New Delhi, Aug. 12 -- Zerodha Fund House on Wednesday rolled out the Zerodha Arbitrage Fund, an open-ended equity scheme designed to capitalise on arbitrage opportunities between the cash and derivatives segments.

The New Fund Offer (NFO) features a minimum subscription threshold of Rs.5,000. Target investors include those seeking a low-volatility venue to park surplus funds for relatively brief holding periods compared to conventional equity funds.

Unlike directional equity schemes, an arbitrage fund does not rely on market rallies to generate yields. Instead, it captures temporary price discrepancies for identical securities across the spot and futures markets.

For instance, if a stock trades at a specific price in the spot market wh...