The latest NFO from HDFC Mutual Fund — HDFC Income Plus Arbitrage Omni FOF — aims to generate yield potential with relatively lower volatility.
But is this fund suitable for your portfolio? Let’s break it down in simple terms.
NFO Details
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NFO Period: 27th February to 11th March 2026
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Category: Hybrid / Fund of Fund
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Structure: Open-ended
(Always verify latest details from official scheme documents.)
What is HDFC Income Plus Arbitrage Omni FOF?
This is an open-ended Fund of Fund (FOF) scheme that invests in:
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Domestic Arbitrage Schemes
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Active Debt-oriented Schemes
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Passive Debt-oriented Schemes
Instead of directly investing in stocks or bonds, this fund invests in other mutual fund schemes.
Objective:
To generate income and capital appreciation over the long term while attempting to manage volatility.
What Does “Arbitrage + Debt” Strategy Mean?
🔹 Arbitrage Component
Arbitrage funds aim to capture price differences between cash and futures markets.
These typically behave like low-volatility equity products.
🔹 Debt Component
Debt funds invest in fixed-income securities such as:
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Government bonds
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Corporate bonds
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Money market instruments
This combination attempts to provide:
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Stability (via debt)
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Tax-efficient returns (via arbitrage structure)
Who Should Consider This NFO?
This fund may be suitable for:
✔ Investors seeking relatively lower volatility
✔ Those looking for income-oriented hybrid exposure
✔ Investors wanting arbitrage + debt allocation in one product
✔ Portfolio diversifiers
It may not be suitable for:
✖ Aggressive long-term equity investors
✖ Investors expecting high-growth equity-style returns
Risk Level
As per the riskometer provided in the scheme material, the scheme is categorized under higher risk category.
Investors must understand that even arbitrage and debt-based strategies are subject to:
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Interest rate risk
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Credit risk
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Market risk
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Liquidity risk
Potential Benefits
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Diversified allocation approach
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Professional fund management
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Arbitrage taxation advantage (if structured accordingly)
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May suit conservative allocation strategies
Things to Evaluate Before Investing
Before investing in any NFO, ask:
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Does this fit your asset allocation strategy?
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Do you already hold similar hybrid funds?
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What is your time horizon?
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What is the taxation impact?
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Are you investing for income or growth?
Remember: An NFO is not automatically better than existing funds.
Final Thoughts
The HDFC Income Plus Arbitrage Omni FOF aims to balance income generation with controlled volatility. However, suitability depends on your financial goals, risk appetite, and overall portfolio allocation.
NFOs can be attractive due to fresh positioning, but disciplined asset allocation matters more than launch excitement.
Disclaimer
Mutual Fund investments are subject to market risks. Read all scheme related documents carefully.
This article is for educational purposes only and should not be considered investment advice. Please consult your financial advisor before making any investment decisions.