Tata MF launches first SIF product - Titanium Hybrid Long–Short Fund

Vardharajan said the fund aims for outcomes similar to aggressive hybrid returns but with a risk profile close to balanced-advantage funds. The product allows a net equity range from -25 percent to plus 75 percent, making it possible to be fully short, fully hedged or meaningfully long depending on market conditions.

Tata Mutual Fund has launched its first SIF product, the Titanium Hybrid Long–Short Fund, positioning it as an “aggressive hybrid” offering within the newly introduced SIF framework. The fund, according to Anand Vardarajan, Chief Business Officer at Tata MF, is designed to give investors the ability to participate across market cycles while benefiting from a tax structure he described as potentially “transformational” for long–short strategies in India. Titanium Specialized Investment Fund (SIF)’s new fund offer opens on November 24, 2025, and closes on December 8, 2025. This is the fourth fund house to launch in the hybrid long-short category.

Vardarajan said the domestic mf industry’s nearly Rs 76 lakh-crore AUM continues to rely heavily on directional equity, even though long-term Nifty 50 data shows markets stay sideways or fall almost 40 percent of the time. Traditional long-only structures, he noted, force investors to wait through these periods. He referenced years such as 2007 to 2009, when a majority of Nifty stocks delivered negative returns, to illustrate how difficult it is for investors to generate gains without the ability to express negative views.

He argued that a long–short structure changes that dynamic entirely, likening it to a batsman restricted to one side of the field suddenly playing a switch-hit. “You see opportunities that simply weren’t accessible before,” he said.

Tata MF chose the hybrid route for its first SIF to align with its broader philosophy of asset allocation. Anand made it clear that the fund is not an arbitrage-plus variant but a genuine aggressive hybrid, backed by the flexibility that hybrid taxation permits. He stressed that many fund houses limit themselves by prioritising equity taxation, which forces tight portfolio structures. “It’s like being given a football field but choosing to play only on a chessboard,” he said. “Hybrid taxation opens up the full field,” he explained.

He explained that hybrid SIF taxation mirrors equity in the long term: after a two-year holding period, investors pay the same long-term capital gains rate as equity. The key difference is the holding-period threshold—two years instead of one—but Vardarajan said this aligns well with typical investor horizons in hybrid and multi-asset strategies.

He highlighted two additional tax elements he believes are underappreciated. First, short-term gains in a hybrid SIF are taxed at the investor’s slab rate, which he pointed out is highly favourable for individuals with taxable income below Rs 12 lakh. “For a large section of the market, short-term gains effectively become tax-free. That is a very powerful sweetener,” he said. Second, unlike AIFs, which tax gains at the security level and on churn, SIFs tax investors only at the time of redemption. “There is no interim taxation. You don’t pay tax each time the fund manager adjusts the portfolio. You pay only when you exit. That is a huge advantage for long–short strategies, because there is no such derivative product today where you get capital gains treatment only at exit,” he explained.

While withholding precise back-test numbers, Anand called the results “very encouraging” and said the fund aims for outcomes similar to aggressive hybrid returns but with a risk profile close to balanced-advantage funds. The product allows a net equity range from -25 percent to plus 75 percent, making it possible to be fully short, fully hedged or meaningfully long depending on market conditions.

He also elaborated on the indicative portfolio construction, emphasising that actual allocations may vary but the structure is conceptually clear. Roughly half the portfolio could be in equities, about 25 percent in fixed income to meet regulatory requirements, and another 20-25 percent in highly liquid instruments that provide margin efficiency. The derivatives overlay would be built on this liquid segment, with the potential to generate returns stronger than traditional equity exposures. He described it as an architecture where investors simultaneously experience fixed-income-like behaviour, liquid-return behaviour, and equity-like behaviour, while gaining enhanced return potential from the long–short book.

Vardarajan said the product is designed for a broad audience ranging from hybrid-fund users seeking more flexible tools to HNIs, UHNIs and AIF or PMS clients who value long–short frameworks but want better tax economics and daily NAV transparency. Reducing ticket size to Rs 10 lakh, he noted, allows investors to use the product without needing extremely large portfolios, unlike long–short AIFs where a Rs 1-crore minimum can distort overall wealth allocation unless net worth is substantially higher.

He acknowledged that distributor certification is still ramping up, but said the pace of month-on-month growth is “very encouraging” and interest is visible across MFDs, national distributors and wealth managers. He expects certification numbers to reach critical mass over time as awareness deepens.

Despite multiple SIF launches in the hybrid space, Vardarajan said Tata MF’s positioning remains distinct. He believes most offerings so far fall into arbitrage-led or conservative-hybrid structures, leaving the aggressive hybrid category relatively uncluttered. This clarity, he said, should help the product stand out.

Addressing concerns that long–short strategies may appear risky, he compared derivatives to a reverse gear and handbrake in a car—features that make navigation safer when used properly. He believes SIFs will rapidly find their place in investor portfolios because they provide a systematic way to manage risk while still capturing opportunity.

“You can choose to participate in only sixty percent of the market, or you can choose to participate in the entire hundred percent. And with the same tax benefits, the decision is obvious,” Vardarajan said. “This is an opportunity whose time has come.”

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