<b>Street sign:</b> Arbitrage gains on CPSE ETF

Index inclusion hopes for ICICI Prudential Life; Sebi may soon get a new member

The five-per cent discount on the second tranche of the Central Public Sector Enterprises’ Exchange-Traded Fund (CPSE ETF)  has been used by smart investors to pocket arbitrage gains, according to market players. Three different arbitrage strategies were used by investors — existing investors of the CPSE ETF sold their units and applied in the further fund offer (FFO); some investors shorted the CPSE ETF index futures and applied in the FFO; the more savvy investors sold the underlying 10 shares of the ETF and applied in the FFO. Given that the ETF was subscribed only around two times, the arbitrage