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  3. SBI MF's Magnum SIF to debut Oct 1 with hybrid long-short scheme

SBI MF's Magnum SIF to debut Oct 1 with hybrid long-short scheme

24 Sept 2025

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Key Takeaways

Magnum SIF offers higher potential returns than arbitrage funds with structured downside protection, while returns will be taxed under equity rules.

Magnum SIF offers higher potential returns than arbitrage funds with structured downside protection, while returns will be taxed under equity rules.

sbi fund management unlisted shares

SBI Fund Management

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Expert Analysis

SBI MF to Launch Magnum SIF Hybrid Long-Short Fund on October 1.

Expert Analysis:

  • Scheme Launch & Structure: SBI Mutual Fund’s Magnum SIF will launch on October 1 as a hybrid long-short fund, designed for investors seeking debt-like returns with equity taxation.

  • Return Potential: The scheme aims to deliver returns a few percentage points higher than arbitrage funds, though it carries slightly higher risks compared to arbitrage strategies.

  • Investment Strategy: The fund will use a collar strategy, selling call options and buying put options on portfolio stocks to generate premium income while limiting downside risk.

  • Portfolio Allocation: Covered equity will form 55-75 per cent of the portfolio; 25-35 per cent will be in debt instruments; up to 10 per cent in REITs/InvITs; and up to 25 per cent in unhedged derivatives.

  • Taxation: Returns from the scheme will attract equity taxation, aligning with investors seeking equity-style tax treatment on hybrid returns.

  • Regulatory Update: Separately, a Sebi panel may recommend public disclosure of assets for its chairman and senior officials to address conflict-of-interest concerns, aligning with global practices.

Publisher:Business Standard