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Arbitrage schemes see uptick in flows as short-term investors play safe


While election-related uncertainty is behind markets, analysts say there could be another bout of volatility

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Arbitrage schemes saw sharp uptick in flows in May as a spate of downgrades and payment delays by certain borrowers dented sentiments on shorter-duration schemes, which take credit risks in their portfolios. “Typically, arbitrage schemes have lower exposure to credit papers and also tend to do well during volatile periods due to wider cash-futures spreads available,” said Kaustubh Belapurkar, director (fund research), Morningstar Investment ...


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