Income plus arbitrage FOF

What is the primary characteristic of an income plus arbitrage FOF' s investment strategy?

• Primarily invest in large cap equity stocks

• Focus solely on govt securities and treasury bills

• Invest in a combination of underlying debt and arbitrage mutual fund schemes

• Specialize in international equity market

If you hold units of an income plus arbitrage FOF more than 24 months ,how are the capital gains typically taxed?

• As per slab rate

• At 12.5% with exemption of 1.25lakh

• At 12.5%

• Exempt from all taxes

What is the main reason income plus arbitrage FOF's have gained popularity after 1 April 2025 in India?

• Introduction of higher tax benefits for equity funds

• Change in taxation rules for traditional debt mutual fund

• Guarantee of fixed return regardless of market condition

• lower expense ratio as compared other fund categories

What is potential disadvantage of investing in income plus arbitrage FOF compared to directly investing in underlying debt and arbitrage funds?

• Higher overall portfolio volatility

• Lower expense ratio due to FOF structure

• Double layer of expense ratio (FOF expense ratio + Underlying  fund expense ratio)

• Reduced diversification across asset classes

What is the short term & long term criteria of taxation in income plus arbitrage FOF?

• Less than 1 year and more than 1 year

• Less than 2 year & more than 2 year

• Less than 3 year & more than 3 year

• No long term or short term No

Which taxation will be applicable if investor is holding his units for less than 2 years?

• As per slab rate

• 20% on capital gain

• 12.5% with exemption of 1.25 lakh

• 12.5%

What will be the minimum allocation arbitrage in income plus arbitrage FOF?

• Less than 65%

• Atleast 65%

• Minimum 35%

• More than 35%

Why might an investor choose an income plus arbitrage FOF instead of investing directly in arbitrage or income generating fund?

• To actively manage individual position within underlying fund

• To gain exposure to diverse income streams and arbitrage strategies without direct fund selection

• To specialize in a single high conviction arbitrage trade

• To eliminate investment risk

What is a crucial role of the Fund manager of an income plus arbitrage FOF?

• Executing daily stock trades on behalf of all investors

• providing direct loan to arbitrageurs

• developing new arbitrage strategies for the market

• Due diligence and selection of underlying funds

Who should invest in DSP income plus arbitrage FOF?

• 1.Investors looking for investment option  similar to debt funds &  are in higher tax bracket and seeking a tax efficient solution.

• Investors who are conservative wants to take low risk

• Investors who wants to invest in arbitrage opportunities

• Investors who wants tax exemption