Smart money waiting on the sidelines in Arbitrage funds

Arbitrage funds, holding ₹2.35 lakh crore in assets, have attracted ₹89,400 crore in inflows over the past year as wealthy investors seek short-term parking options. Arbitrage funds returned 7.25% in the last year, outpacing liquid and overnight funds. Tax efficiency and higher returns attract investors despite a recent dip in returns.