The Altiva Hybrid Long-Short Fund is strategically leaning into fixed income and shorter-duration instruments to navigate current market volatility. As of September 30, 2026, a significant 40.99% of its portfolio was allocated to fixed income, reflecting a defensive stance.
This income-oriented strategy forms the core of the fund's approach, complemented by cash-future arbitrage and covered calls. The fund's debt portfolio boasts an 8.17% yield to maturity (YTM) and a modified duration of 1.35 years, emphasizing a shorter-duration profile for enhanced flexibility in changing market conditions.
Shorter Duration for Market Flexibility
Maintaining a shorter duration within its fixed-income holdings is a key aspect of Altiva's strategy. This approach minimizes sensitivity to fluctuations in bond yields, crucial during periods of market uncertainty. The fund actively manages surplus cash through instruments like Treasury Bills (T-Bills) and TREPS, ensuring liquidity while seeking opportunistic investments across various asset classes.
As of September 30, the average maturity of the fund's debt portfolio stood at 1.53 years, with a Macaulay duration of 1.46 years. This focus on high-quality, shorter-duration debt instruments underlines the fund's commitment to stability and tactical responsiveness.
Key Fixed-Income Holdings
Within its substantial fixed-income allocation, T-Bills represent the largest single exposure at 13.66%. The portfolio also includes holdings in highly-rated corporate and public sector entities, ensuring credit quality. Noteworthy allocations include:
- T-Bills (SOV): 13.66%
- Bajaj Finance (AAA): 4.07%
- NABARD (AAA): 3.25%
- SIDBI (AAA): 3.13%
- REC (AAA): 2.45%
- Mahindra & Mahindra Financial Services (AAA): 1.86%
- Tata Capital Housing Finance (AAA): 1.57%
Positioning Amidst Equity Market Volatility
The fund's defensive positioning proved timely, particularly in September when equity markets experienced a notable correction. While the Nifty 50 declined by 6.06% during the month, the Altiva Hybrid Long-Short Fund's Direct plan saw a more contained fall of 0.72%.
This performance highlights the effectiveness of its diversified strategy, which combines fixed income with arbitrage, covered calls, other derivatives, and special situations. The fund aims to reduce reliance on the directional movement of equity markets, focusing instead on generating income and identifying opportunities across different market phases. For investors, this blend of substantial fixed income, shorter duration, and high-quality debt remains central to how Altiva Hybrid Long-Short Fund aims to navigate and mitigate risks in dynamic market environments.