Bangalore: HDFC Asset Management Company Limited (HDFC AMC), Investment Manager to HDFC Mutual Fund (HDFC MF), one of India’s leading mutual fund houses, has announced the launch of HDFC Income Plus Arbitrage Omni FOF (the “Scheme”), an open-ended Fund of Fund scheme designed to provide investors exposure to arbitrage schemes and active / passive debt-oriented schemes. The New Fund Offer (NFO) opens on February 27, 2026 and closes on March 11, 2026.
HDFC Income Plus Arbitrage Omni FOF will dynamically manage its allocation by adjusting portfolio duration and credit exposure based on factors such as the interest rate outlook, RBI monetary policy, yield curve dynamics, liquidity conditions and arbitrage spreads between the cash and futures markets. The Scheme will aim to maintain the exposure to units of debt-oriented mutual fund schemes, debt securities and money market instruments below 65%. At least 35% of the portfolio will be allocated to arbitrage schemes. By virtue of this allocation strategy, the Scheme will be tax-efficient*. In addition to this, the FOF structure seeks to provide investors the benefit of active asset allocation without triggering taxation on switching between underlying schemes.
Commenting on the launch, Mr. Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Company Limited, said, “In today’s fixed income environment, investors are increasingly seeking solutions that combine income potential and prudent risk management. With HDFC Income Plus Arbitrage Omni FOF, we endeavour to provide a solution that will allow investors to dynamically allocate across arbitrage schemes and active and passive debt-oriented schemes, with the objective of building yield potential while aiming to manage volatility. Anchored in our rigorous credit evaluation process and execution discipline, this product seeks to provide a differentiated approach to accrual investing.”
This Scheme will be managed by Mr. Bhavyesh Divecha and Mr. Praveen Jain. Commenting on the launch, Praveen mentioned, “Currently, while growth remains healthy, we remain cautiously optimistic on the yields in view of benign inflation outlook, ample system durable liquidity in FY27 and expectation of low policy rates to continue in the foreseeable future. Furthermore, in our view, most negative sentiments look to be largely priced into the current yield levels, thereby providing scope for yields to drift lower hereon. Considering RBI is close to end of rate cut cycle, accrual assets appear to be well- placed, with the spreads of non-AAA corporate bonds sitting at a higher level versus AAA corporate bonds, and higher than its long-term averages. This could create room for spread compression, along with possible easing of yields over the medium term. Hence, investors could explore investing in HDFC Income Plus Arbitrage Omni FOF – an easy and convenient way to allocate across units of arbitrage schemes and active and passive debt-
