Quant MF Launches India's First 'Equity Long-Short SIF’: All You Need Know

Just about a month after becoming India’s first AMC to get SEBI’s approval to launch SIF (Specialized Investment Fund), Quant Mutual Fund had recently come forward with its first SIF ‘QSIF Equity Long-Short Fund’, with its NFO already open for a two week window of 17th September to 1st October 2025.

So in this latest blog of ours, we bring to you all the key information regarding Quant’s first SIF scheme – from its objective, investment strategy, asset allocation, risk profile, to minimum investment amount and expenses.

But first, let us refresh your memory on what SIFs are.

SIFs (Specialized Investment Funds) are a newly introduced category of mutual funds aimed at investors looking for advanced investment strategies. SIFs aim to fill the gap between mutual funds and PMS, in terms of minimum investment amount, portfolio flexibility, etc. Here’s a ready reckoner to help you understand it better, and compare it with other asset classes:

Quant Opens NFO Subscription For India’s First SIF

Quant has opened NFO subscription of India’s first SIF ‘QSIF Equity Long-Short Fund’, with an open-ended, equity-focused, long-short investment strategy. The NFO is open from 17.09.2025 to 01.10.25, with the pricing of Rs 10 per unit. The allotment date is 7th October 2025.

The AMC is expected to calculate and disclose the first NAV within five business days from the date of allotment under the NFO. Investors may apply for the NFO by contacting Quant mutual fund’s Investor Service Centres (ISCs) or Official Points of Acceptance (OPAs). For more details click here.

Key Features & Structure Of The Scheme

• Direct as well as regular plans offered for both Growth and IDCW (Income Distribution cum Capital Withdrawal) options

• NIFTY 500 Total Return Index (TRI) is used as the benchmark index against which investors can evaluate the fund's performance. In our view, investors should be careful while benchmarking against the Nifty 500 TRI, due to the following reasons:

-Chances of unrealistic expectations: Using Nifty 500 index as benchmark may create unrealistic expectations during bull markets, where long-short funds may underperform due to short positions dragging returns.

-Inappropriate performance measurement: The fund's 25% short exposure and derivative strategies create a fundamentally different risk-return profile than a long-only index like Nifty 500.

-Mismatch in strategy: Long-short funds may not really be correlated with traditional indices like Nifty 500 TRI. In such a case, for example, if the SIF doesn’t generate a good alpha over the index in a bull run, investors may panic; while in reality, it is not designed to mimic a larger equity index. In the same way, the converse could be true.

Having said that, SIFs are a new breed, so the market will evolve and better benchmarks may be established. Right now, investors should take the benchmark comparison with a pinch of salt.

• Minimum investment for this SIF is Rs 10 lakh if invested in lump sum, or Rs 10,000 if SIP route is chosen. Note that this Rs 10 lakh is not the minimum threshold for each scheme of the AMC. You can invest that Rs10 lakh in total across all schemes offered by the AMC/fund house, which, in this case is QSIF. So you can maybe invest Rs 6 lakh in QSIF Long-Short Fund and the other Rs 4 lakh out of the minimum Rs 10 lakh limit, in another QSIF scheme.

• Risk appetite for this scheme is high (level 5 in AMFI’s risk band).

• Expense ratio mentioned for this scheme is up to 2.25% of daily net assets.

• Exit load is 1% if redeemed/switched out on or before completion of 15 days from the date of allotment of units. No Exit Load if units redeemed/switched-out after 15 days from the date of allotment.

• Asset allocation adopted by this scheme is focused mostly on investment in equity and equity related instruments (at least 80%).

Here’s the precise breakup:

How Does The Long-Short Investment Strategy Work?

The ‘Equity Long-Short Investment Strategy’ offers a mix of taking long positions in undervalued stocks whose price is expected to rise, and short positions in overvalued stocks whose price is expected to fall.

Let’s make it simpler for you. A fund opting for a long-short strategy tries to make money in two ways, one is when the prices of some stocks go up, and the second one, when prices of some stocks go down.

Here’s how it works:

When a fund takes a long position, it buys stocks whose price is expected to rise, and therefore makes money when that happens.

On the other hand, when a fund takes a short position, it sells stocks whose price it thinks will fall. The catch here is that the fund does not actually own those stocks upfront, and has instead borrowed them usually through a broker who acts as a middleman. So, when these stocks drop in value, the fund sells these stocks and then buys them at a lower price later, which is how it ends up earning on that investment.

So, through this combination of taking long and short positions, the fund aims to get the best of both worlds, the rising as well as the falling market.

How does this strategy help?

• Reduces overall market risk: By pegging your moves based on the expected fall in the prices of some stocks and the rise in some others, the fund can minimize losses when stock markets fall (as the gains from short position can potentially offset losses from long position).

• Seek profits in any market: While more risky, this combination of long and short strategy holds the potential to seek profits in both scenarios of the market, when it's going up and/or when it's going down.

• Opportunity to capitalise on overpriced stocks: Long-short funds don’t just buy stocks that are cheap and likely to go up—they also sell stocks that are overpriced, hoping to buy them back later at a lower price and earn a profit from the difference between higher short sale price and the lower purchase price.

QSIF Equity Long-Short Fund’s Investment Approach

Long Equity Positions (80%–100%): At least 80% of net assets are invested in listed equity and equity related instruments, such as common stocks, preferred shares, and equity-linked securities (e.g., convertible bonds). These positions are selected based on fundamental analysis, targeting companies with strong growth prospects, attractive valuations, and sustainable competitive advantages. The long portfolio emphasizes diversification across sectors and geographies to reduce concentration risk while maximizing return potential.

Short Derivative Positions (upto 25%): The strategy employs unhedged derivative instruments, including stock futures, index futures, and options, to establish short exposures of up to 25% of net assets. These positions are designed to profit from declining prices of specific securities deemed overvalued or to hedge against broader market corrections. The tactical use of shorts allows the fund to generate returns in bearish or volatile market conditions, enhancing overall portfolio resilience.

Debt and Money Market Instruments (upto 20%): A portion of the portfolio, up to 20%, is allocated to debt or liquid money market instruments, such as treasury bills or short-term government bonds. This allocation allows a certain fixed return generation and serves as a liquidity buffer, enabling the fund to meet 15 redemption requests, seize new investment opportunities, or manage margin requirements for derivative positions without disrupting the core equity holdings.

Hedging Flexibility (up to 100% additional hedging): Beyond the 25% unhedged short exposure, the strategy allows for up to 100% hedging of the remaining long equity positions using derivative instruments, such as index futures, options. This capability enables the portfolio to achieve fully hedged exposure when market conditions warrant a defensive stance, such as during periods of heightened volatility or anticipated downturns.

Inside The Fund Management Team Of This QSIF Scheme

The ‘QSIF Equity Long-Short Fund’ is headed by the following fund managers who have a rich experience in risk appetite, valuation, debt and liquidity analytics:

1. Sandeep Tandon

Sandeep is the founder & chief investment officer of the Quant Group. He has a vast experience of around three decades in the capital markets, and has held key roles in GIC mutual fund, IDBI Asset Management, ICICI Securities, Kotak Securities and REFCO. He had also worked at the Economic Times Research Bureau. Currently he holds the position of QSIF’s CIO (Chief Investment Officer).

2. Lokesh Garg

Lokesh is one of the money managers in this fund. He has a rich experience of over two decades of experience in equity markets with Kotak Institutional Equities and Credit Suisse/UBS. He is also a Level III Chartered Financial Analyst and has also worked with ICICI Bank (Treasury) and Infosys.

3. Ankit Pande

Another fund manager for QSIF is Ankit Pande, who has over a decade of experience in Indian equities. After initially starting his career in core banking software with Infosys, Ankit has won the 2014 Thomson Reuters StarMine Analysts award for top ‘Industry Stock Picker’ in the IT sector. He has worked with foreign institutional investors across APAC in a business development role, and received his CFA charter from the CFA Institute, USA, in 2015.

4. Sameer Kate

With over two decades of experience in Indian equities and derivatives dealing, Sameer is also one of the key fund managers for Quant’s SIF scheme. He had previously worked for over 16 years at Kotak Securities as a sales trader and also as senior sales trader at Investec Capital covering equity and derivatives trading for domestic and foreign institutional clients.

5. Sanjeev Sharma

Sanjeev brings a rich and diverse experience of over 15 years in the capital markets, prior to his role as a fund manager for QSIF. He specializes in analysis of credit risk and monitoring plus assessing investment opportunities across asset classes. He has a deep understanding of macroeconomic policies and its impact on the credit markets. Previously he had worked with the Tipsons Group, Escorts Mutual Fund, and PACE group.

Risks Associated With QSIF Long-Short Equity Fund

1. Risk category of level 5

The level 5 risk assigned to this long short equity scheme of QSIF indicates that investors face the highest possible risk of losing their principal investment. This makes such a fund only suitable for aggressive investors who are aware of the possible losses and willing to take such a high risk.

2. Possibility of unlimited losses on short side

If a stock that the fund had shorted goes on to sharply rise instead of falling, the possible loss can be unlimited, because theoretically a stock's price can keep rising forever.

3. Complexity and Transparency Issues

If you are not well-versed with such deep concepts such as long-short funds, it might get difficult to understand and monitor these funds when compared to the usual equity funds. Moreover, some fund managers may use even more complex derivative strategies, making it harder to understand for you as an investor, regarding what risks are being taken.

What About Taxation On Returns?

Gains on transfer/redemption of SIF’s units are determined based on the type of mutual fund and the holding period. The taxation rules are the same as those applicable for respective categories of mutual funds.

Here’s a summary of the applicable taxation rules for this equity oriented SIF:

What To Consider Before Investing In This Scheme?

Presence of high-risk: This fund is specifically suitable for investors who can afford to take substantial risks, as the Level 5 risk rating (as per AMFI’s scale) indicates that this is the highest risk category. So factor in this aspect before investing in this scheme.

Uncertain expense ratio: QSIF’s long short equity scheme has currently mentioned‘ upto 2.25%’ expense ratio. So, the exact expense ratio is not yet determined, and it might become clearer after the NFO, since the AMC would only then ascertain its final costs as per actual fund operations, administration fees, transaction costs, etc.

Not suitable for novice investors: This fund targets investors who understand and are comfortable with complex investment strategies, including derivative instruments and short-selling mechanisms. The strategy involves multiple sophisticated techniques including synthetic shorts, bear spreads, and various options strategies, which a novice investor may not understand.

Should You Invest In Quant’s NFO of India’s First Long Short Equity SIF?

Pros of investing in this NFO

• Fixed price of ₹10 per unit during the NFO.

• Early access to the fund’s strategy as one of the first investors.

• Potential to earn higher returns if the fund performs well soon after the NFO and the NAV rises.

• Opportunity to participate in India’s first long-short equity SIF.

Cons of investing in this NFO

• No performance tracking data available at this stage.

• Lack of visibility into the fund’s exact portfolio composition.

• Limited insights into strategy execution during the NFO.

• Some funds may go through a volatility or adjustment phase right after the NFO, which could be avoided by investing later.

• Exact expense ratio and fund behavior will only become clearer post-NFO.

Conclusion

It’s a no-brainer that Quant Mutual Fund's launch of India's first SIF, the QSIF Equity Long-Short Fund, marks a significant milestone in the mutual fund landscape, as it offers sophisticated investors a new avenue for advanced investment strategies. But, although the fund presents opportunities for high returns through its long-short strategy, it also carries substantial risks, making it suitable primarily for experienced investors with a high-risk tolerance.

As an investor you should carefully consider the fund's risk profile, the complexity of its strategies, and the lack of historical performance data before investing in its NFO and even in the initial phase post that. And as usual, do thorough research and have a clear understanding of your financial goals and risk appetite before putting your hard-earned money into any asset class. Consult with your trusted and reliable financial advisor before going forward.

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Please note that this is an opinion blog and not official research advice. This blog aims to promote informed decision-making and neither encourages nor discourages you from investing in any asset class or deal or platform.