Mahindra Manulife Arbitrage Fund - Direct Plan - IDCW

Mahindra Manulife Arbitrage Fund - Direct Plan - IDCW lags behind most of its peers in the Arbitrage Fund category, currently carrying a 2-star rating. Returns have been soft relative to what the category has offered — worth checking if this is a temporary phase or a longer pattern. TopFund's composite Health Score, which weighs rating, 3-year CAGR, expense ratio and fund size, puts it at 48/100.

Cost: At 0.18%, the expense ratio is meaningfully cheaper — about 55% below the Arbitrage Fund category average of 0.4% (based on 61 comparable funds). Lower costs compound in your favour over long holding periods.

Risk-adjusted performance: Over the trailing 1-year period, the fund shows a negative Sharpe ratio of -1.09 — over the past year, returns haven't kept pace with the volatility involved, even before accounting for the risk-free rate. Separately, annualised volatility of 4.59% is on the lower side, suggesting a comparatively smoother ride.

Who should invest: This fund is best suited to investors whose goals and risk appetite align with a Hybrid fund.