Mahindra Manulife Mutual Fund announces launch of ‘Mahindra Manulife Income Plus Arbitrage Active FOF’

MUMBAI:

 Mahindra Manulife Mutual Fund, a joint venture between Mahindra & Mahindra Financial Services Limited (‘Mahindra Finance’)and Manulife Investment Management (Singapore) Pte. Ltd has announced the launch of an open-ended fund of fund scheme, Mahindra Manulife Income Plus Arbitrage Active FOF, a product for investors seeking relatively stable and  better post tax returns over a holding period of more than 24 months, as per extant income tax laws. The New Fund Offer (NFO) opens on November 21, 2025, and closes on December 1, 2025.

The scheme aims to generate long-term capital appreciation by investing in a mix of actively managed debt schemes and arbitrage schemes, offering flexibility to navigate changing market conditions. This blend seeks to help investors manage reinvestment risks in fixed income and benefit of arbitrage spread in volatile market with tax efficiency for holding periods beyond 24 months.

Anthony Heredia, MD & CEO, Mahindra Manulife Investment Management Pvt. Ltd., said, “Income Plus Arbitrage Active FoF has been designed as an all-season proposition that brings together the strengths of debt and arbitrage strategies. In a market where spreads, interest rate cycles, and reinvestment risks often create uncertainty, this product offers a disciplined approach aimed at better post-tax outcomes.”

The strategy is positioned to help investors manage key challenges in today’s market—reinvestment risk in fixed income, fluctuating arbitrage spreads, and higher slab-based taxation on traditional debt instruments. The structure of the FoF aims to deliver relatively steadier outcomes along with long-term capital gains tax at 12.5% for holding periods beyond 24 months*.

Rahul Pal, CIO – Fixed Income, Mahindra Manulife Investment Management Pvt. Ltd said, “From a fixed income standpoint, the Income Plus Arbitrage Active FoF gives us the ability to balance interest rate dynamics, credit spreads and market liquidity within one solution. The debt portion will be managed through active duration positioning and a disciplined credit framework, while the arbitrage allocation helps smoothen volatility during periods of rate uncertainty. This combination allows us to respond to evolving macro conditions and aims to deliver a relatively steadier experience for investors over a medium-term horizon.”

The scheme will be managed by Amit Garg,  Rahul Pal, and Mitul Doshi. It will follow Mahindra Manulife’s investment process, combining active duration management, credit evaluation, and tactical allocation to arbitrage opportunities.