#MahindraManulife #MutualFund #NFO #ArbitrageFund #IncomePlusArbitrage #TaxEfficiency #DebtFund #InvestSmart #HybridFund
CHANDIGARH: Mahindra Manulife Mutual Fund has announced the launch of a new solution aimed at offering investors a relatively stable, yet tax-efficient avenue for long-term capital appreciation: the Mahindra Manulife Income Plus Arbitrage Active Fund of Fund (FOF).
This open-ended scheme is strategically designed to predominantly invest in units of actively managed debt-oriented and arbitrage mutual fund schemes, offering a tactical blend of fixed income stability and equity-like tax benefits.
📅 Key Dates for the New Fund Offer (NFO)
The New Fund Offer (NFO) window for the scheme is scheduled as follows:
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NFO Open Date: November 21, 2025
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NFO Close Date: December 1, 2025
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Continuous Sale & Repurchase Reopening: December 8, 2025
🎯 Investment Strategy: Capitalizing on Stability and Spread
The core objective of the FOF is to generate long-term capital appreciation by dynamically allocating its portfolio between two distinct strategies:
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Debt-Oriented Schemes: Provides a stable accrual component, generating regular income and managing volatility.
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Arbitrage Schemes: Aims to generate low-risk returns by exploiting price differentials of the same assets in different markets (typically between the cash and futures segments of the equity market). Arbitrage strategies are considered equity-oriented for taxation purposes.
This active allocation strategy, which will be managed by Amit Garg, Rahul Pal, and Mitul Doshi, is built upon the fund house’s established investment framework focusing on active duration management, rigorous credit evaluation, and tactical arbitrage allocation.
🛡️ Addressing Investor Challenges with Smart Structuring
Mahindra Manulife highlights that this product is specifically positioned to address several challenges facing investors, particularly those in higher tax brackets who traditionally rely on fixed-income investments:
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Tax Efficiency: The FOF structure is designed to benefit from favorable long-term capital gains (LTCG) taxation. For units held beyond 24 months, the gains are taxed at 12.5% (as per prevailing tax laws), which is significantly lower than the marginal slab rates typically applied to traditional debt instruments and fixed deposits.
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Reinvestment Risk: By incorporating debt funds, the FOF helps manage the reinvestment risk associated with the unpredictable nature of fixed-income interest rate cycles.
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Market Volatility: The inclusion of arbitrage schemes allows the fund to capture spreads, benefiting from price inefficiencies that often emerge during volatile market periods, thus offering relatively steadier outcomes compared to pure equity funds.
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Liquidity: Being an open-ended scheme, it offers investors the flexibility of liquidity, unlike many traditional fixed-income avenues.
According to the fund house, the combination of a debt accrual component and a low-risk, equity-taxed arbitrage component creates a robust structure that seeks to outperform traditional fixed-income options on a post-tax, risk-adjusted basis.
An Ideal Solution for Conservative and Tax-Conscious Investors
The Income Plus Arbitrage Active FOF is expected to appeal strongly to conservative to moderate investors, high-net-worth individuals, and corporate treasuries looking for tax-efficient solutions to park their surplus funds over a medium-term horizon (two years and above). It provides a mechanism for investors to participate in the capital markets without taking on the typical risks associated with directional equity investing, while concurrently minimizing the impact of higher slab-based taxation on returns.
The Mahindra Manulife Income Plus Arbitrage Active FOF is benchmarked against the NIFTY 50 Arbitrage Total Return Index (TRI), signaling its focus on capturing stable returns generated through market spreads and the debt portfolio.
#MahindraManulife #MutualFund #NFO #ArbitrageFund #IncomePlusArbitrage #TaxEfficiency #DebtFund #InvestSmart #HybridFund
