NFO Alert: Bandhan Mutual Fund Launches Arudha Hybrid Long Short Fund

Bandhan Mutual Fund has introduced its first specialised investment fund (SIF), Arudha Hybrid Long Short Fund, which blends high-quality debt instruments with market-neutral equity positions.  

The strategy is designed for high-net-worth individuals (HNIs), institutional investors, and family offices seeking post-tax efficiency and risk-managed accrual income. 

Arudha SIF's First Strategy Focuses on Hybrid Balance 

The Arudha Hybrid Long Short Fund will operate as an interval scheme, opening for subscription between January 9 and January 22.  

The strategy proposes an allocation of up to 65% in short-to-medium-term debt and money market instruments. It combines this with a minimum 35% allocation in fully hedged, market-neutral equity positions.  

This approach seeks to capture income through accrual from debt and equity arbitrage spreads without directional exposure to market volatility. 

Debt Allocation and Duration Management 

The fund structure allows a debt and money market exposure between 35% and 65%. Within this allocation, a portion of the investment will be directed towards AA+ and AA-rated instruments, with a cap of 10% on such instruments across the portfolio.  

The rest will target AAA-rated or sovereign securities. The debt component will be actively managed within a maturity bracket of 1 to 4 years to maintain optimal liquidity and income accrual consistency. 

Equity Strategy and Arbitrage Exposure 

The equity portion will redirect a minimum of 35% capital into fully hedged strategies, utilising pricing inefficiencies for arbitrage rather than market direction trends.  

The strategy may include an unhedged derivatives exposure of up to 25%, adding flexibility in implementing the long-short approach. This combination seeks to enhance returns while keeping volatility in check. 

Read More: Upcoming NFO: 360 ONE Mutual Fund Files Draft for DynaSIF Equity Long-Short Fund with SEBI! 

Listing and Investor Access 

After the allotment, units will be listed on both NSE and BSE to enhance liquidity and ease of access for investors.  

The Arudha SIF brand reflects the theme of ‘ascent and progress’ and intends to serve sophisticated investors looking for structured investment opportunities combining debt stability and equity hedging within a single framework. 

Conclusion 

Bandhan Mutual Fund’s launch of the Arudha Hybrid Long Short Fund under SIF provides a structured investment approach, targeting risk-adjusted returns combining debt and equity arbitrage positions. The subscription window of the scheme is January 9 to January 22, and it is intended for experienced investor segments. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.