Introduction: The Others Category in March 2026
In the ever-evolving landscape of mutual funds, the "Others" category within the Debt segment in India has carved a niche for itself as an attractive option for investors seeking diversified exposure with a balanced risk approach. Characterized by funds that often integrate arbitrage strategies with income-generating tools, this category is well-suited for those who aim for steady returns without bearing high volatility. As of March 2026, these funds have showcased varying performances, often influenced by the underlying assets, management decisions, and their adaptive strategies during market turbulence. With a mix of moderate and low-risk funds, understanding the nuanced differences between them is essential for investors aiming to maximize returns while safeguarding against potential downside risks.
#1 Ranked: Kotak Income Plus Arbitrage Omni FoF Direct Growth — The Frontrunner
Kotak Income Plus Arbitrage Omni FoF Direct Growth has emerged as the leader in this category, thanks to its formidable performance and adaptability to market movements. The fund has delivered a commendable one-year rolling return of 7.37%, aligning closely with its reported return of 7.31%, demonstrating consistency in its strategies. This fund stands out due to its minimal drawdowns, with a maximum drawdown of just -0.21% experienced over the last year, recovering swiftly in just 198 days. This resilience is indicative of the fund's adept asset allocation, predominantly featuring safe bets in corporate bonds and managed arbitrage positions. Its low volatility of 0.73% further reassures investors of the fund's stability, ensuring that a ₹1L investment would have experienced only modest price swings, providing peace of mind during periods of uncertainty.
The Challengers: HDFC Income Plus Arbitrage Active FoF vs Bandhan Income Plus Arbitrage Active FoF
HDFC Income Plus Arbitrage Active FoF and Bandhan Income Plus Arbitrage Active FoF present a fascinating competition within the Others category, each offering distinct advantages to their investors. HDFC's fund triumphs with a rolling 5-year return of 12.57%, reflecting its long-term growth capability driven by strategic concentration in corporate bonds and money market instruments. However, it bore a more significant 3-year drawdown of -7.29%, albeit with a complete recovery over 360 days, reflecting its slightly more aggressive stances in certain market conditions.
On the other hand, Bandhan's fund excels with a lower expense ratio of 0.04% and a similarly impressive rolling 1-year return of 7.09%. Notably, Bandhan's fund demonstrates remarkable solidity during turbulent times, with a negligible 1-year drawdown of -0.22%, recovering in just 199 days. Further, its exceptionally low volatility of 0.74% suggests that an investor's portfolio would have remained stable, enduring minor fluctuations. Ultimately, Bandhan offers a slightly more conservative profile favoring those appreciating slow yet steady growth with minimal disturbances.
Under the Radar: Aditya Birla Sun Life Income Plus Arbitrage Active FoF & DSP Income Plus Arbitrage Omni FoF
The underdogs of the pack, Aditya Birla Sun Life Income Plus Arbitrage Active FoF and DSP Income Plus Arbitrage Omni FoF, offer intriguing features that may appeal to niche investors. Aditya Birla's fund floats in the moderate risk zone, exhibiting a distinctive portfolio mix that includes government securities and floating rate bonds. Its balanced approach has yielded a rolling 5-year return of 6.39%, with conservative drawdowns in recent history. Although its volatility of 1.12% signals moderate price variations, the fund remains a solid option for those favoring diversified debt exposure.
Conversely, DSP Income Plus Arbitrage Omni FoF intrigues with its strategic allocations in banking, PSU debt, and arbitrage, resulting in a robust 3-year rolling return of 10.48%. The fund's journey includes enduring a significant 3-year drawdown of -7.02%, recuperating over 854 days. While its narrative features broader swings, with a 1-year volatility of 2.54%, it has the potential for higher reward, catering to those who can tolerate a bit more risk for improved yields.
The Final Verdict
Selecting the right mutual fund from the Others category in March 2026 depends significantly on individual investment priorities. For investors who prioritize capital preservation during market corrections, the Bandhan Income Plus Arbitrage Active FoF is noteworthy with its minimal drawdown of -0.22% and excellent recovery time. However, those who seek maximum long-term CAGR might lean towards HDFC Income Plus Arbitrage Active FoF, given its strong rolling 5-year return of 12.57%, balanced with relatively moderate risk. Ultimately, the defining choice lies in determining one's risk appetite and investment horizon to align with these funds' unique attributes.