Personal Finance Myth #66

Arbitrage funds are risk-free and guarantee profits | Vrid
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Arbitrage funds are risk-free and guarantee profits

Believing that arbitrage funds are risk-free and guarantee profits is a misconception. 

Arbitrage funds depend on market inefficiencies, which might not always result in arbitrage opportunities. There’s still a level of risk involved, and returns can be modest during certain market conditions. 

The risk level is lower compared to pure equity investments, but it’s not zero. It’s crucial to understand that arbitrage funds, like all investments, come with their own set of risks, and one should carefully assess their risk tolerance and objectives before investing.

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