HDFC Mutual Fund has entered the specialised investment fund (SIF) segment with a hybrid long-short strategy that combines investments in debt and equity securities with derivatives and limited short positions. The move comes as assets in the relatively new investment category have grown, with fund houses exploring investment strategies beyond conventional equity and debt mutual funds.
The fund house’s first offering under its H-SIF platform, the H-SIF Hybrid Long-Short Fund, opened for subscription on November 13. The new fund offer (NFO) will close on November 27, 2026. The minimum investment is ₹10 lakh across SIF strategies at the Permanent Account Number (PAN) level. Accredited investors can invest a minimum of ₹10,000, subject to applicable conditions.
The category’s assets under management increased from approximately ₹2,010 crore in October 2025 to ₹38,287 crore in September 2026, according to figures cited by HDFC Mutual Fund from the Association of Mutual Funds in India (AMFI). Hybrid long-short strategies accounted for the largest share of SIF assets, the fund house said.
How HDFC Mutual Fund’s hybrid long-short SIF will invest
The H-SIF Hybrid Long-Short Fund will invest in equity and debt securities, with its core portfolio comprising relatively high-safety debt papers, arbitrage positions and investments in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).
Alongside this portfolio, the fund will use derivatives for hedging, earning option premiums and taking short positions of up to 25% of its net assets. It may also participate selectively in corporate events such as initial public offerings (IPOs), share buybacks, open offers and mergers.
The strategy aims to generate returns through multiple sources, including interest income, arbitrage spreads, option premiums and opportunities arising from corporate events. This differs from conventional equity mutual funds, where returns are more directly linked to the performance of underlying stocks.
The fund house has designed the strategy for flat, mildly rising and volatile markets, with a preferred investment horizon of more than 18 months.
Paul S Parampreet, fund manager for equities at HDFC Asset Management Company, said the strategy would use derivatives to manage portfolio risks and seek opportunities during periods of elevated volatility. The fund will be managed by Parampreet and Ihab Dalwai for equities, Anil Bamboli for debt and Gopal Agrawal for overseas investments.
Minimum investment, exit load and redemption rules explained
The minimum investment requirement is ₹10 lakh in aggregate across SIF strategies at the PAN level. Accredited investors can invest a minimum of ₹10,000, subject to applicable conditions.
Investors can subscribe to the strategy daily, but redemptions will be available only twice a week, on Mondays and Wednesdays. An exit load of 0.5% will apply to units redeemed or switched out within 90 days of allotment. There will be no exit load thereafter.
The investment horizon and redemption conditions are important considerations for investors, particularly those who may need frequent access to their money. The preferred holding period of more than 18 months also means investors should assess whether the investment fits their financial goals and liquidity requirements.
What investors should know about SIFs and their risks
Specialised investment funds offer asset managers greater flexibility to deploy investment strategies, including long-short positions and derivatives, within the applicable regulatory framework. They occupy a segment between conventional mutual funds and more specialised investment products.
However, this flexibility also introduces risks that investors may not encounter in the same way in traditional mutual fund schemes. Short positions can result in losses when security prices move against the fund’s expectations. Derivative strategies also carry market and liquidity risks.
In the case of H-SIF Hybrid Long-Short Fund, short exposure can extend to 25% of net assets. Investors should understand how these positions, along with debt and arbitrage investments, could affect the portfolio during different market conditions.
HDFC Mutual Fund has cautioned that investments in SIFs involve relatively higher risks, including potential loss of capital, liquidity risk and market volatility. The strategy’s objective of generating returns through multiple sources does not guarantee positive returns or protect the invested capital.
Investors should read the investment strategy information document carefully and assess the portfolio structure, derivative exposure, redemption conditions and associated risks before subscribing to the NFO.