NIFTY 50 Arbitrage TRI's performance. Therefore, any modification in composition due to weighting or stock selection will affect the scheme.

• Fixed-income products, including corporate and government bonds, money market instruments, and derivatives, are subject to interest rate and price risk. In general, the values of current fixed-income instruments decrease when interest rates rise, and vice versa when interest rates decrease.

• Due to variables affecting the underlying assets, investments in REITs and InvITs are prone to daily price changes and are therefore considered volatile. 
  
  

Past Performance of Arbitrage Funds

WhiteOak Capital Arbitrage Fund NFO-Who Can Invest?

This Fund is ideal for those who want to achieve short to medium-term returns by investments mostly in cash and derivatives market arbitrage opportunities.

WhiteOak Capital Arbitrage Fund-Growth Fund Managers:

• Mr. Ramesh Mantri (For Equity Securities)

• Mr. Ashish Agrawal (For Equity Securities)

• Mr. Piyush Baranwal (For Debt Securities).

Conclusion

The WhiteOak Capital Arbitrage Fund is appropriate for investors who are low risk-tolerant and aiming for capital returns over a short horizon in an equity scheme that primarily invests in arbitrage opportunities.

Always assess your Financial Goals, Risk tolerance, time horizons, etc. before making an investment decision. 

Disclaimer: This NFO analysis is provided solely for informative reasons and should not be construed as investment advice. Always conduct research and talk with a financial advisor before investing.