'Absolute returns with low volatility': Radhika Gupta on Edelweiss Altiva's new launch - Hybrid Long-Short SIF

Edelweiss Mutual Fund's Altiva has introduced the Hybrid Long-Short Fund, which is India’s first Hybrid Long-Short Specialised Investment Fund (SIF), designed to combine the stability of fixed-income strategies with the growth potential of equities and derivatives. Positioned as a pioneering product in the Indian investment landscape, the fund offers investors “the best of both worlds” by balancing income orientation with flexible opportunity-driven strategies.

At its core, the fund relies on arbitrage and high-quality fixed-income instruments, ensuring steady accrual and a bond-like return profile. To enhance this foundation, it selectively adds exposure to special situations—such as IPOs, buybacks, mergers, and open offers—and employs derivative strategies like straddles, strangles, and covered calls. This layered portfolio construction aims to deliver consistent returns while reducing volatility across varied market conditions.

Radhika Gupta, MD & CEO of Edelweiss Mutual Fund, said the launch marks a milestone in India’s investment landscape. “With the Altiva Hybrid Long-Short Fund, the country’s first Hybrid SIF, we are reaffirming our commitment to building innovative solutions that not only meet evolving investor needs but also enhance portfolio value. The SIF category holds immense promise, and our team’s expertise in equity derivatives and special situations positions us well to unlock this potential.”

Taking to social media platform X, Gupta added: “India’s first hybrid long-short AIF, Altiva SIF by @EdelweissMF, goes live on October 1. This unique strategy is designed to generate absolute returns with low volatility, blending debt, arbitrage, and other low-risk approaches.”

Key features

The fund’s back-tested performance suggests resilience across bull, bear, and flat markets. While it may underperform in sharp bear phases or periods of extreme volatility, its design promises smoother outcomes in the medium term. Investors can expect stable income, supplemented by moderate equity-linked growth, without taking on full market risk.

Another standout feature is its tax efficiency. Classified under the Hybrid Long-Short category, the fund benefits from favorable long-term capital gains treatment—taxed at 12.5% after two years—making post-tax returns competitive compared to Category III AIFs that deploy similar strategies.

“Altiva Hybrid Long Short Fund has been thoughtfully designed to adapt across market cycles - whether flat, bullish, or bearish - aiming to generate stable, income-oriented and tax-efficient returns, with an additional boost from selective opportunities in special situations and derivatives. At Edelweiss AMC, we recognize that investors seek both resilience and growth, and this fund is a strong step forward in delivering that through discipline, diversification, and innovation,” the release said.

Risk management lies at the heart of Altiva’s proposition. The fund employs strict single-stock, sector, and stop-loss limits, alongside delta-hedging techniques, to minimize drawdowns during market-sensitive events. It only participates in main-board IPOs of at least Rs 1,000 crore, and keeps exposures granular to avoid concentration risks.

The strategy is managed by a specialized team of experienced fund managers, including Bharat Lahoti and Bhavesh Jain for equities, Dhawal Dalal and Pranavi Kulkarni for debt, and Amit Vora for overseas allocations.

With a minimum investment of Rs 10 lakh and options for SIPs, STPs, and SWPs, the Altiva Hybrid Long-Short Fund is tailored for investors seeking medium- to long-term returns through a balanced approach to capital appreciation and income generation.

In an environment where markets remain unpredictable and interest rates volatile, Altiva’s innovative product positions itself as an all-weather solution—aimed at offering consistency, risk-managed growth, and a new benchmark for hybrid investing in India.