SIF in focus: ICICI Pru MF floats iSIF Equity Ex-Top 100 Long-Short Fund, iSIF Hybrid Long-Short Fund

ICICI Prudential Mutual Fund has expanded its alternative strategies platform with the launch of two new offerings under its Specialised Investment Funds (SIF) segment — the iSIF Equity Ex-Top 100 Long-Short Fund and the iSIF Hybrid Long-Short Fund. The new fund offers (NFOs) for both strategies opened on January 16 and will remain available for subscription until January 30, 2026.

The two launches mark a significant step in the evolution of India’s asset management landscape, as SIFs are designed to bridge the gap between traditional mutual funds and more complex portfolio management services (PMS) and alternative investment funds (AIFs). Introduced by SEBI, the SIF framework allows investors with a minimum commitment of Rs 10 lakh per PAN to access advanced investment strategies in a regulated and transparent structure.

Both new funds adopt long-short approaches aimed at navigating volatile and uneven market conditions. These strategies seek to generate risk-adjusted returns with lower volatility through a combination of active derivatives usage, dynamic asset allocation and bottom-up stock selection.

Explaining the rationale behind the launches, Sankaran Naren, Executive Director and CIO at ICICI Prudential AMC, said the iSIF segment is meant to offer differentiated solutions that can adapt to evolving market cycles. He added that long-short strategies provide fund managers with greater flexibility to manage risk while pursuing consistent outcomes across different phases of the market.

iSIF Equity Ex-Top 100 Long-Short Fund

The iSIF Equity Ex-Top 100 Long-Short Fund focuses on opportunities beyond India’s large-cap universe. It invests in equity and equity-related instruments of companies outside the top 100 by market capitalisation, as defined by AMFI. The strategy takes long positions in fundamentally strong mid- and small-cap stocks while selectively shorting stocks that appear overvalued, using derivatives to moderate volatility. By blending growth-oriented exposure with tactical hedging, the fund aims to capture upside potential while reducing downside risk. The benchmark for the strategy is the Nifty 500 Total Return Index.

iSIF Hybrid Long-Short Fund

The second offering, the iSIF Hybrid Long-Short Fund, follows a more diversified approach. Structured as an interval strategy, it invests across equities, debt securities and derivatives, including limited short exposure in both equity and debt instruments. The fund dynamically adjusts its net equity exposure based on market valuations, trends and internal models, seeking to deliver smoother outcomes regardless of broader market direction. In addition to long-short equity positions, it plans to tap special situations such as IPOs, qualified institutional placements, buybacks and tactical opportunities in fixed income. Its performance will be measured against the CRISIL Hybrid 50+50 Moderate Index.

Both strategies rely on multiple alpha-generation levers. These include active stock and sector selection, derivative-based income strategies such as covered calls, carry-based debt investments in corporate bonds and money market instruments, and participation in capital market opportunities like block deals and buybacks.

How does a long-short fund work

A long-short fund is an investment strategy that takes both long positions in stocks expected to rise and short positions in stocks expected to fall. Unlike traditional long-only funds, it aims to generate returns in both rising and falling markets. Fund managers identify undervalued companies to buy and overvalued ones to sell short, seeking to profit from relative performance differences.

Proceeds from short sales are often reinvested in long positions, introducing controlled leverage. A common example is the 130/30 strategy, where 130% of assets are in long positions and 30% in shorts, maintaining full market exposure while enhancing alpha potential.

With these launches, ICICI Prudential Mutual Fund is positioning its iSIF platform as a middle ground for sophisticated investors seeking more than conventional mutual fund strategies but not ready to move into the less regulated territory of PMS or AIFs. As market volatility and dispersion across stocks continue to rise, such flexible, strategy-driven products are likely to attract growing interest from investors looking for diversified sources of return with a sharper focus on risk management.