Kotak Arbitrage Fund Direct Growth Review 2026: NAV, Returns, Portfolio & Should You Invest?

Kotak Arbitrage Fund Direct Growth Plan currently has a NAV of ₹43.2183 as of 09 Sep 2026 and manages ₹74,398 Cr. Its 1-year, 3-year and 5-year returns are 6.75%, 7.5% and 6.91%, respectively, and the scheme is tagged as Low Risk. In our view, this is better suited to conservative investors who want a steadier return profile than an equity-style swing, while still accepting that arbitrage returns can move modestly around the benchmark.

The fund has stayed ahead of the benchmark across the longer periods shown, but the recent 1-year figure is only modestly above the benchmark’s weaker 1-year reading. That makes it more appropriate for investors who prioritise controlled volatility and a relatively predictable pattern over chasing aggressive upside.

Quick facts

Particular	Details
NAV	₹43.2183 as of 09 Sep 2026
AUM	₹74,398 Cr
Expense Ratio	0.44%
Launch Date	01 Jan 2013
Min SIP	₹100
Risk Category	Low Risk
Benchmark	Nifty 50
Fund Category	Hybrid
Exit Load	0.25% on or before 30D, Nil after 30D
Fund Managers	Hiten Shah

The fund is managed by Hiten Shah.

Source data date: as of 09 Sep 2026

Performance

Period	Fund return	Benchmark return
1M	0.44%	-4.69%
3M	1.6%	0.93%
1Y	6.75%	-7.16%
3Y	7.5%	6%
5Y	6.91%	5.87%

The short-term picture is stable rather than flashy. The 1-month and 3-month figures show small gains, which fits an arbitrage strategy that usually aims to limit turbulence rather than deliver sharp bursts of performance.

Over 1 year, the fund has held up well while the benchmark has been negative. That contrast matters because it suggests the scheme has behaved very differently from a plain equity reference point, with less exposure to the kind of drawdown that can hurt a broader market benchmark.

The longer view is still important. The 3-year and 5-year returns are both in the mid-to-high 6% range, which is higher than the benchmark on the same horizons. Our view is that the fund’s pattern looks consistent with a low-volatility cash-plus style outcome rather than a market-led equity return path.

What stands out is the relative steadiness across periods. The return curve does not show dramatic jumps, but it also avoids the kind of large setback seen in the benchmark’s 1-year figure. For investors who want return consistency over momentum, that difference may matter more than headline upside.

Source data date: as of 09 Sep 2026

Should you BUY or HOLD Kotak 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.

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Peer comparison

Fund	1Y return	3Y return	5Y return
Kotak Arbitrage Fund Direct Growth Plan	6.75%	7.5%	6.91%
Quant Arbitrage Fund Direct Growth Plan	7.62%	Data not available	Data not available
WOC Arbitrage Fund Direct Growth Plan	7.16%	Data not available	Data not available
Franklin India Arbitrage Fund Direct Growth Plan	6.91%	Data not available	Data not available
Motilal Oswal Arbitrage Fund Direct Growth Plan	6.86%	Data not available	Data not available
Tata Arbitrage Fund Direct Growth Plan	6.77%	7.51%	6.8%

This assessment is prepared by Uniapps Investment Adviser Pvt. Ltd. under SEBI Registered Investment Adviser registration INA000017639.

On the latest 1-year figure, the fund trails Quant Arbitrage Fund Direct Growth Plan and WOC Arbitrage Fund Direct Growth Plan, but it stays close to Franklin India Arbitrage Fund Direct Growth Plan, Motilal Oswal Arbitrage Fund Direct Growth Plan and Tata Arbitrage Fund Direct Growth Plan. That makes the short-term picture fairly compressed among the available peer set.

The longer-term comparison is mixed but still constructive. Tata Arbitrage Fund Direct Growth Plan shows slightly higher 3-year return, while Kotak Arbitrage Fund Direct Growth Plan is ahead of Tata on the 5-year figure. Because several peers do not have longer-period figures available here, the longer-horizon comparison is more limited than the 1-year view.

Overall, the peer set suggests that this fund is competitive on the longer horizon and broadly in line with the middle of the available return range on the recent horizon. The short-term and longer-term views do not tell exactly the same story, which is common for arbitrage strategies where consistency often matters more than a single-period lead.

Source data date: as of 09 Sep 2026

Portfolio: where your money goes

Holding	Sector	Weight
Kotak Money Market Fund Direct Growth	Domestic Mutual Funds Units	9.79%
Kotak Savings Fund Direct Growth	Domestic Mutual Funds Units	4.59%
Kotak Liquid Direct Growth	Domestic Mutual Funds Units	4.49%
Kotak Low Duration Fund Direct Growth	Domestic Mutual Funds Units	2.81%
Axis Bank Ltd.	Bank	2.73%
HDFC Bank Ltd.	Certificate of Deposit	2.47%
Reliance Industries Ltd.	Crude Oil	2.15%
HDFC Bank Ltd.	Bank	2.08%
Kotak Mahindra Bank Ltd.	Bank	2.05%
Hindalco Industries Ltd.	Non – Ferrous Metals	1.81%

The largest holding is Kotak Money Market Fund Direct Growth at 9.79%, which is meaningful but not outsized for a portfolio built around arbitrage and short-duration exposures. The tenth holding is still 1.81%, so the weight drops gradually rather than collapsing sharply after the top position.

The displayed holdings account for approximately 34.97% of the portfolio, and the fund has 58 disclosed holding rows in total. That suggests the top positions matter, but they do not dominate the full structure on their own. In our view, the rest of the portfolio likely provides an extended tail of exposures that may help prevent any single line item from driving the outcome.

Because several of the largest positions are mutual fund units and liquid debt-like instruments, the portfolio may behave more as a layered arbitrage structure than as a simple concentrated equity book. The mixture of bank, crude oil and metals exposure among the top holdings also shows that the scheme is not built around one narrow theme.

To see all holdings, visit the Kotak Arbitrage Fund Direct Growth Plan page

Source data date: as of 09 Sep 2026

Who should invest

This fund fits investors with a conservative temperament who can accept modest return variation in exchange for lower volatility. The Low Risk tag and the steady return pattern across 1 year, 3 years and 5 years make it better suited to people who value stability over market-linked upside.

The main trade-off is that the fund’s returns are relatively restrained, especially when compared with equity-style expectations, even though it has stayed ahead of the benchmark over the longer horizons shown. It may appeal most to investors who want a parking-style allocation with some return generation and who are comfortable with a shorter-to-medium holding horizon rather than a pursuit of aggressive growth.

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: 0.25% on or before 30 days; no exit load after 30 days.

Source data date: as of 09 Sep 2026

Frequently asked questions

What is the current NAV of Kotak Arbitrage Fund Direct Growth Plan?
The current NAV is ₹43.2183 as of 09 Sep 2026.

What are the fund’s 1-year, 3-year and 5-year returns?
The fund’s returns are 6.75% for 1 year, 7.5% for 3 years and 6.91% for 5 years.

How has the fund performed against its benchmark?
It has been ahead of the benchmark across the 1-year, 3-year and 5-year periods shown. The benchmark’s 1-year figure is negative, while the fund stayed positive.

How does it compare with other arbitrage funds on the available numbers?
It is close to several peers on the 1-year figure, behind some and ahead of others by small margins. On longer horizons, the available peer data shows a mixed picture, with Tata Arbitrage Fund Direct Growth Plan slightly ahead on 3 years and Kotak ahead on 5 years.

Does the fund have a minimum SIP requirement?
No minimum SIP amount is stated here.

What are the main risk and exit-load features?
The fund is tagged as Low Risk. The exit load is 0.25% on or before 30 days and nil after 30 days, while the fund is managed by Hiten Shah.

Bottom line

Kotak Arbitrage Fund Direct Growth Plan has a steady return pattern that is more subdued than an equity fund but more stable than the benchmark’s recent behaviour. Its longer-term returns remain ahead of the benchmark, while the peer comparison shows a competitive profile without a dramatic lead. The Low Risk tag, the diversified set of holdings and the strong presence of short-term, cash-like instruments point to a fund built for control rather than excitement. It is a better fit for conservative investors who want consistency and can accept moderate returns.

Published on 10 September 2026 at 3:29 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.