Hi Vimit,
I'm Rachana from Fintastic Wealth. This is an interesting query. Index funds basically replicate the performance of a certain market index like Nifty 50, but Arbitrage funds aim at drawing profits from minor price differentials between two types of markets(Cash or spot market and futures market) for a particular asset.
Arbitrage funds are relatively low risk compared to equity mutual funds, but are not as liquid as index funds
In case you want to know more about mutual funds or insurance, let's connect!
