JioBlackRock Mutual Fund has submitted draft documents to the Securities and Exchange Board of India (SEBI) for the launch of a new hybrid long-short fund. Operating under its Prism Specialised Investment Fund (SIF) platform, the proposed Prism Hybrid Long-Short Fund is designed to offer a diversified investment approach that combines exposure to equities, debt instruments, and derivative strategies.
Fund Structure and Allocation Strategy
According to the draft filing, the fund will strategically allocate its portfolio, with 35% to 75% directed towards equities and equity-related instruments. A significant portion, 25% to 65%, will be invested in debt and money market instruments. Furthermore, the fund has the flexibility to take up to 25% exposure through unhedged derivative positions and allocate up to 20% to Infrastructure Investment Trusts (InvITs).
The fund's strategy also incorporates advanced approaches such as merger arbitrage opportunities and options-based techniques like collar strategies. These are intended to enhance potential returns while simultaneously managing downside risks in varying market conditions.
Investment Details and Management
The Prism Hybrid Long-Short Fund will follow an interval investment structure, aiming to generate long-term capital appreciation alongside regular income. It will be benchmarked against the NIFTY 50 Hybrid Composite Debt 50:50 Index (TRI).
Subscriptions to the fund will be permitted daily at the applicable net asset value (NAV). Redemptions, however, will be allowed twice a week, specifically on Mondays and Wednesdays, or at a frequency determined by the asset management company. The minimum initial investment required under the SIF framework is ₹10 lakh, positioning the product for high-value investors. Subsequent investments will have a lower minimum threshold of ₹10,000.
The fund will be managed by a team comprising Arun Ramachandran, Tanvi Kacheria, Siddharth Deb, and Virendra Kumar.
Risk Profile and Investment Philosophy
JioBlackRock states that its Prism SIF platform operates on a “risk-first, data-driven” investment philosophy. This approach is designed to adapt dynamically to market shifts, aiming for more stable outcomes compared to traditional long-only investment strategies. The fund carries a moderate risk profile, acknowledging that the principal investment is subject to market fluctuations.
By integrating both long and short strategies with a diversified asset allocation across multiple asset classes and selective derivative use for hedging, the fund seeks to provide investors with a balanced return profile across various market environments.