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The Economic Times

Investment / The Economic Times

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Explained: How will STT hike impact arbitrage and hybrid mutual fund returns?

The STT hike on futures and options is set to marginally reduce returns for arbitrage and hybrid mutual funds, as higher transaction costs increase rollover and churn expenses. AMCs estimate an annualised impact of 0.030.33% depending on derivatives exposure, with arbitrage-heavy schemes facing the biggest compression in yields.

2 Feb 2026 2:19 pm