Edelweiss MF’s Altiva Equity Long Short Fund to launch September 10, Radhika Gupta explains strategy

Edelweiss Mutual Fund is set to launch its third strategy under the Altiva Specialised Investment Fund (SIF) umbrella, with the Altiva Equity Long Short Fund opening for subscription on September 10.

This long-short strategy seeks to address a key challenge for investors: generating consistent alpha from large-cap equities through income oriented derivatives without relying solely on stock-picking.

Also Read | Altiva Equity Long Short Fund to launch on September 10; Radhika Gupta explains its large-cap alpha strategy

According to Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, the strategy is designed to deliver consistent large-cap alpha through income-oriented derivatives strategies, rather than depending entirely on individual stock selection. The fund will combine large-cap equity exposure with a derivatives overlay to seek additional income and enhance returns.

She posted on social media platform X that, “Altiva’s next fund (Equity Long Short) in 4 slides. The solution: consistent large cap alpha through income oriented derivatives (not stock picking).”

The portfolio positioning of the fund indicates that it aims to combine beta, stock alpha, and derivative income alpha to deliver alpha at comparable risk. Large-cap equities typically form the core of investor portfolios because of their relative stability and resilience.
The strategy is expected to behave differently across market conditions. Over the multiple cycles, the strategy aims to generate alpha over the benchmark and other large cap strategies.According to Gupta, it is designed to perform relatively well during flat or bearish markets, while investors should be prepared for the possibility of it trailing the broader market during exceptionally strong rallies. For instance, in a month when the market rises sharply by around 10%, the strategy may not capture the entire upside.

The fund house said that in the bull market phase, the fund is expected to be inline with the market over rising market phases and may miss some upside during sharp market rallies. In the bear market phase, the fund aims to outperform the market during extended bear market periods and it can experience slightly lower drawdowns vs the benchmark during sharp market falls. The fund aims to outperform in flat market conditions.

The trade-off is intended to be more consistent performance across market cycles, with the fund targeting alpha over the Nifty 100 while seeking volatility comparable to other large-cap-oriented strategies. The strategy also aims to limit drawdowns during sharp market corrections.

Altiva’s three-solution ladder

The Altiva SIF platform is being positioned around three different investor requirements and these three strategies are designed to address income generation, large-cap alpha, and focused exposure to mid- and small-cap stocks.

The new Altiva Equity Long Short Fund sits in the second category, targeting investors looking for large-cap exposure with a more consistent alpha-generation approach. The other strategies are aimed at investors seeking income generation and focused mid- and small-cap opportunities.

Gupta has previously emphasised that investors should look at SIFs as solutions to specific portfolio requirements rather than simply adding another product to their portfolios.

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Altiva Equity Long Short Fund

Altiva Equity Long Short Fund will be an open ended equity investment strategy investing in listed equity and equity related instruments including limited short exposure in equity through derivatives instruments.

The fund will open for subscription on September 10 and will close on September 24. The fund will be managed by Bharat Lahoti, Bhavesh Jain and Amit Vora.

The fund will aim to generate alpha over Nifty 100 across cycles, with volatility comparable to other large cap oriented strategies. From this fund, investors can expect relatively consistent outperformance than traditional large cap strategies and lower drawdowns in sharp corrections; may miss some upside during sharp market rallies, according to the fund presentation.

The minimum investment amount will be Rs 10 lakh. Existing Altiva SIF investors who have met the minimum threshold may invest Rs 1,000 and in multiples of Re 1 thereafter. Minimum investment in SIP, STP, SWP (subject to min investment of Rs 10 lakh) will be Rs 1,000 and in multiples of Re 1 thereafter.

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