Bandhan AMC launches Arudha Equity Long Short Fund under SIF framework; NFO opens on March 5

Bandhan Mutual Fund’s specialized division, Arudha SIF, has announced the launch of the Arudha Equity Long-Short Fund, an open-ended strategy introduced under the Securities and Exchange Board of India’s (SEBI) Specialised Investment Funds (SIF) framework. The offering marks Bandhan AMC’s entry into a new regulatory category designed to bridge the gap between traditional mutual funds and portfolio management services (PMS) or alternative investment funds (AIFs). The New Fund Offer (NFO) will open on March 5, 2026, and close on March 18, 2026. Units will be offered at a face value of Rs 10 during the NFO period. For volatile markets The Arudha Equity Long-Short Fund seeks to generate long-term capital appreciation by deploying a dynamic long-short equity strategy. At a time when equity markets are witnessing sectoral churn, leadership shifts and heightened volatility, the fund aims to offer investors a structured way to participate in growth while mitigating downside risks. Unlike conventional “long-only” equity funds that primarily benefit from rising markets, the new strategy incorporates selective short exposure through derivatives. This allows the portfolio to potentially benefit from falling stock prices in addition to capturing upside from high-conviction long positions. According to the scheme’s strategy framework, the fund will allocate 80% to 100% of its portfolio to listed equity and equity-related instruments. It is permitted to take short unhedged derivative exposure of up to 25%, enabling the fund manager to express negative views on overvalued or structurally weak stocks. The strategy is benchmarked against the NIFTY 500 Total Return Index (TRI), which represents approximately 93% of India’s listed market capitalisation. Return engines The investment framework is structured around four distinct “return engines,” each designed to play a specific role in portfolio construction: Long Equity (80–100%): The primary growth engine, focused on high-conviction stocks with visible earnings growth and strong fundamentals. Short Equity (up to 25% unhedged): A protection and alpha-generation layer aimed at hedging market risks and monetising overvaluation or deteriorating fundamentals. Debt (0–20%): A stability component investing in high-quality, accrual-based fixed income instruments. Covered Calls: An income-enhancement strategy intended to generate yield and moderate volatility through options overlay. This multi-layered approach is designed to expand the opportunity set across market cycles, offering the potential to generate returns in both bullish and bearish environments. Risk-return positioning Bandhan AMC has positioned the fund as a solution for investors seeking equity-like returns with lower volatility. Back-tested data over a 10-year period, as presented in the strategy document, indicates a compounded annual growth rate (CAGR) of 14.1% with annualised volatility of 8.0%. The strategy reportedly outperformed standard Aggressive Hybrid and Balanced Advantage categories in both return and stability metrics during the back-tested period. However, as an SIF product, the fund carries relatively higher risk compared to traditional mutual fund schemes. Risks include market volatility, derivative exposure, liquidity constraints and potential capital loss. Who should invest in this NFO The Arudha Equity Long-Short Fund is tailored for High Net-Worth Individuals (HNIs) and sophisticated investors comfortable with advanced strategies. Under SEBI’s SIF regulations, the minimum investment threshold is ₹10 lakh at a PAN level across all Arudha SIF strategies. For “Accredited Investors” meeting specified net-worth or income criteria, the minimum investment requirement is reduced to ₹1 lakh. Commenting on the launch, Vishal Kapoor, CEO of Bandhan AMC Limited, said, “Equity investing has traditionally involved a trade-off between pursuing higher returns and accepting higher volatility. Investors today are increasingly seeking approaches that participate in growth while managing risk in a more structured manner. Our long-short framework enables portfolios to capture opportunities regardless of market direction.” Bandhan AMC currently services over 3.5 million folios across more than 800 locations. Investors can subscribe to the Arudha Equity Long-Short Fund through licensed distributors, investment advisors or directly via the Arudha SIF digital platform during the NFO window. With this launch, Bandhan AMC joins the early movers in India’s emerging SIF space, signalling a broader shift toward more sophisticated, risk-managed portfolio solutions within the regulated mutual fund ecosystem.