Magnum Hybrid Long Short Fund: A smart investment option in challenging conditions

Welcome to the exciting world of SIFs. SBI MF has launched a Specialized Investment Fund (SIF), Magnum Hybrid Long Short Fund. SIFs are a new type of investment products which combine characteristics of traditional mutual funds and alternative investments like PMS or AIFs.

The 1^st strategy has opened for subscription on 1^st October 2025 and close on 15^th October 2025. In this article we will discuss about SIFs and the Magnum SIF's 1st strategy, Magnum Hybrid Long Short Fund.

What are Alternative Investment Funds?

Alternative investments are schemes which invest in non-traditional asset classes like venture capital, private equity, real estate or employ complex trading strategies through the use of derivatives. The minimum investment for AIF is Rs 1 crore.

What are SIFs?

SEBI has allowed mutual funds to create Specialized Investment Funds which bridges the gap between mutual funds and PMS / AIFs. SIFs will have the flexibility to use derivatives for different investment strategies. At this stage SEBI has permitted the following strategies for SIFs.

The minimum investment amount for SIF is Rs 10 lakhs.

What is Magnum Hybrid Long Short Fund?

The Magnum Hybrid Long Short Fund will invest in multiple asset classes like equity (65 - 75%), including the hedged and unhedged portion, debt (25 - 35%) and REITs / InvITs (0 - 10%) . The fund will use derivatives for reducing portfolio volatility.

What makes this fund unique?

The fund will use options in a collar strategy to reduce downside risks in extreme market conditions and at the same time generate stable returns for the investor. Collar strategy involves taking long position in a stock along, buying a put option and selling a call on the same underlying stock.

A combination of long position in a stock and buying a put option is known as protective put. A protective put limits downside risk and retains upside potential. If the stock price falls, the pay-off from the put option will offset the loss from the long position. A combination of long position and selling a call option is known as covered call. A covered call has significant downside risk, limited upside potential, but can generate higher returns in a flat or sideways market from the income received by selling the call option (option premium).

Collar is essentially a combination of protective put and covered call. Let us assume that you buy a stock at Rs 100 (long position in underlying stock). You sell a call option with strike of Rs 103. The call option premium is Rs 2. You also buy a put option with a strike of Rs 94. The put option premium is Rs 1. Let us consider 5 scenarios (see the table below). Your maximum profit is capped at Rs 4 and your maximum loss is capped at Rs 5, whether the price moves up or down. This strategy can be effective in a sideways market or a moderately volatile market, offering a balance between risk protection and income generation

Disclaimer: The above illustration is purely for investor education and not an investment recommendation

Who can find Magnum Hybrid Long Short Fund suitable?

• High Net Worth Individuals (HNIs): Investors seeking more advanced strategies than mutual funds but without the high entry barrier of PMS or AIFs.


• Those with a good understanding of financial markets and seeking exposure to long-short hybrid strategies with a minimum investment of ₹10 lakh


• Ideal for investors seeking long-term cash deployment with lower volatility over a 24-month horizon.


• Appeals to fixed income investors familiar with indexation benefits, orthodox banking customers, retirees and long-term arbitrage investors.

Investors should consult with their financial advisors and eligible mutual fund distributors if Magnum Hybrid Long Short Fund is suitable for their investment needs.