Two new SIFs target different equity opportunities: Large market vs Ex-Top 100 stocks

Aditya Birla Sun Life Asset Management Company has launched two Specialised Investment Funds (SIFs) with equity long-short strategies, offering investors exposure to different parts of the equity market while giving fund managers flexibility to adjust net equity exposure based on market conditions.

The Apex Equity Long-Short Fund and Apex Equity Ex-Top 100 Long-Short Fund are open for subscription from August 10 to August 24. Both schemes require a minimum investment of ₹10 lakh at the PAN level, subject to applicable minimum investment guidelines.

Apex Equity Long-Short Fund: Broad market approach

The Apex Equity Long-Short Fund will invest across the equity market and will be benchmarked against the NIFTY 500 TRI. Its key feature is the ability to dynamically change its net equity exposure depending on the market environment.

Unlike a conventional long-only equity fund, the strategy can take long positions in stocks where the fund manager sees potential for gains, while using short positions or reducing exposure where downside risks are identified.

This approach is designed to provide greater flexibility across market cycles. The fund manager can potentially participate in rising markets while managing overall equity exposure when market conditions turn unfavourable.

Apex Equity Ex-Top 100: Focus on next 400 companies

The second scheme, Apex Equity Ex-Top 100 Long-Short Fund, has a more focused investment universe. It will target companies ranked 101 to 500 by market capitalisation, giving investors exposure to companies outside India's top 100 listed firms.

According to Aditya Birla Sun Life AMC, companies ranked 101-250 and 251-500 by market capitalisation recorded market-cap growth of 2.76 times and three times, respectively, over the past five years. This compared with 1.8 times for the top 100 companies.

The fund house also pointed to the historical performance of the broader mid- and small-cap segments. Over the period cited, the Nifty Midcap 150 TRI and Nifty Smallcap 250 TRI delivered compound annual growth rates of 15.2% and 12%, respectively, compared with 11.5% for the Nifty 100 TRI. These historical figures, however, do not indicate future returns.

How do the two SIFs differ?

The long-short structure gives these SIFs greater flexibility than traditional long-only equity funds, but it also introduces additional risks. Short positions, leverage and more complex portfolio management can increase the risk profile of such strategies. The ability to reduce net equity exposure should not be interpreted as a guarantee of downside protection.

The two funds therefore offer distinctly different investment propositions. The first provides a broader equity-market approach, while the second specifically targets companies outside the top 100 by market capitalisation.

Aditya Birla Sun Life AMC expects earnings growth and stock selection to remain important drivers of equity returns in the second half of 2026. The fund house also said domestic liquidity remains supportive and foreign investor participation has started to improve.