India, June 9 -- justify;">According to AMFI data released in May 2026, the arbitrage mutual funds category received inflows of Rs. 12,378 crores in April. The inflows were higher than those received by individual hybrid and equity schemes in April. The arbitrage funds category has total assets under management (AUM) of Rs. 2.70 lakh crores as on 30th April 2026. In this article, we will understand what arbitrage mutual funds are, how they work, the returns delivered, and their taxation.

In general terms, the word 'arbitrage' means taking advantage of different prices for the same product in two different places. For example, when buying clothes or personal accessories, we often compare prices between two different offline shops or betwe...