An in-depth, non-advisory explainer on Altiva Hybrid Long-Short Fund – Regular Plan – Growth: how the SIF structure, MIT monitoring, derivatives-based hedging, and slab-rate taxation impact suitability for medium- to long-term HNI portfolios.
Altiva Hybrid Long-Short Fund – Regular Plan – Growth is a hybrid long–short scheme under the Altiva SIF platform of Edelweiss Mutual Fund, launched as a Specialised Investment Fund (SIF) within SEBI’s mutual fund regulations. The fund was offered via NFO in early October 2025 (around October 1–15, 2025), with units allotted and the scheme becoming operational towards the end of October 2025 (around October 28, 2025).
As of the latest available data in mid‑December 2025, the fund’s NAV is around ₹10.23, with an AUM of roughly ₹614 crore, and a portfolio allocation of approximately 35–38% in equity, about 42% in debt, and the balance in cash, cash‑equivalents and arbitrage positions. This positioning confirms that the strategy is more debt/arbitrage‑dominated and income/hedge‑oriented, rather than a high‑beta, equity‑heavy product.
Investment objective and core strategy
Edelweiss MF disclosures state (paraphrased) that the fund aims for long‑term capital appreciation and income by investing in a diversified mix of equity, debt, money market instruments and derivatives, with a deliberate focus on arbitrage and fixed income for income generation and hedging. The documents also clearly note that there is no assurance or guarantee that this objective will be achieved.
The core strategy combines:
- A core arbitrage book, using cash–futures spreads and other low‑risk relative‑value opportunities to generate carry.
- A fixed‑income sleeve invested in government securities, high‑quality corporate bonds and money‑market instruments, subject to defined credit and duration risk parameters.
- Selective long equity exposure in stocks or themes where the team sees attractive risk–reward, sized more modestly than in aggressive hybrid equity funds.
- Derivatives for hedging and long–short positioning, with internal caps on short exposure and controls on gross/net exposure aligned with SEBI and scheme‑level limits.
Overall, the strategy aims to generate risk‑adjusted returns by combining income (debt + arbitrage) with moderated and hedged equity exposure, while actual outcomes remain highly dependent on spreads, rate cycles, volatility and manager execution.
SEBI SIF framework and AMC eligibility
Altiva Hybrid Long-Short is part of SEBI’s Specialised Investment Funds framework notified via circular dated February 27, 2025 and effective April 1, 2025, which overlays SIF‑specific conditions on the SEBI (Mutual Funds) Regulations, 1996. This framework allows more complex strategies, hybrid long‑short, market‑neutral, volatility‑managed, to operate under a mutual fund wrapper with defined disclosure, risk and monitoring standards.
AMCs can offer SIFs only if they qualify through:
- Route 1: Minimum operating history (for example at least 3 years) and minimum average AUM (such as ₹10,000 crore), demonstrating operational scale.
- Route 2: A route based on experienced key personnel, requiring a qualified CIO/fund manager and investment team with strong and relevant long‑term experience.
Edelweiss MF meets the framework requirements and launched the Altiva SIF platform accordingly. SEBI also restricts each AMC to one SIF scheme per specific strategy type, so Altiva Hybrid Long-Short is Edelweiss’s flagship hybrid long‑short SIF under this regulation.
₹10 lakh PAN–AMC minimum investment threshold (MIT)
SIFs are subject to a ₹10 lakh Minimum Investment Threshold (MIT) applied at the PAN–AMC aggregate level, not at individual scheme level. For Altiva Hybrid Long-Short this means:
- All SIF holdings under Edelweiss Altiva SIF (this scheme plus any other Edelweiss SIFs) are aggregated per PAN to check the ₹10 lakh MIT.
- As long as the combined market value of all Edelweiss SIF units for that PAN is at or above ₹10 lakh, the MIT is satisfied, except for accredited investors, who are exempt from MIT as per SEBI norms.
Investors can build and maintain this threshold through lump sums and, where allowed, SIP/STP flows, subject to scheme‑level minimums. Edelweiss MF must monitor MIT on an ongoing basis using daily valuations and transaction data and identify any breaches as active or passive.
Active vs passive MIT breach – SEBI expectations
SEBI’s July 29, 2025 circular on MIT monitoring distinguishes between active and passive breaches.
- Active breach (investor‑driven): occurs when MIT dips below ₹10 lakh because of an investor action, such as:
- Redemption or switch that reduces total SIF holdings with Edelweiss MF below ₹10 lakh.
- Change in holding pattern or transfer that lowers aggregate value for that PAN.
- The AMC must freeze further SIF purchases for that PAN until MIT is restored.
- The investor is given a 30‑day rectification window to top up and bring the aggregate back to at least ₹10 lakh.
- Failure to rectify within the stipulated period can lead to auto‑redemption or other actions consistent with the SID and board‑approved SIF policy.
- Passive breach (market‑driven): occurs when the MIT falls below ₹10 lakh due solely to market movements (for example, NAV decline) without any investor‑initiated redemption or switch.For passive breaches:
Altiva Hybrid Long-Short, as part of Altiva SIF, follows this framework; investors should review the latest SID, addenda and Edelweiss policy for scheme‑specific handling.
Taxation – pass-through and likely non-equity status
Altiva Hybrid Long-Short, being a mutual fund SIF, enjoys pass‑through status under Section 10(23D), so tax is levied at the investor level, not on the fund itself. Tax treatment depends on whether the scheme is classified as equity‑oriented or non‑equity (debt/hybrid) for tax purposes, determined by its asset mix.
The broad framework is:
- Equity‑oriented mutual funds:
- Non‑equity / specified mutual funds (debt‑oriented or hybrids not qualifying as equity‑oriented):
Given the current allocation and the dominance of debt and arbitrage over equity, publicly available data and analysis indicate that Altiva Hybrid Long-Short will typically be treated as a non‑equity / hybrid fund, so in most cases slab‑rate taxation will apply to capital gains under prevailing rules. Investors should always:
- Confirm the scheme’s current tax classification from Edelweiss’s latest disclosures and SID.
- Integrate this into their broader tax planning and consult a tax professional or SEBI‑registered investment advisor, as this section is informational, not personalised tax advice.
KYC, PAN mapping and onboarding
Investing in Altiva Hybrid Long-Short requires full KYC compliance under SEBI and PMLA norms via KRA/CKYCR using PAN, valid ID/address proof, photograph and bank details. KYC can be completed:
- Online (e‑KYC or video KYC) through Edelweiss MF or partner platforms.
- Offline via physical forms and in‑person verification with distributors or RTAs.
Because MIT is tracked at the PAN–AMC level across all Edelweiss SIFs, accurate PAN mapping is critical for:
Investors can transact via:
- Edelweiss MF/Altiva SIF website and app for direct plans.
- Online MF platforms, exchange‑based systems (BSE StAR MF / NSE MFSS) and select fintech apps that support SIFs.
- SEBI‑registered mutual fund distributors and RIAs.
Once KYC and mandates are in place, investors may make lump‑sum investments or, where permitted, set up SIPs/STPs, ensuring cumulative SIF holdings remain aligned with the ₹10 lakh MIT.
Liquidity, interval structure and exit options
Altiva Hybrid Long-Short is structured as an interval‑type SIF, not a standard daily‑liquidity open‑ended fund. As per fund documents and public communication:
- Subscriptions are generally allowed on all business days at applicable NAV, subject to exit loads (if any) and operational cut‑offs such as order timing and minimum purchase amounts.
- Redemptions are available twice a week, typically on Monday and Wednesday, at the applicable NAV for those days, again subject to any exit loads and operational cut‑offs laid out in the SID/KIM.
- In line with SEBI norms for interval/closed structures, the AMC may use up to a 15‑day notice period for certain actions, with exact conditions described in scheme documents.
The scheme is also required to be listed on recognised stock exchanges, enabling secondary‑market trading in units. However, secondary‑market liquidity, volumes and spreads can vary significantly, so exchange trading should be treated as an additional liquidity avenue rather than a guaranteed daily exit mechanism.
Investors therefore should:
- Plan primary‑market liquidity around the twice‑weekly redemption windows (Monday and Wednesday).
- View the exchange listing as a supplementary route that may or may not offer tight spreads or depth at any given time.
Given this interval structure and strategy, the fund is aligned with medium‑ to long‑term horizons (for example, 3–5 years+), not for investors needing frequent or same‑day liquidity.
Key risks, suitability and portfolio role
Key risks include:
- Strategy and manager risk: Outcomes depend on the team’s ability to execute arbitrage, manage the debt book, and calibrate long and hedged equity positions; there is no guarantee of positive or benchmark‑beating returns.
- Credit and interest‑rate risk: The debt allocation can face downgrades, defaults and mark‑to‑market losses if issuers’ credit quality deteriorates or rates move adversely.
- Derivatives and basis risk: Use of derivatives introduces basis risk (mismatch between cash and futures), margin risk and model risk, especially in volatile or dislocated markets, impacting arbitrage and hedging effectiveness.
- Liquidity and MIT risk: Interval‑style redemptions (twice weekly), possible notice periods, and MIT rules mean poorly timed redemptions or switches may trigger active breaches, purchase freezes and, if unrectified, auto‑redemption as per policy.
Given these characteristics, the fund is generally more suitable for:
- HNI and experienced investors who already hold a diversified core of traditional equity and debt mutual funds or other instruments.
- Those looking to add a satellite allocation (commonly 5–20% of overall financial assets) to a strategy that aims at risk‑adjusted returns via income, arbitrage and moderated equity exposure rather than pure equity beta.
- Investors who understand that outcomes are manager‑ and market‑dependent, accept non‑daily liquidity, and are comfortable with the specific credit, derivatives and basis risks involved.
This article is an informational overview only and does not constitute investment, tax or legal advice. Before investing in Altiva Hybrid Long-Short Fund – Regular Plan – Growth, investors should read the latest Scheme Information Document and related disclosures and consult a SEBI‑registered investment advisor and/or tax professional to evaluate suitability for their personal circumstances.