Upcoming NFO: Bandhan AMC Filed Draft for Arudha Equity Long-Short Fund

Arudha Equity Long-Short Fund is a new open-ended investment strategy proposed under the Specialised Investment Fund (SIF) framework. The strategy is being launched by Arudha SIF by Bandhan Asset Management Company.  

It allows investments in listed equity and equity-related instruments, along with limited short exposure through derivatives, in line with SEBI regulations. 

Investment Objective 

The stated objective of the fund is to generate long-term capital appreciation. This will be pursued through a diversified portfolio of equities, combined with selective short positions.  

The strategy does not offer any assurance of returns and is subject to market risks, including volatility and liquidity risks associated with equity and derivative instruments. 

Asset Allocation Framework 

The fund will allocate between 80% and 100% of its assets to equity and equity-related instruments. Short exposure through unhedged derivative positions is capped at 25% of net assets.  

Investments in debt and money market instruments may go up to 20%. Exposure to REITs and InvITs is also permitted within a 20% limit, depending on market conditions. 

Overseas Investments and Limits 

The strategy may invest in overseas securities, including foreign equities, subject to regulatory caps.  

During the 1st 6 months after the NFO closes, overseas investments are limited to $25 million, within the broader fund house and industry limits prescribed by SEBI and RBI. Investments in overseas ETFs are currently restricted, as per regulatory guidance. 

Benchmark, Risk Classification and Liquidity 

The fund will be benchmarked against the NIFTY 500 Total Return Index, which covers large-, mid- and small-cap stocks and represents a majority of India’s listed market capitalisation.  

It has been placed in Risk Band Level 5 under AMFI’s risk classification. Being open-ended, units can be bought and redeemed on all business days at NAV-based prices. 

NFO Details and Minimum Investment 

Units will be offered at ₹10 each during the New Fund Offer (NFO). The NFO will remain open for at least 3 working days and not more than 15 days, with final dates to be announced separately.  

The minimum initial investment is ₹10 lakh per PAN, with additional purchases allowed from ₹10,000. Accredited investors are eligible for a lower minimum investment of ₹1 lakh. 

Costs and Exit Conditions 

There is no entry load on investments. An exit load of 0.5% applies on redemptions made within 30 days from the date of allotment, with no exit load thereafter.  

Annual recurring expenses are capped at 2.25% of daily net assets, subject to applicable SEBI limits. 

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Conclusion  

The proposed fund outlines a diversified equity strategy with defined exposure limits, benchmarked to the NIFTY 500 TRI. Operational details such as loads, expenses and redemption timelines are aligned with regulatory norms. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/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 the related documents carefully before investing.