Upcoming NFO: HSBC Mutual Fund Files Draft for RedHex Hybrid Long-Short Fund via SIF

HSBC Mutual Fund, under its SIF, RedHex Hybrid Long-Short Fund, has submitted its draft Investment Strategy Information Document (ISID) under the specialised investment fund framework.  

Structure and Offer Details 

The strategy is structured as an interval fund investing in a mix of equity and debt instruments, with limited use of short positions through derivatives.  

The units are proposed to be issued at ₹10 during the new fund offer (NFO). The fund is expected to be listed on the NSE. Subscriptions will be available on all business days, while redemptions will be processed weekly, subject to a 10 working day notice period.  

Allocation Framework 

The investment strategy allows flexible allocation between asset classes. Equity and equity-related instruments can account for 25% to 75% of the portfolio, while debt and money market instruments may also range between 25% and 75%.  

Use of derivatives is permitted for hedging and portfolio positioning. Exposure for non-hedging purposes is capped at 25% of net assets. The strategy also allows investment in overseas securities up to 30% and securitised debt up to 20% of net assets.  

The equity component is expected to include arbitrage-based positions, while the debt portion may include higher-yield instruments with relatively higher credit risk.  

Investment Terms 

The minimum application size during the offer period is ₹10 lakh, with a lower threshold of ₹1 lakh for accredited investors. Systematic investment options are available, subject to meeting the overall minimum investment requirement.  

An exit load of 2% is applicable if units are redeemed within 1 year of allotment. No exit load is charged after this period. Annual recurring expenses are estimated at up to 1.85% of daily net assets, in line with regulatory limits.  

Risk Disclosures 

The filing notes that the strategy carries risks linked to market movements, liquidity, and potential loss of capital. It also clarifies that regulatory filings do not imply approval or assurance of returns.  

The strategy does not have a performance track record, as it is a new offering. Portfolio allocation may be adjusted within prescribed limits based on market conditions and regulatory requirements.  

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Conclusion 

The draft outlines a hybrid approach combining equity, debt and derivative exposure within defined limits. Performance will depend on deployment and prevailing market conditions after launch. 

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 Funds Investments are subject to market risks, read all the related documents carefully before investing.