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30 Apr 2026
Union Mutual Fund has announced its entry into equity long-short investing with the launch of its Specialized Investment Fund (SIF) platform, Arthaya SIF. The platform’s first offering, Arthaya Equity Long Short Fund, will open for subscription from May 4 to May 18, 2026.
Union MF said the Arthaya SIF platform seeks to bridge this divide by offering a flexible, risk-aware approach within a regulated structure, making sophisticated strategies more accessible. “Investor portfolios today are caught between two extremes, traditional long-only funds that aim to ride market beta, and alternative strategies that remain out of reach for many,” said CEO Madhu Nair. He added that with the Equity Long Short strategy, they are introducing a framework that allows portfolios to respond to markets, not just participate in them.
On the SIF opportunity, Nair said the structure offers a significant advantage over existing alternatives. “Long-short strategies have always existed in AIF and PMS formats, but taxation has been a key drag. Here, the mutual fund structure brings far greater tax efficiency, which can materially improve investor outcomes,” he said.
The investment strategy follows a “three-pillar” construct combining liquidity, core equity exposure, and opportunistic positioning. Within equities and related instruments, the indicative allocation allows 65% to 100% in cash equities, 0% to 35% in derivative equities, and up to 25% in non-hedging short positions, with hedging shorts potentially covering up to 100% of cash equity exposure. This structure enables the fund to actively manage risk while maintaining participation in equity markets.
The portfolio stance is designed to shift dynamically across market conditions. In bullish phases, net equity exposure can rise to around 70%–95% to capture upside, while in bearish environments it may be reduced to as low as 0%–40% to limit downside risk. In flat or range-bound markets, exposure typically ranges between 25% and 75%, balancing return generation with capital preservation.
The core of this strategy lies in identifying dislocations where price diverges from underlying fundamentals and building long and short exposures around that insight, according to Rajesh Aynor, SIF Investment Lead at Union AMC.
“The long portfolio focuses on businesses with earnings visibility, while the short portfolio targets structurally weaker companies or mispriced opportunities. This dual engine allows us to aim for structured, risk-adjusted outcomes across market cycles,” he added.
Nair added that the AMC has invested significantly in building specialised capabilities for this strategy. “This is not a traditional equity extension as shorting requires a very different skill set and mindset. We have built a dedicated investment capability rather than taking shortcuts,” he noted.
Union MF has also focused on building distribution readiness for the new category, given its relatively higher complexity compared to traditional mutual funds. Nair said the fund house has conducted over 40 training sessions, reaching more than 1,200 participants across banks, firms and independent financial advisors, and contributing to nearly 800–900 certifications in the SIF segment. He noted that industry-wide around 6,000 professionals have already cleared the required certification industry-wide, and the AMC aims to expand this base further to improve reach and ensure the product is appropriately positioned among investors.
While it is currently focused on equity strategy, the AMC will look to expand into other categories such as hybrid and ex-top 100 offerings over time.
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