Union Mutual Fund Launches Equity Long-Short Fund Under Arthaya SIF Platform

Union Mutual Fund Enters Equity Long-Short Investing with Arthaya SIF Platform

Union Mutual Fund (Union MF) has announced its entry into equity long-short investing with the launch of its Specialized Investment Fund (SIF) platform, Arthaya SIF. The platform's first offering, Arthaya Equity Long Short Fund, will open for subscription from May 4 to May 18, 2026.

The Arthaya SIF platform seeks to bridge the gap between traditional long-only funds and alternative strategies by offering a flexible, risk-aware approach within a regulated structure, making sophisticated strategies more accessible. With the Equity Long Short strategy, Union MF is introducing a framework that allows portfolios to respond to markets, not just participate in them. This structure enables the fund to actively manage risk while maintaining participation in equity markets.

The investment strategy follows a "three-pillar" construct combining liquidity, core equity exposure, and opportunistic positioning. Within equities and related instruments, the indicative allocation allows 65% to 100% in cash equities, 0% to 35% in derivative equities, and up to 25% in non-hedging short positions, with hedging shorts potentially covering up to 100% of cash equity exposure.

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The portfolio stance is designed to shift dynamically across market conditions. In bullish phases, net equity exposure can rise to around 70%–95% to capture upside, while in bearish environments it may be reduced to as low as 0%–40% to limit downside risk. In flat or range-bound markets, exposure typically ranges between 25% and 75%, balancing return generation with capital preservation.

The core of this strategy lies in identifying dislocations where price diverges from underlying fundamentals and building long and short exposures around that insight. The long portfolio focuses on businesses with earnings visibility, while the short portfolio targets structurally weaker companies or mispriced opportunities.

Union MF has invested significantly in building specialized capabilities for this strategy. The AMC has built a dedicated investment capability rather than taking shortcuts, noting that shorting requires a very different skill set and mindset.

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The fund house has also focused on building distribution readiness for the new category, given its relatively higher complexity compared to traditional mutual funds. Union MF has conducted over 40 training sessions, reaching more than 1,200 participants across banks, firms, and independent financial advisors, and contributing to nearly 800-900 certifications in the SIF segment. The AMC aims to expand this base further to improve reach and ensure the product is appropriately positioned among investors.

While it is currently focused on equity strategy, the AMC will look to expand into other categories such as hybrid and ex-top 100 offerings over time.