NFO alert: 3 new funds launched - Zerodha Overnight Fund, Unifi Dynamic Asset Allocation Fund, Quant Arbitrage Fund; check details

The Zerodha Fund House has introduced the Zerodha Overnight Fund, an open-ended debt scheme that focuses on investing in overnight securities. This fund is designed to meet the rising need for low-risk, short-term investment opportunities and offers investors a variety of options to efficiently manage their liquidity. The subscription for this scheme commenced on March 19, 2025, and will conclude on April 2, 2025.

Overnight mutual funds belong to the category of debt funds and target assets or securities with a residual maturity of just one day.

Vishal Jain, CEO, Zerodha Fund House, said: "By investing in overnight securities, we believe this fund will offer investors a reliable and liquid option for managing their short-term financial needs. The fund aligns with our mission to democratize investing and help investors achieve their financial goals.”

Key features

The Zerodha Overnight Fund caters to investors looking for returns with low risk and high liquidity. 

The fund will primarily invest in debt and money market securities with a maturity of one business day.

Featuring no exit load and NAV-based pricing, the fund allows for easy subscription and redemption, providing flexibility for investors interested in short-term opportunities. 

The Zerodha Overnight Fund will target instruments with low interest rate and credit risk, making it suitable for conservative investors.

The fund is benchmarked against the Nifty 1D Rate Index, which tracks returns from lending in the overnight market.

During the NFO, investors can subscribe with a minimum investment of Rs 100, with subsequent multiples of Rs 1.

Unifi Dynamic Asset Allocation Fund

Unifi Mutual Fund has introduced its inaugural scheme, the Unifi Dynamic Asset Allocation Fund, with the aim of generating returns that outperform inflation throughout economic cycles.

The New Fund Offer (NFO) commenced on March 3, 2025, and concluded on March 7, 2025. The scheme will reopen for subscriptions on March 21, 2025.

Designed for investors seeking stable returns that surpass inflation over a period of two years or more, the fund offers the flexibility to allocate between 0% to 100% across debt and equity segments. This allocation will be adjusted according to market conditions to minimize risks and maintain consistent returns.

Through its strategic approach, the fund will shift between debt and equity based on prevailing economic trends, specifically focusing on four cycles: rising growth-falling inflation, rising growth-rising inflation, falling growth-rising inflation, and falling growth-falling inflation.
Government securities, AAA-rated bonds, hedged equity, and arbitrage strategies will have a stable allocation.
Credit instruments and diversified equity will be included based on growth outlook.

Quant Arbitrage Fund

Quant Mutual Fund has introduced the Quant Arbitrage Fund, a scheme that focuses on investing in arbitrage opportunities. The new fund offer (NFO) for this scheme is currently open for subscription and will conclude on April 1. Following the NFO, the scheme will be available for continuous sale and repurchase within five business days from the unit allotment date.

The primary objective of the scheme is to achieve capital appreciation and income through investments in arbitrage opportunities within the cash and derivative segments of the equity markets. Additionally, the fund will take advantage of arbitrage opportunities within the derivative segment and allocate the remaining assets in debt and money market instruments.

A 0.25% exit load will be charged for redemption or switching within one month from the date of unit allotment. No exit load will be applied if units are redeemed or switched after one month from the allotment date.

The minimum initial investment amount is Rs 5,000, with additional investments accepted in increments of Re 1. For subsequent purchases, the minimum amount required is Rs 1,000, also in increments of Re 1.

Market conditions

During typical market conditions, the arbitrage fund will allocate between 65-100% of its portfolio in equity and equity-related instruments such as derivatives (including index futures, stock futures, index options, and stock options), 0-35% in debt (including securitized debt), and money market instruments, including margin money used in derivative transactions. Additionally, 0-10% will be invested in units issued by REITs and InvITs.

In defensive market scenarios, the allocation strategy will adjust to include 0-65% in equity and equity-related instruments, 35-100% in debt and money market instruments, and remain at 0-10% in units issued by REITs and InvITs.

The scheme will be compared against the Nifty 50 Arbitrage TRI benchmark, and will be managed by Sanjeev Sharma, Sameer Kate, and Yug Tibrewal.

The scheme will be under active management, with the fund manager identifying arbitrage opportunities and executing deals simultaneously in both markets. As per SEBI guidelines, short-selling in the cash market will not be conducted at any time. The debt component of the scheme will be invested in debt securities and money market instruments, with a focus on generating income while minimizing interest rate risk in managing the duration of the debt portfolio.