A New Era of Investing: Hybrid Long-Short Funds under SEBI’s SIF Framework

FinVise India
Sep 13, 2025
3 min read

SBI, Edelweiss Enter SIF Space, Quant Expands with New Hybrid Funds

India’s mutual fund industry is entering a new phase with the launch of hybrid long-short funds under SEBI’s Specialised Investment Fund (SIF) framework. These funds mix equities, debt, and derivatives, and are meant for high-value investors who can invest at least ₹10 lakh.

So far, SBI Mutual Fund and Edelweiss Mutual Fund have made their debut filings, while Quant Mutual Fund is expanding its existing line-up.

What Are Hybrid Long-Short Funds?

These funds aim to give investors:

Growth from equity investments
Stability from debt
Protection & extra income from derivatives (like arbitrage or covered calls)

They are designed for investors who want more advanced strategies than regular mutual funds.

SBI Magnum Hybrid Long-Short Fund

Equity allocation: 65–75%
Debt allocation: 25–35%
Strategy:
- Focus on arbitrage trades (like dividend or merger opportunities).
- Can short up to 25% of portfolio if certain stocks look weak.
- Covered calls to earn from option premiums.
- Debt for safety and liquidity.
- Derivatives to hedge and manage risks.
Benchmark: Nifty 50 Hybrid Composite Debt 50:50 Index TRI.

Edelweiss Altiva Hybrid Long-Short Fund

Equity allocation: 25–75%
Debt allocation: 25–75% (with stronger debt focus)
Strategy:
- Steadier, income-oriented design.
- Uses limited shorts (up to 25%).
- May invest in special situations and arbitrage.
Benchmark: Nifty 50 Hybrid Composite Debt 15:85 Index (reflects more weight toward debt).

Quant QSIF Hybrid Long-Short Fund

Equity allocation: 25–75%
Debt allocation: 25–75%
Other options: Up to 20% in REITs/InvITs
Strategy:
- Flexible and dynamic, shifts with market conditions.
- Can short up to 25% in equity or debt.
- Can hedge 100% of the portfolio with derivatives if required.
Benchmark: Nifty 50 Hybrid Composite Debt 50:50 Index TRI.

What This Means for Investors

These funds are for seasoned, high-net-worth investors (minimum ₹10 lakh entry).
They provide a blend of growth and protection, using advanced tools like shorting and hedging.
SBI leans more toward equities, Edelweiss toward debt, while Quant offers the most flexible model.

In short, this marks the beginning of a new category of sophisticated investment products in India, giving investors more options to manage returns and risks in different market conditions.

Comparison of Hybrid Long-Short Funds under SEBI’s SIF Framework

👉 Key takeaway for investors:

SBI → Best if you want equity-led growth with risk management.
Edelweiss → Suited for investors seeking stable income and lower equity exposure.
Quant → Offers the most flexibility and dynamism, good for those who want active shifts based on market conditions.

Which One Should You Choose?

👉 Simple takeaway:

Pick Edelweiss if you want to protect capital and earn steady returns.
Pick Quant if you want a balanced, flexible strategy that adapts to markets.
Pick SBI if you want to chase higher growth with equity-led strategies (with risk management built in).

🌐 Hybrid Long-Short Funds under SEBI’s SIF Framework

Target Audience: High-net-worth investors (Minimum ₹10 lakh)

🏦 The Players

SBI Mutual Fund → Magnum Hybrid Long-Short Fund
Edelweiss Mutual Fund → Altiva Hybrid Long-Short Fund
Quant Mutual Fund → QSIF Hybrid Long-Short Fund

🎯 Who Should Invest?

Conservative Investors → ✅ Edelweiss Altiva
- More debt, steady income, lower equity risk.
Balanced Investors → ✅ Quant QSIF
- Flexible, adapts to markets, balance of growth & protection.
Aggressive Investors → ✅ SBI Magnum
- Higher equity, growth-driven with risk control via derivatives.

🔑 Key Takeaways

These funds combine equities (growth) + debt (stability) + derivatives (protection/income).
SBI → For growth-seekers.
Edelweiss → For income stability.
Quant → For flexible, tactical allocation.
Minimum investment: ₹10 lakh.