HDFC Arbitrage Fund Direct Growth Review 2026: NAV, Returns, Portfolio & Should You Invest?
- September 18, 2026
- Posted by: Chaitanya Auti
- Category: Mutual Funds
HDFC Arbitrage Fund Direct Growth Plan is at ₹33.766 as of 21 May 2026, with scheme AUM of ₹25,509 Cr. Its 1-year, 3-year and 5-year returns are 6.39%, 7.42% and 6.52%, and the scheme sits in the Low Risk bucket.
Our view is that this fund suits investors who want relatively steady arbitrage-style participation rather than sharp market-linked swings. The longer history is more balanced than the benchmark’s recent slump, and the portfolio is built around large, liquid financial and cash-management positions.
Quick facts
| Particular | Details |
|---|---|
| NAV | ₹33.766 as of 21 May 2026 |
| AUM | ₹25,509 Cr |
| Expense Ratio | 0.41% |
| Launch Date | 31 Dec 2012 |
| Risk Category | Low Risk |
| Benchmark | Nifty 50 |
| Fund Category | Hybrid |
| Exit Load | 0.25% on or before 1M, Nil after 1M |
| Fund Managers | Arun Agarwal, Nandita Menezes, Anil Bamboli |
The fund is managed by Arun Agarwal, Nandita Menezes and Anil Bamboli.
Source data date: as of 21 May 2026
Performance
| Period | Fund return | Benchmark return |
|---|---|---|
| 1M | Data not available | Data not available |
| 3M | Data not available | Data not available |
| 1Y | 6.39% | -7.13% |
| 3Y | 7.42% | 5.82% |
| 5Y | 6.52% | 5.72% |
The recent 1-year return is modest in absolute terms, but it stands well ahead of the benchmark’s negative 1-year move. That matters because it shows the strategy has preserved a more stable path than the index over the same stretch.
The medium-term picture is also constructive. The 3-year return of 7.42% is ahead of the benchmark’s 5.82%, and the 5-year return of 6.52% is likewise above the benchmark’s 5.72%, so the fund has kept a small but clear edge over time.
The path has not been perfectly linear, though. The return series shows periods of mild drift, recovery and short setbacks, which is typical for an arbitrage-oriented hybrid fund, but the longer trend remains relatively contained compared with equity-led market swings.
For investors, the main takeaway is that the fund has not relied on aggressive market direction to build returns. Its pattern is steadier than the benchmark’s recent behaviour, and the longer-term numbers suggest consistency matters more here than chasing sharp upside.
Source data date: as of 21 May 2026
Should you BUY or HOLD HDFC Arbitrage?
A fund’s past returns alone don’t tell you whether you should buy it today or continue holding it.
The right decision depends on factors such as your current allocation, purchase price, risk profile, investment horizon and the role this fund plays in your overall portfolio.
Already holding HDFC Arbitrage? Thinking of investing now?
Peer comparison
| Fund | 1Y return | 3Y return | 5Y return |
|---|---|---|---|
| HDFC Arbitrage Fund Direct Growth Plan | 6.39% | 7.42% | 6.52% |
| Quant Arbitrage Fund Direct Growth Plan | 7.61% | Data not available | Data not available |
| WOC Arbitrage Fund Direct Growth Plan | 7.17% | Data not available | Data not available |
| Franklin India Arbitrage Fund Direct Growth Plan | 7.03% | Data not available | Data not available |
| Motilal Oswal Arbitrage Fund Direct Growth Plan | 6.94% | Data not available | Data not available |
| Invesco India Arbitrage Fund Direct Growth Plan | 6.84% | 7.49% | 7.02% |
This assessment is prepared by Uniapps Investment Adviser Pvt. Ltd. under SEBI Registered Investment Adviser registration INA000017639.
On 1-year returns, the fund trails the stronger recent figures from Quant Arbitrage Fund Direct Growth Plan, WOC Arbitrage Fund Direct Growth Plan and Franklin India Arbitrage Fund Direct Growth Plan, while staying close to Motilal Oswal Arbitrage Fund Direct Growth Plan. That means its recent pace is competitive, but not the fastest among the available peers.
The longer-term comparison is more encouraging where data is available. HDFC Arbitrage Fund Direct Growth Plan is ahead of the benchmark in both 3-year and 5-year returns, and it also sits slightly behind Invesco India Arbitrage Fund Direct Growth Plan on those longer windows. The short-term comparison and the longer-term comparison therefore tell a slightly different story: recent performance is steady rather than standout, while the medium-term track remains respectable.
Source data date: as of 21 May 2026
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Portfolio: where your money goes
| Holding | Sector | Weight |
|---|---|---|
| HDFC Money Market Fund – Direct Plan – Growth Option | Domestic Mutual Funds Units | 8.27% |
| HDFC Bank Ltd.£ | Bank | 5.05% |
| ICICI Bank Ltd. | Bank | 4.86% |
| HDFC Liquid Fund – Direct Plan – Growth Option | Domestic Mutual Funds Units | 3.72% |
| Reliance Industries Ltd. | Crude Oil | 3.51% |
| Bharti Airtel Ltd. | Telecom | 3.28% |
| Axis Bank Ltd. | Bank | 2.96% |
| HDFC Ultra Short Term Fund – Direct Plan – Growth Option | Domestic Mutual Funds Units | 2.63% |
| HDFC Ultra Short to Short Term Fund – Direct Plan – Growth Option | Domestic Mutual Funds Units | 2.42% |
| TREPS – Tri-Party Repo | Cash & Cash Equivalents and Net Assets | 2.39% |
The top 10 holdings account for approximately 39.09% of the portfolio.
To see all holdings, visit the HDFC Arbitrage Fund Direct Growth Plan page
The largest disclosed holding is HDFC Money Market Fund – Direct Plan – Growth Option at 8.27%, which is sizeable but not dominant on its own. The next few positions are clustered in the 5% to 3% range, so the portfolio does not depend on a single holding for most of its exposure.
Weight does ease down by the time we reach the tenth holding, where the position is 2.39%. That step-down from 8.27% to 2.39% suggests a moderate spread across individual positions rather than a sharp concentration in just one or two names.
Because the top 10 together make up 39.09% and the scheme discloses 53 holdings, the visible book appears to be spread across a longer tail. That may reduce dependence on any one line item, although the largest positions are still likely to have greater influence on short-term portfolio behaviour.
Source data date: as of 21 May 2026
Who should invest
This fund is better aligned with conservative investors who want Low Risk exposure and are comfortable with returns that are steadier than equity-led market funds. Its 1-year result is positive while the benchmark is negative, and the 3-year and 5-year numbers stay ahead of the benchmark, which supports an investor who values consistency over sharp upside.
The main trade-off is that the return profile is measured, not explosive. Investors with a short to medium horizon who want lower volatility may find the pattern suitable, especially if they prefer a portfolio that leans on liquid and arbitrage-style positions rather than broad market risk.
Tax and exit load
| Holding period | Tax rate | Description |
|---|---|---|
| Units held less than 1 year | 20% | Short-term capital gains tax |
| Units held more than 1 year | 12.5% | Long-term capital gains tax |
Exit load is 0.25% if units are sold on or before 1 month, and there is no exit load after the holding period.
Source data date: as of 21 May 2026
Frequently asked questions
What is the current NAV of HDFC Arbitrage Fund Direct Growth Plan?
The current NAV is ₹33.766 as of 21 May 2026.
What are the fund’s 1-year, 3-year and 5-year returns?
The fund’s returns are 6.39% for 1 year, 7.42% for 3 years and 6.52% for 5 years.
How does it compare with the benchmark?
It has stayed ahead of the Nifty 50 over 1 year, 3 years and 5 years. The benchmark return is -7.13% for 1 year, 5.82% for 3 years and 5.72% for 5 years.
How does it compare with peer funds on 1-year return?
Its 1-year return of 6.39% is below Quant Arbitrage Fund Direct Growth Plan at 7.61%, WOC Arbitrage Fund Direct Growth Plan at 7.17% and Franklin India Arbitrage Fund Direct Growth Plan at 7.03%, while staying close to Motilal Oswal Arbitrage Fund Direct Growth Plan at 6.94%.
What is the minimum SIP?
The minimum SIP amount is not provided here.
Who manages the fund and what is the exit load?
The fund is managed by Arun Agarwal, Nandita Menezes and Anil Bamboli. The exit load is 0.25% if units are sold on or before 1 month, and nil after that period.
Bottom line
HDFC Arbitrage Fund Direct Growth Plan has shown a steadier medium-term pattern than the benchmark, with 3-year and 5-year returns staying ahead of the index even though the recent 1-year return is only modest. In the peer set, its short-term return sits in the middle of the available figures, while the longer-term data where available remains competitive. The Low Risk profile, large AUM and broad spread across 53 holdings make it more suited to cautious investors who prefer stability and measured compounding over aggressive upside.
Published on 18 September 2026 at 3:58 PM IST
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RIA disclosure
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. This review is prepared by Uniapps Investment Adviser Pvt. Ltd. (earlier known as Uniapps Global Research Pvt. Ltd.) under SEBI Registered Investment Adviser registration INA000017639 for general informational purposes and is not personalized investment advice.