The Principal Mutual Funds is a subsidiary of the Principal Financial Group, which is one amongst the leading investment managers in the world. However, it is officially managed by the Principal Pnb Asset Management Company. This mutual fund company offers profitable investment options to both retail and institutional investors across India. The Principal Arbitrage Fund-Direct Plan – Monthly Dividend is one among the open-ended schemes offered by the Principal Mutual Fund. It majorly invests in the arbitrage opportunities in the cash and derivative segment to fulfill its investment goal.
The direct plan of this scheme enables the investors to conduct the investment process without the involvement of any intermediary like broker/agent/distributor, etc. thus allowing one to save on the distributor expenses. The expense ratio of the direct plan is slightly lower than the regular plan. The monthly dividend option helps the unitholders get steady income at regular intervals along with long-term capital appreciation after the completion of the investment tenure.
Investment Objective of Principal Arbitrage Fund
The sole motto of this fund scheme is to generate capital appreciation as well as consistent income for the unitholders by chiefly investing in arbitrage opportunities in the derivative and cash segment of the equity market. Apart from the equity derivatives, this fund also invests a small portion of its portfolio assets in debt and money market instruments.
Key Features of Principal Arbitrage Fund
The Principal Arbitrage Fund is perfect for investors who want to earn money through their mutual fund investment in arbitrage opportunities in the equity market while also slowly building wealth over a long investment tenure. The scheme comes with the features that are lined down below:
Type of Fund It is an open-ended scheme which invests in the arbitrage opportunities in derivatives and cash segment Plans Available Regular Plan and Direct Plan Options under each Plan
- Growth Option
- Dividend Option
Risk Moderately Low Systematic Investment Plan Available Systematic Transfer Plan Available Systematic Withdrawal Plan Available
Investment Amount for Principal Arbitrage Fund
Minimum Application Amount Rs.5,000 per application and in multiples of Re.1 thereafter Minimum Additional Investment Rs.500 or 50 units or account balance whichever is less Minimum instalment for Systematic Investment Plan (SIP) Rs.500 (minimum 12 instalments) and in multiples of Re.1 thereafter Minimum instalment for Regular Withdrawal Plan (SWP) Rs.500 and in multiples of Rs.1 thereafter (minimum 6 instalments) Entry Load Not Applicable Exit Load 0.50% - If the units are redeemed or switched out before the completion of a holding period of 30 days from the allotment date of the units, the unitholders will be charged this exit load. Nil – If the units are redeemed or switched out after the completion of a holding period of 30 days from the allotment date of the units, the unitholders will not be charged exit load.
Asset Allocation for Principal Arbitrage Fund
Instruments Indicative Allocation Percentage of total assets Risk Profile Minimum Maximum Equity and its related securities 65% 90% Medium to High Equity derivatives 65% 90% Medium to High Money market and debt securities including margin for derivatives 10% 35% Low
NAV Disclosure and Benchmark for Principal Arbitrage Fund
NAV: The Net Asset Value or NAV of the Principal Arbitrage Fund is calculated by dividing the net assets by the number of units that are pending on the valuation date. The NAV is calculated up to 4 decimal places to get the final amount. The calculated NAV will be disclosed on the official website of the fund house (www.principalindia.com) as well as the website of AMFI (www.amfiindia.com) by the end of every working day by 9:00 p.m. It will also be sent for publication on a daily basis in 2 leading newspapers which are distributed nationwide.
Liquidity: The Principal Arbitrage Fund being an open-ended mutual fund scheme allows the unitholders to sell and redeem the units on every business day at the pertinent NAV rates. Ideally, the redemption proceeds will be paid to the unitholders within 10 days of official acceptance of the redemption request by the fund house.
Benchmark: The benchmark index of the Principal Arbitrage Fund is CRISIL Liquid Fund Index. Based on the outcomes of this index, the profits and gains of this particular fund are assessed.
Principal Arbitrage Fund - Fund Manager
Mr. Rajat Jain having more than 28 years of experience in portfolio management is the fund manager of the Principal Arbitrage Fund. He has been managing it successfully for the last 2 years. Mr. Jain is also the Chief Investment Manager of Principal Pnb Asset Management Co. Pvt. Ltd. Before joining Principal Group he has worked with SBI Mutual Fund. Apart from this scheme, he also handles the Principal Asset Allocation Fund of Funds, the Principal Global Opportunities Fund, and the Principal Nifty 100 Equal Weight Fund.
Why should you invest in the Principal Arbitrage Fund - Direct Plan – Monthly Dividend?
The Principal Arbitrage Fund - Direct Plan – Monthly Dividend is a good option for investors for the following reasons:
High returns: The Principal Arbitrage Fund invests in arbitrage opportunities within the growth-oriented equity segment to generate attractive returns for the unitholders. The monthly dividend scheme of this fund allows investors to get constant income.
Low-risk investment: This scheme is good for investors having a low-risk appetite. If you don’t want to take high risk while investing in mutual funds but still want to get the best returns investing in this fund is a good option.
Regular income: The best thing about this scheme is that it enables you to get a steady income by means of regular dividend payouts. If you are in need of regular payment then subscribing to this scheme will be a profitable deal for you.
Direct investment: You can invest in this fund online without the involvement of any intermediary like brokers, agents, or distributors. Hence, you can save a good amount of money on the distributor fees. Moreover, the expense ratio of this fund is also less.
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