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Looking for low-risk returns? SBI's new fund mixes debt and arbitrage

SBI Mutual Fund, India's largest asset management company, on Tuesday launched a new hybrid investment vehicle — the SBI Income Plus Arbitrage Active Fund of Fund (FOF). The New Fund Offer (NFO) opens on April 23, 2025, and closes on April 30, 2025. This open-ended scheme offers investors a blend of actively managed debt schemes and arbitrage mutual fund schemes, aiming to provide regular income with capital appreciation — all with a layer of tax efficiency. However, there is no assurance or guarantee that the investment objective of the Scheme would be achieved. The objective of the SBI Income Plus Arbitrage Active FOF is to deliver stable, tax-efficient returns by dynamically allocating funds between: Actively managed debt-oriented mutual fund schemes (50–65% of portfolio) Actively managed arbitrage mutual fund schemes (35–50% of portfolio) Cash or money market instruments (up to 5%) Benchmark: 65% Nifty Composite Debt Index + 35% Nifty 50 Arbitrage Index Structure: Fund of Fund – invests in existing SBI Mutual Fund schemes or those of other AMCs Also Read "In today's market environment, stability and tax-efficiency matter. The SBI Income Plus Arbitrage Fund of Fund aims to allocate investments between debt-oriented and arbitrage mutual fund schemes, depending on market conditions, to provide a combination of stability from debt and market-neutral returns from arbitrage. The scheme offers a suitable tax efficient option for conservative investors, HNIs, corporates managing treasuries, and anyone looking for optimal post-tax returns over a 2–3-year horizon," said D P Singh, Deputy MD & Joint CEO, SBI Funds Management Limited. The scheme would primarily invest between 35% and 50% of its assets in Units of actively managed Arbitrage Mutual Fund schemes, invest a minimum of 50% and a maximum of 65% of its assets in Units of actively managed debt-oriented schemes, and up to 5% in Money market instruments, Triparty Repo, reverse Repo, cash and cash equivalents. The minimum application amount required is of Rs. 5,000 and in multiples of Re. 1 thereafter with additional investment of Rs. 1,000 and in multiples of Re. 1 thereafter. Investments can also be done through daily, weekly, monthly, quarterly, semi-annual, and annual SIP (Systematic Investment Plan). The fund manager for the SBI Income Plus Arbitrage Active Fund of Funds is Ardhendu Bhattacharya, who has been with the fund house since April 2019. He currently manages the debt portion of several funds, including the SBI Retirement Benefit Fund - Aggressive Plan, SBI Retirement Benefit Fund - Aggressive Hybrid Plan, SBI Retirement Benefit Fund - Conservative Hybrid Plan, SBI Retirement Benefit Fund - Conservative Plan, SBI Floating Rate Debt Fund, and SBI Arbitrage Opportunities Fund. Additionally, he is the co-Fund Manager of the SBI Corporate Bond Fund, SBI Banking & PSU Fund, SBI Magnum Ultra Short Duration Fund, and SBI-ETF 10 Year Gilt. Who should consider this fund? This fund may be a suitable fit for: Conservative investors seeking stable returns High-net-worth individuals (HNIs) looking for tax-advantaged income Corporate treasuries managing cash with a balanced risk appetite Investors with a 2–3 year investment horizon Investment Details