NFO Alert: Bandhan Mutual Fund launches Arudha SIF’s maiden strategy with Hybrid Long-Short Fund

Arudha SIF, by Bandhan Mutual Fund, announced the launch of its maiden SIF strategy, - Arudha Hybrid Long-Short Fund, an interval investment strategy aimed to deliver optimal returns with a focus on risk management and post-tax efficiency.

The new fund offer or NFO of this SIF will open for subscription on January 9 and will close on January 22.

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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.

“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. Arudha Hybrid Long-Short Fund seeks to provide investors with access to accrual income, opportunities in selected highly rated instruments, and equity arbitrage spreads through a single, well-structured strategy, combines predominantly high-quality debt investments with fully hedged market-neutral equity positions,” said Vishal Kapoor, CEO, Bandhan AMC.

As per the strategy document it can allocate 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 maintain 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.

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Further the units of the strategy shall be listed after allotment on NSE and BSE for ease of investments.

This SIF strategy is suitable for investors who are seeking to generate short to medium term optimal returns and want an interval investment strategy investing predominantly in equity and debt securities, including limited short exposure in equity and debt through derivatives.

The fund house has named its SIF brand as Arudha Specialized Investment Funds (SIF). The name Arudha reflects ascent and progress, according to a press release by the fund house.