SBI Mutual Fund has entered the Specialised Investment Fund (SIF) space with the launch of its Magnum Hybrid Long Short Fund, a multi-asset strategy designed to provide investors with stable, risk-adjusted returns while navigating volatile markets. This marks the fund house’s first offering under the new SIF framework introduced by the Securities and Exchange Board of India (SEBI).
The new fund adopts a hybrid long-short strategy, investing across equities, debt, derivatives, and real estate/ infrastructure investment trusts (REITs and InvITs). According to the asset manager, the structure allows for greater flexibility across market cycles while keeping volatility in check.
DP Singh, Deputy MD & Joint CEO at SBI Mutual Fund, expressed optimism about the opportunity. Speaking at the launch event, Singh said, “If I put a number three years down the line, this Hybrid Long Short Fund will be bigger than other similar hybrid offerings, provided the tax laws and other conditions remain stable.”
He added that the fund is well-suited for retirees as well as first-time equity investors. “Even limited exposure to equities can hit hard during downturns. Here, with derivatives like covered calls, that risk is significantly reduced, making it an attractive FD-plus option for conservative savers,” Singh noted.
Fund features
The New Fund Offer (NFO) will open for subscription from October 1 to 15, 2025. While investments can be made daily, redemptions will be available twice a week—on Mondays and Thursdays.
The minimum application size has been set at ₹10 lakh, with additional investments allowed in multiples of Rs 10,000. Investors can opt for lump-sum or systematic investment plans (SIPs).
The fund will allocate 65–75% of its assets to equities, with net exposure largely hedged using derivatives. Unhedged short positions will be capped at 25%. Debt and money market instruments will account for 25–35%, while up to 10% may be invested in REITs and InvITs.
The fund aims to generate returns through derivative strategies such as covered calls and arbitrage, while maintaining a low net equity exposure of 0–10% to minimize downside risks. Its benchmark is the NIFTY 50 Hybrid Composite Debt 50:50 Index TRI.
The scheme will be managed by Gaurav Mehta, CFA, Head – SIF, Equity, who has been with SBI Funds Management since 2018.
Tax treatment and cost efficiency
Under the SIF framework, long-term capital gains (LTCG) on units held for more than 12 months are taxed at 12.5% plus surcharge and cess, with an exemption limit of Rs 1.25 lakh per financial year. This taxation makes SIFs potentially more attractive than traditional hybrid funds for certain investors.
The asset manager also emphasized cost efficiency, targeting an expense ratio of around 10% of expected yields, ensuring investors retain more of their returns.
Peer activity and industry landscape
SBI MF’s entry comes amid a flurry of launches in the SIF category. Quant Mutual Fund was the first to introduce an SIF in September 2025 with its QSIF Equity Long-Short Fund. Edelweiss Mutual Fund is set to debut its hybrid long-short SIF in October, while Tata Mutual Fund has already filed draft documents with the regulator.
The SIF framework allows fund houses to create strategies across equity, debt, and hybrid asset classes. Within equity, SEBI has permitted three approaches Equity Long-Short, Equity ex-Top 100 Long-Short, and Sector Rotation Long-Short each with prescribed minimum exposures and derivative limits.
Unlike traditional open-ended mutual funds, which allow redemptions on any business day at prevailing NAV, SIFs may come with restricted redemption windows. For instance, hybrid long-short funds may permit redemptions only twice a week, while debt long-short strategies often allow weekly exits. This makes liquidity a key differentiator for investors considering the category.
Market positioning
With assets under management (AUM) of Rs 11.9 lakh crore as of August 2025, SBI Mutual Fund is India’s largest asset manager. The launch of its first SIF underscores its strategy to broaden its product suite and tap into investors seeking stability with moderate growth in a tax-efficient structure.
By combining equity, debt, and derivatives, the Magnum Hybrid Long Short Fund aims to deliver “FD-plus” returns with low volatility, appealing to conservative investors wary of market swings but seeking better outcomes than traditional fixed deposits.