Arudha SIF, by Bandhan Mutual Fund, has announced the launch of its maiden SIF strategy, – Arudha Hybrid Long-Short Fund, an interval investment strategy aims to deliver optimal returns with a focus on risk management and post-tax efficiency. The strategy intends to allocate up to 65% in short to medium term debt and money market instruments while maintaining a minimum 35% allocation to fully hedged, market-neutral equity positions. Commenting on the launch, Vishal Kapoor, CEO, Bandhan AMC Limited, said, “Arudha Hybrid Long-Short Fund has been designed for sophisticated investors such as HNIs, institutional investors, family offices, etc., looking for optimal returns with optimal tax efficiency that can be achieved through the uniquely structured SIF.” As per the strategy document it can allocates minimum 35% and maximum 65% in debt & money market instruments and equity instruments and can take short unhedged derivatives exposure up to 25%.
The debt exposure of the strategy will be in instruments with active duration management in the range of one to four years. Exposure can be taken in select AA+/AA rated instruments and capped at 10% of the overall portfolio, with the remaining portion invested in AAA-rated or sovereign securities. This debt allocation aims to provide relative stability, liquidity, and intends accrual income. On the equity side, the strategy aims to maintains a minimum allocation of 35% to fully hedged equity positions. The equity strategy is market-neutral in nature and focuses on capturing opportunities arising from pricing inefficiencies and spreads, rather than taking directional market exposure. This arbitrage allocation is designed to add relatively low-risk accruals to the overall portfolio.