Experts advise caution as CAS fuels arbitrage fund NAV volatility

Arbitrage fund net asset values saw a significant daily surge after the NSE introduced a closing auction session. Fund managers noted these movements were valuation effects and likely temporary. The new system introduces execution and hedging challenges for arbitrage strategies. Investors are advised against short-term trading and encouraged to extend holding periods. The market is expected to stabilize as participants adjust to the new mechanism.