Union Mutual Fund launches Arthaya SIF with equity long-short strategy

Union Mutual Fund on April 30 announced the launch of an investment strategy under its Arthaya Specialised Investment Fund (SIF), marking its entry into the Securities and Exchange Board of India’s (SEBI) newly introduced SIF framework.

The first offering under the platform, the Arthaya Equity Long Short Fund, is structured to follow a long-short equity approach that combines long positions in equities with selective short positions through derivatives. The fund aims to generate returns across market cycles while also actively managing downside risk.

The New Fund Offer (NFO) will open for subscription on May 4 and close on May 18.

The fund house said the Arthaya SIF platform is intended to bridge the gap between traditional long-only equity funds and alternative investment strategies, offering a more flexible investment framework within a regulated structure.

Union Asset Management Company (AMC) Chief Executive Officer Madhu Nair said the strategy is designed to allow portfolios to adjust to changing market conditions rather than only participate in market upswings. He said the approach focuses on dynamic exposure management in an environment where returns tend to be uneven.

According to Rajesh Aynor, SIF Investment Lead at Union AMC, the strategy will focus on identifying valuation gaps between price and underlying fundamentals. He said the long positions will target companies with earnings visibility, while the short positions will be taken in structurally weaker or overvalued businesses.

The fund is structured under SEBI’s SIF framework and aims to provide access to a more complex equity strategy without the higher entry requirements typically associated with alternative investment products.