Long-Short SIFs
An equity fund built with brakes. It won’t top the charts in a strong bull run — the hedges cost some upside — but it is designed to fall far less when markets drop.
What it actually is
Specified Investment Funds — SEBI’s newest category, live since 2025 — that can go long the stocks they like and short the ones they don’t. The aim is equity-like returns with much smaller falls: hedge-fund technique, mutual-fund tax and rules, ₹10 L entry.
The job it does
- Staying in equity without full drawdown exposure
- A smoother ride for a first move beyond mutual funds
- Returns less dependent on markets only rising
Why people use it
- Downside management is built into the mandate, not left to timing
- MF-style tax and disclosure — far kinder than Cat III fund-level tax
- ₹10 L entry vs ₹1 Cr for a comparable AIF strategy
What can go wrong
- Hedging costs drag returns in strong bull runs
- Short track records — the category is young
- Manager skill matters far more than in index-hugging funds
Does Long-Short SIFs belong in your architecture?
Seven questions narrow thirteen structures to a shortlist.
Market Neutral Funds
Debt++, Equity Engine
Cat II AIFPrivate Credit & Real Estate Debt
High-Yield Cashflow
Content on this site is for education only and is not investment advice or an offer to sell any product. Past performance does not guarantee future results. Please consult your Chartered Accountant and read all scheme documents before investing.