The Altiva Hybrid Long-Short Fund has reported a strong performance, achieving a 13.62% annualized return in the six months ending July 31, 2026. This figure notably outshines its benchmark, the NIFTY 50 Hybrid Composite Debt 50:50 Index, which recorded a -0.74% annualized return during the same period.
Since its inception on October 20, 2025, the fund's Direct-Growth plan has generated a 12.89% annualized return, compared to the benchmark's -1.84%. The Regular-Growth plan also showed solid results, with a 12.59% annualized return over six months and 11.81% since inception, according to Edelweiss Mutual Fund's July portfolio update.
A Diversified Investment Strategy
Altiva's success stems from a sophisticated strategy designed to perform independently of market direction. The fund integrates equity and debt investments with various techniques, including arbitrage, derivatives, and special situations. Its primary objective is capital appreciation through equity and related instruments, complemented by income generation from arbitrage, derivatives strategies, special situations, and fixed-income investments.
As of July 31, the fund's portfolio allocation included nearly 39.49% in fixed income, approximately 38% in cash-future arbitrage and covered-call strategies, about 9% in other derivative strategies, and around 5% in REITs and InvITs.
Fund managers emphasized their focus on high-quality fixed-income instruments, which led to an improved blended yield-to-maturity of approximately 8% and a reduced portfolio duration of about 1.5 years. Covered-call exposure increased as arbitrage spreads became less attractive.
Resilience in Volatile Markets
The fund's defensive characteristics were evident during the March market sell-off. While the Nifty 50 experienced an 11.31% decline, the Altiva fund fell by only 1.53%. Since its launch, the fund has maintained a reported volatility of around 3.4%, significantly lower than the Nifty 50's 14.3%, and has delivered positive returns on over two-thirds of trading days.
Understanding Hybrid Long-Short SIFs
The Altiva Hybrid Long-Short Fund operates within the Specialized Investment Fund (SIF) category, a relatively new framework offering greater investment flexibility within the mutual fund structure. SIFs combine a robust regulatory framework and tax efficiency with more sophisticated investment strategies than conventional mutual funds.
This structure allows for market-neutral and long-short techniques typically associated with alternative investment funds (AIFs), but with a lower minimum investment. Altiva's SIF strategies require a minimum investment of ₹10 lakh, positioning them between traditional mutual funds (₹100 minimum) and AIFs (₹1 crore minimum) or Portfolio Management Services (PMS) (₹50 lakh minimum).
SIFs also permit limited short exposure through unhedged derivatives, up to 25%, without allowing leverage. This contrasts with Category III AIFs, which can use leverage with gross exposure up to 200%. Altiva's Hybrid Long-Short strategy aims to blend income-oriented core exposures with selective derivative and special situation opportunities, providing investors with a unique path to returns while managing portfolio volatility.