Indian hybrid long-short funds drive record SIF inflows
Assets in India's specialized investment funds surged 29% in June as affluent investors funneled record monthly contributions into hybrid long-short strategies, signaling a broad shift toward hedged equity.
India's specialized investment funds (SIFs) saw assets under management jump to Rs 17,858 crore at the end of June, propelled by a 171% month-on-month surge in net inflows. The growth was overwhelmingly concentrated in hybrid strategies, which now account for 72% of the category's total assets at Rs 12,822 crore.
Hybrid long-short funds dominated the segment, representing 67% of total SIF assets at Rs 11,910 crore. These funds attracted Rs 2,043 crore in June alone, a 189% increase from the Rs 707 crore recorded in May. Since October 2024, long-short funds have accumulated Rs 11,568 crore, making up 66% of all SIF inflows.
The migration into long-short strategies is distinctly affluent. The average folio size for hybrid long-short funds stood at Rs 35 lakh in June, compared to just Rs 14.1 lakh for pure equity-oriented SIF strategies. This suggests high-net-worth investors are actively paying for downside protection rather than accepting the full volatility of direct equity exposure.
Equity-oriented SIF strategies still grew, pulling in Rs 1,097 crore during the month, up 68% from May. Since October 2024, these equity strategies have accumulated Rs 4,938 crore, representing 28% of the Rs 17,407 crore in total SIF inflows over the period.
Broader retail resilience
The SIF data mirrors a wider resilience among Indian retail investors. Systematic investment plan (SIP) contributions hit a record Rs 31,781 crore in June, pushing the total number of outstanding SIP accounts past 10.52 crore alongside a sharp improvement in net new registrations. Active equity funds simultaneously absorbed Rs 28,973 crore in net inflows.
Investors also rotated back into safe-haven assets. Gold ETFs recorded net inflows of Rs 3,443 crore in June, a sharp reversal from the Rs 725 crore in net outflows seen in May.
The broader mutual fund industry absorbed approximately Rs 36,000 crore into active equity and hybrid funds during the month. Overall industry AUM climbed to Rs 82.2 lakh crore, supported by the expanding SIP book which now stands at Rs 17.70 lakh crore.
The combination of record SIP flows, a decisive pivot into hedged long-short funds, and renewed gold buying indicates that while appetite for Indian risk assets remains high, market participants are increasingly structuring portfolios to withstand volatility.
