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

Motilal Oswal Arbitrage Fund Direct Growth Plan has a NAV of ₹11.2753 as of 15 Sep 2026 and an AUM of ₹3,486 Cr. Its 1-year, 3-year and 5-year returns are 7%, 0% and 0%, and the scheme sits in the Low Risk category. Our view is that it suits investors who want a low-volatility arbitrage allocation and can accept modest returns when compared with broader equity benchmarks.

The fund’s profile is driven more by stability than by aggressive upside. With a low expense ratio and a portfolio that leans heavily on cash-like and short-duration instruments, it is better read as a conservative parking option than as a growth-led equity substitute.

Quick facts

Particular	Details
NAV	₹11.2753 as of 15 Sep 2026
AUM	₹3,486 Cr
Expense Ratio	0.11%
Launch Date	23 Dec 2024
Min SIP	₹500
Risk Category	Low Risk
Benchmark	Nifty 50
Fund Category	Hybrid
Exit Load	0.25% on or before 15D, Nil after 15D
Fund Managers	Vishal Ashar, Atul Mehra, Rakesh Shetty

The fund is managed by Vishal Ashar, Atul Mehra and Rakesh Shetty.

Source data date: as of 15 Sep 2026

Performance

Period	Fund return	Benchmark return
1M	0.6%	-4.81%
3M	1.6%	-3.63%
1Y	7%	-8.27%
3Y	Data not available	Data not available
5Y	Data not available	Data not available

Near-term performance has been steady rather than exciting. Over 1 month and 3 months, the fund stayed positive while the benchmark was negative, which is consistent with an arbitrage-style strategy that aims to limit volatility rather than chase large market swings.

The 1-year picture is stronger in relative terms, with the fund up 7% while the benchmark is down 8.27%. That gap matters because it shows how the strategy can behave very differently from equity when market conditions are uneven. The month-by-month pattern also suggests a largely flat to gently rising path, with only small changes along the way.

Longer-term figures are not yet available, so we should avoid reading too much into the limited history. Even so, the recent pattern points to a fund that has held up better than the benchmark in the periods shown, while still delivering the kind of restrained movement investors usually expect from arbitrage exposure.

Source data date: as of 15 Sep 2026

Should you BUY or HOLD Motilal Oswal 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
Quant Arbitrage Fund Direct Growth Plan	7.6%	Data not available	Data not available
WOC Arbitrage Fund Direct Growth Plan	7.08%	Data not available	Data not available
Motilal Oswal Arbitrage Fund Direct Growth Plan	7%	Data not available	Data not available
Franklin India Arbitrage Fund Direct Growth Plan	6.99%	Data not available	Data not available
Invesco India Arbitrage Fund Direct Growth Plan	6.85%	7.5%	7.04%
Motilal Oswal Arbitrage Fund Direct Growth Plan	7%	Data not available	Data not available

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

The fund’s 1-year return sits close to the stronger names in this peer set, though Quant Arbitrage Fund is slightly ahead at 7.6% and WOC Arbitrage Fund is also marginally higher at 7.08%. That keeps the fund competitive on recent numbers without making it a standout on that metric alone.

On the longer horizon, only Invesco India Arbitrage Fund has 3-year and 5-year figures available, and those are 7.5% and 7.04%. The current fund does not yet have comparable longer-term numbers, so the peer comparison is much more informative on short-term behaviour than on multi-year consistency. The short-term and longer-term reads therefore tell different stories: the fund looks steady in the recent period, but the longer record is still too short to compare fully.

Source data date: as of 15 Sep 2026

Portfolio: where your money goes

Holding	Sector	Weight
Net Receivables / (Payables)	Cash & Cash Equivalents and Net Assets	73.74%
Motilal Oswal Liquid Fund – Direct Growth	Domestic Mutual Funds Units	6.99%
Triparty Repo	Cash & Cash Equivalents and Net Assets	3.01%
Motilal Oswal Ultra Short Term Fund (Mofustf) -Direct Plan- Growth	Domestic Mutual Funds Units	2.31%
Small Industries Dev Bank of India 2026 ** #	Certificate of Deposit	2.12%
Bank of Baroda 2026 ** #	Certificate of Deposit	1.42%
Canara Bank 2026 ** #	Certificate of Deposit	1.42%
Indian Bank 2026 ** #	Certificate of Deposit	1.41%
364 Days Tbill (MD 17/09/2026)	Treasury Bills	0.72%
5.74% Government of India 2026	Government Securities	0.72%

The largest disclosed holding is Net Receivables / (Payables) at 73.74%, which is unusually large in absolute terms and points to a portfolio dominated by cash-like positioning. The tenth holding is only 0.72%, so the fall-off from the first row to the end of the table is steep.

This shape suggests that a few positions may have much greater influence on the portfolio’s day-to-day profile than the smaller holdings. The top 10 holdings together account for approximately 93.86% of the portfolio, and the disclosed holding list contains 19 rows, so the visible portfolio is fairly concentrated even though it also includes a longer tail of smaller positions.

For investors, that concentration may matter less as a stock-specific risk and more as a sign that the fund is built for short-horizon arbitrage management. The mix of cash equivalents, debt-like instruments and domestic mutual fund units supports a low-volatility stance, but it also helps explain why the fund is not designed to behave like a high-growth equity scheme.

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

Source data date: as of 15 Sep 2026

Who should invest

This fund is suited to investors who are comfortable with low-risk, lower-volatility exposure and want a vehicle that can behave differently from the Nifty 50 in choppy markets. The 1-year result is positive, but the absence of longer track history means the fund should be viewed more as a recent performer with conservative characteristics than as a proven long-cycle compounder.

It fits a short-to-medium holding horizon better than a long-term equity growth expectation. The main trade-off is that the fund may help reduce volatility, but it is unlikely to deliver the kind of upside associated with equity-heavy portfolios.

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 15D, Nil after 15D.

Source data date: as of 15 Sep 2026

Frequently asked questions

What is the current NAV of Motilal Oswal Arbitrage Fund Direct Growth Plan?

The current NAV is ₹11.2753 as of 15 Sep 2026.

What are the fund’s 1-year, 3-year and 5-year returns?

Its 1-year return is 7%, while the 3-year and 5-year returns are not available in the current record.

How has it performed versus the benchmark?

It has held up better than the benchmark in the periods shown. For 1 year, the fund is at 7% while the benchmark is at -8.27%.

How does it compare with peer funds on 1-year return?

Its 1-year return of 7% is close to several peers, including WOC Arbitrage Fund Direct Growth Plan at 7.08% and Quant Arbitrage Fund Direct Growth Plan at 7.6%.

What is the minimum SIP amount?

The minimum SIP amount is ₹500.

What is the risk profile, and what does the portfolio look like?

The fund is in the Low Risk category. Its portfolio is heavily shaped by cash-like and short-duration positions, with Net Receivables / (Payables) at 73.74% and the top 10 disclosed holdings accounting for approximately 93.86% of the portfolio.

Bottom line

Motilal Oswal Arbitrage Fund Direct Growth Plan has shown a steadier short-term path than the Nifty 50 and sits close to peer returns on the 1-year view, but it does not yet have a longer public performance record to lean on. The risk profile is Low Risk, and the portfolio is dominated by cash-like positioning, which supports a conservative use case. Our read is that it fits investors looking for stability and modest return potential rather than equity-style upside.

Published on 16 September 2026 at 9:34 AM 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.