Tata Mutual Fund : Titanium Hybrid Long-Short Fund SIF

S.Sridharan, Founder, https://www.walletwealth.co.in/

Product Type: Tata Mutual Fund Hybrid Long-Short Specialized Investment Fund

Investment Objective: Generate medium- to long-term capital appreciation by investing in equity, equity-related instruments, debt, and money market securities, including limited short exposure through derivatives.

Benchmark: CRISIL Hybrid 50+50 – Moderate Index (TRI)

Minimum Investment: ₹10 lakh aggregate at PAN level across Titanium SIF strategies.

Redemption: Once a month – first working day.

Exit Load:

· 1% if redeemed within 1 year

· Nil thereafter

Risk Band: Level 5 (higher risk category).

Portfolio Construction

Indicative Allocation:

Asset Class Allocation Equity (including derivatives) 65–75% Fixed Income 25–35%

REITs & InvITs 0–10%

Hedged derivatives can go up to 75%, while unhedged short exposure is capped at 25%.

The portfolio combines multiple return drivers such as equity long positions, arbitrage, fixed income, REITs/InvITs, and derivative strategies to reduce downside risk while capturing upside potential.

Investment Strategy

The fund dynamically adjusts exposure based on market conditions:

· Bull markets: Higher cash equity exposure with selective shorts to boost returns.

· Overvalued markets: Increase hedged/unhedged shorts and reduce cash equity to limit drawdowns.

· Range-bound markets: Tactical long-short allocation aimed at reducing volatility.

The strategy focuses on identifying strong businesses with effective management at reasonable valuations.

Why Long–Short?

Markets have historically spent 65% of the time in uptrends, with the remaining periods characterized by downtrends or sideways movement. Long–short strategies aim to benefit across these cycles rather than relying purely on rising markets.

Additionally, every year some stocks deliver negative returns—often a majority in certain periods—creating opportunities for short positioning to help reduce downside risk.

Positioning vs Traditional Products

The Hybrid Long-Short strategy sits between traditional hybrid funds and aggressive long-short AIFs with:

· Dynamic net equity exposure

· Gross exposure up to 100% of NAV

· Moderately high risk profile

It can move up or down the risk/reward ladder using derivatives to enable uncorrelated return drivers and improve risk-adjusted returns.

Recommendation Rationale

1. Suitable for the Current Market Regime

With markets experiencing valuation dispersion and periodic volatility, strategies that can go both long and short may help cushion drawdowns while participating in upside.

2. Portfolio Diversifier for HNI / Advanced Investors

Given the ₹10 lakh minimum and derivative usage, this is appropriate as a satellite allocation

for investors already holding traditional equity and debt exposure.

3. Potential for Better Risk-Adjusted Returns

The combination of equity, debt, arbitrage, and derivatives seeks to create uncorrelated return streams, reducing reliance on directional markets.

4. Bridge Between Mutual Funds and AIF-style Strategies

Offers institutional-style long-short capability within a regulated structure similar to mutual funds, making it a compelling alternative to investors seeking sophistication without moving fully into AIF risk territory.