A New Era of Investing: Hybrid Long-Short Funds under SEBI’s SIF Framework


India’s mutual fund industry is entering a new phase with the launch of hybrid long-short funds under SEBI’s Specialised Investment Fund (SIF) framework. These funds mix equities, debt, and derivatives, and are meant for high-value investors who can invest at least ₹10 lakh.

So far, SBI Mutual Fund and Edelweiss Mutual Fund have made their debut filings, while Quant Mutual Fund is expanding its existing line-up.

What Are Hybrid Long-Short Funds?

These funds aim to give investors:

  • Growth from equity investments
  • Stability from debt
  • Protection & extra income from derivatives (like arbitrage or covered calls)

They are designed for investors who want more advanced strategies than regular mutual funds.

SBI Magnum Hybrid Long-Short Fund

  • Equity allocation: 65–75%
  • Debt allocation: 25–35%
  • Strategy:
    • Focus on arbitrage trades (like dividend or merger opportunities).
    • Can short up to 25% of portfolio if certain stocks look weak.
    • Covered calls to earn from option premiums.
    • Debt for safety and liquidity.
    • Derivatives to hedge and manage risks.
  • Benchmark: Nifty 50 Hybrid Composite Debt 50:50 Index TRI.

Edelweiss Altiva Hybrid Long-Short Fund

  • Equity allocation: 25–75%
  • Debt allocation: 25–75% (with stronger debt focus)
  • Strategy:
    • Steadier, income-oriented design.
    • Uses limited shorts (up to 25%).
    • May invest in special situations and arbitrage.
  • Benchmark: Nifty 50 Hybrid Composite Debt 15:85 Index (reflects more weight toward debt).

Quant QSIF Hybrid Long-Short Fund

  • Equity allocation: 25–75%
  • Debt allocation: 25–75%
  • Other options: Up to 20% in REITs/InvITs
  • Strategy:
    • Flexible and dynamic, shifts with market conditions.
    • Can short up to 25% in equity or debt.
    • Can hedge 100% of the portfolio with derivatives if required.
  • Benchmark: Nifty 50 Hybrid Composite Debt 50:50 Index TRI.

What This Means for Investors

  • These funds are for seasoned, high-net-worth investors (minimum ₹10 lakh entry).
  • They provide a blend of growth and protection, using advanced tools like shorting and hedging.
  • SBI leans more toward equities, Edelweiss toward debt, while Quant offers the most flexible model.

In short, this marks the beginning of a new category of sophisticated investment products in India, giving investors more options to manage returns and risks in different market conditions.

Comparison of Hybrid Long-Short Funds under SEBI’s SIF Framework

FeatureSBI Magnum Hybrid Long-Short FundEdelweiss Altiva Hybrid Long-Short FundQuant QSIF Hybrid Long-Short Fund
Equity Allocation65–75%25–75% (moderate equity)25–75% (flexible)
Debt Allocation25–35%25–75% (higher debt focus)25–75%
Other AssetsNoneNoneUp to 20% in REITs & InvITs
Short PositionsUp to 25% (mainly equities)Up to 25% (limited, moderate use)Up to 25% (in equity or debt)
Derivatives UseArbitrage, covered calls, hedging entire portfolioArbitrage, special situations, limited shortsFlexible – hedging up to 100% of portfolio
Strategy FocusGrowth through equities + hedging for risk controlIncome stability with moderate equityDynamic allocation, adaptable to markets
BenchmarkNifty 50 Hybrid Composite Debt 50:50 Index TRINifty 50 Hybrid Composite Debt 15:85 Index TRINifty 50 Hybrid Composite Debt 50:50 Index TRI
Investor TypeGrowth-oriented HNIsIncome-seeking HNIsBalanced & tactical investors
Minimum Investment₹10 lakh₹10 lakh₹10 lakh

👉 Key takeaway for investors:

  • SBI → Best if you want equity-led growth with risk management.
  • Edelweiss → Suited for investors seeking stable income and lower equity exposure.
  • Quant → Offers the most flexibility and dynamism, good for those who want active shifts based on market conditions.

Which One Should You Choose?

Risk ProfileBest Fit FundWhy?
Conservative Investor (prefers stability, steady income, lower volatility)Edelweiss Altiva Hybrid Long-Short FundStronger tilt toward debt, lower reliance on equities, steady income focus with limited use of derivatives.
Balanced Investor (wants mix of growth + stability, moderate risk)Quant QSIF Hybrid Long-Short FundFlexible and dynamic — can shift between equity, debt, REITs/InvITs depending on market conditions. Offers balance of growth and protection.
Aggressive Investor (comfortable with volatility, aiming for higher growth)SBI Magnum Hybrid Long-Short FundHigher equity allocation (65–75%), uses active strategies like arbitrage, covered calls, and selective shorting for enhanced returns.

👉 Simple takeaway:

  • Pick Edelweiss if you want to protect capital and earn steady returns.
  • Pick Quant if you want a balanced, flexible strategy that adapts to markets.
  • Pick SBI if you want to chase higher growth with equity-led strategies (with risk management built in).

🌐 Hybrid Long-Short Funds under SEBI’s SIF Framework

Target Audience: High-net-worth investors (Minimum ₹10 lakh)

🏦 The Players

  • SBI Mutual Fund → Magnum Hybrid Long-Short Fund
  • Edelweiss Mutual Fund → Altiva Hybrid Long-Short Fund
  • Quant Mutual Fund → QSIF Hybrid Long-Short Fund

📊 Quick Comparison

Fund HouseEquity AllocationDebt AllocationShort PositionsStrategy StyleBenchmark
SBI65–75%25–35%Up to 25%Growth-focused, arbitrage, covered calls, hedgingNifty 50 Hybrid Composite Debt 50:50 TRI
Edelweiss25–75%25–75% (debt-heavy)Up to 25%Income stability, special situations, limited shortsNifty 50 Hybrid Composite Debt 15:85 TRI
Quant25–75%25–75%Up to 25% (equity & debt)Dynamic, flexible, can hedge 100%Nifty 50 Hybrid Composite Debt 50:50 TRI

🎯 Who Should Invest?

  • Conservative Investors → ✅ Edelweiss Altiva
    • More debt, steady income, lower equity risk.
  • Balanced Investors → ✅ Quant qsif
    • Flexible, adapts to markets, balance of growth & protection.
  • Aggressive Investors → ✅ SBI Magnum
    • Higher equity, growth-driven with risk control via derivatives.

🔑 Key Takeaways

  • These funds combine equities (growth) + debt (stability) + derivatives (protection/income).
  • SBI → For growth-seekers.
  • Edelweiss → For income stability.
  • Quant → For flexible, tactical allocation.
  • Minimum investment: ₹10 lakh.

📌 Hybrid long-short funds mark the next phase of sophisticated investing in India, giving HNIs more tools to balance risk and reward.

Location: India

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