Upcoming NFO: Franklin Templeton Mutual Fund Unveils Sapphire Equity Long-Short SIF Strategy

Franklin Templeton Mutual Fund has launched Sapphire Equity Long-Short SIF, its first scheme under the specialised investment fund (SIF) framework. The New Fund Offer (NFO) will open on April 10 and close on April 24, 2026. 

The scheme will invest across the Nifty 500 universe, providing exposure to large-, mid- and small-cap stocks. It will be benchmarked against the Nifty 500 Total Return Index.  

The minimum initial investment is ₹10 lakh, with subsequent investments allowed in multiples of ₹10,000. 

Investment Approach 

The fund will follow a long-short equity strategy, combining long positions with selective short exposure. Under SIF norms, short positions can account for up to 25% of net assets. This allows the portfolio to adjust to different market conditions, including periods of decline. 

The strategy is to generate returns over the benchmark through allocation across stocks and sectors, rather than relying only on market direction. It is designed to operate across market cycles. 

Quantitative Framework 

As per the filing, stock selection will be based on a model-driven approach. The framework evaluates more than 40 indicators across categories such as quality, value, sentiment, and alternative data. These include earnings expectations and momentum-related signals. 

Stocks are scored and ranked within the model to identify both long opportunities and short candidates. The process is structured and repeatable, with periodic rebalancing based on updated data inputs. 

Portfolio Construction and Risk 

Portfolio construction factors in liquidity, sector exposure, company size and risk characteristics. 

The fund also applies limits and controls within the portfolio to avoid concentration and unintended exposures. The approach combines systematic inputs with oversight during portfolio construction. 

Read More: Upcoming NFO: SBI Mutual Fund Filed Draft for SBI Nifty G-Sec 2031 Index Fund! 

Conclusion 

The Sapphire Equity Long-Short SIF marks the fund house’s entry into the SIF category. The scheme adds a long-short equity option within the mutual fund space, with a focus on model-based stock selection and defined risk parameters. 

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.