Edelweiss MF’s new SIF opens for subscription: What investors should know

The open-ended equity long-short strategy will predominantly invest in listed equity and equity-related instruments. The minimum application amount is ₹10 lakh.

According to the fund house, the strategy will have an indicative long-term allocation of around 80% to large-cap stocks and 20% to select mid- and small-cap stocks. The portfolio will use a benchmark-oriented approach against the Nifty 100 TRI, along with derivative strategies aimed at generating additional returns.

The derivatives strategy may include covered calls, straddles and strangles, among other permitted strategies. The fund house said the derivatives overlay does not assure or provide regular income, and its contribution will depend on market conditions.

The scheme can also take limited short exposure through unhedged equity derivatives, capped at 25%, according to the fund’s disclaimer.

The equity portfolio will be managed by Bharat Lahoti and Bhavesh Jain, while Amit Vora will be the overseas fund manager.

The fund offers daily subscriptions and redemptions under Direct and Regular plans, with Growth and IDCW options. An exit load of 0.50% will apply if units are redeemed or switched out on or before 90 days from allotment. There will be no exit load after 90 days.

Edelweiss MF said its existing Altiva SIF investors who have already met the applicable ₹10 lakh minimum investment requirement can invest an additional ₹1,000 and in multiples of ₹1 thereafter, subject to the final offer documents.

The fund house said its first two Altiva SIF strategies had assets under management of more than ₹11,000 crore as of September 3. The Altiva Hybrid Long Short Fund had an AUM of about ₹9,754 crore, while the Altiva Equity Ex Top 100 Long Short Fund had an AUM of about ₹1,436 crore.

SIFs are a relatively new investment category and carry higher risks than conventional mutual fund schemes, including the possibility of capital loss, liquidity risk and market volatility. The fund house has also stated that there is no assurance that the investment objective of the new strategy will be achieved.