What is an equity long-short SIF in India?

An Equity Long-Short SIF is a SEBI-defined SIF category that invests predominantly in equities and takes both long (buy) and short (sell via derivatives) positions to generate returns. These funds aim to profit from both rising and falling stock prices while managing net equity exposure within SEBI-defined ranges.

How much can an equity long-short SIF short in India?

SEBI defines gross and net exposure limits for equity long-short SIFs. Gross exposure (long + short) can typically go up to 200% of NAV. Net long exposure (long minus short) is typically between 0% and 100%. Individual AMC mandates may be more conservative within these SEBI limits.

Which AMCs offer equity long-short SIFs?

Several AMCs have launched equity long-short SIFs, including Quant, 360 ONE, ITI, and ICICI Prudential. AMCs eligible to launch SIFs must meet SEBI's eligibility criteria including either 3 years of operation with ₹10,000 crore average AUM, or an alternate CIO-led eligibility route. Check SIFscan's fund universe for the complete current list.

What benchmark do equity long-short SIFs use?

Most equity long-short SIFs use Nifty 50 or Nifty 500 as their primary benchmark. However, since these funds can be net-short or hedge significantly, traditional benchmarks may not be directly comparable. Some AMCs use customized benchmarks or blended indices to reflect their long-short mandate.

What is the difference between Equity Long-Short and Equity Ex-Top 100 Long-Short SIF categories?

The Equity Long-Short category can invest across all market caps. The Equity Ex-Top 100 Long-Short category excludes the top 100 stocks by market cap (Nifty 100), focusing on mid and small caps. This creates a differentiated risk-return profile with potentially higher alpha opportunities and higher volatility.

Equity Long-Short SIFs: Category Guide

Equity Long-Short is a core SIF category, requiring 65%+ domestic equity allocation with up to 25% short positions via derivatives.

Reviewed Mar 20261 official source6 min readFact-checked against official sources

What you'll learn

1SEBI mandate: 65%+ equity allocation requirement

2Gross and net exposure limits

3How short positions and derivatives are used

4Risk profile and what to verify in scheme documents

Key Takeaway

Equity Long-Short is the most popular SIF category, requiring 65%+ equity allocation with the ability to take short positions via derivatives. Gross exposure can reach 200% of NAV, with net long exposure ranging from 0% to 100%. These funds aim to profit from both rising and falling stock prices.

What is the Equity Long-Short SIF Category?

Equity Long-Short is one of seven SEBI-defined SIF categories. These funds maintain a minimum 65% allocation to domestic equities while using derivatives to take short positions for hedging and alpha generation. The category is designed for fund managers to express both positive and negative views on individual stocks or sectors within a predominantly equity portfolio.

SEBI Mandate Details

Parameter	Requirement
Minimum equity allocation	65% in domestic equities (mandated)
Maximum unhedged short position	Up to 25% of portfolio via derivatives
Derivatives usage	Permitted for both hedging and alpha generation
Universe	All listed domestic equities (no market cap restriction)
Benchmark	As declared in Scheme Information Document
Minimum investment	₹10 lakh (PAN level across AMC's SIF schemes)
NAV frequency	Daily
Risk band disclosure	Monthly (1-5 scale)
Portfolio disclosure	Alternate months (full holdings)

How Long-Short Works in This Context

In an equity long-short SIF, the fund manager takes long positions in stocks expected to appreciate and short positions (via derivatives) in stocks or indices expected to decline. The "long-short" approach aims to generate returns from both rising and falling prices, while potentially reducing net market exposure compared to a fully long portfolio.

Long positions: Direct equity holdings in stocks where the manager has a positive view
Short positions: Derivative positions (futures, options) expressing a negative view on specific stocks or sectors
Net exposure: The combined long minus short exposure determines the fund's effective market sensitivity
Constraint: The 65% minimum equity allocation ensures the fund remains predominantly equity-oriented regardless of short positions

Derivatives Usage

Unlike mutual funds, which may only use derivatives for hedging, equity long-short SIFs can deploy derivatives for alpha generation. This includes taking directional short positions on individual stocks or indices, constructing pair trades, and implementing relative value strategies. The maximum unhedged short exposure is capped at 25% of portfolio value by SEBI, ensuring that the fund cannot become predominantly short or take excessive directional risk.

Typical Portfolio Structure

While each fund's portfolio will vary based on the manager's strategy and market view, a representative equity long-short SIF portfolio may look like:

65-95% in long equity positions: Direct stock holdings across market capitalizations
5-25% in short derivative positions: Index futures, stock futures, or put options
0-15% in cash/equivalents: For liquidity, margin requirements, and tactical deployment
Net equity exposure: Typically 50-85%, depending on market conditions and manager conviction

View Equity Long-Short SIF Funds

See the current list of equity long-short SIF schemes with NAV, AUM, and risk data.

Browse Equity Long-Short SIFs

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This content is for educational purposes only and does not constitute investment advice. Regulatory frameworks may change. Always verify with official SEBI circulars and consult a qualified financial advisor before investing. Last updated: March 2026.