As per the ValueMetrics–AMFI Mutual Fund & SIF Flow Meter (February 2026 update), hybrid long–short funds held ₹5,485 crore of the total ₹6,564 crore SIF assets under management (AUM) as of 31 January 2026, giving them 84% share of the specialised investment category.
In comparison, equity-oriented long–short strategies accounted for only ₹1,079 crore, or 16% of total SIF AUM.
The report, which draws on data from the Association of Mutual Funds in India (AMFI) and internal analysis by ValueMetrics Technologies, indicates that the dominance of hybrids is not just a legacy effect but is being reinforced by recent money flows.
Inflows heavily tilted toward hybrids
Between October 2024 and January 2026, SIFs received cumulative net inflows of ₹6,569 crore. Of this, hybrid long–short funds attracted ₹5,456 crore — about 83% of total inflows, while equity-oriented strategies received ₹1,112 crore, the report shows.
Even in the most recent month, January 2026, hybrid SIFs continued to lead with ₹1,637 crore in net inflows, whereas one of the equity long–short categories recorded outflows during the same period.
What this shift suggests
Market participants say the growing preference for hybrid long–short strategies reflects a demand for built-in risk management rather than purely directional equity bets.
Hybrid long–short funds typically combine equity exposure with hedging tools such as futures and options, allowing fund managers to participate in market gains while attempting to limit downside risk during periods of volatility.
By contrast, equity long–short funds rely more directly on stock selection and relative bets between outperformers and underperformers, which can be more sensitive to sharp market swings.
Still a niche within the broader industry
Despite their rising prominence within the SIF space, specialised investment funds remain a very small part of India’s overall mutual fund landscape.
The broader mutual fund industry reached around ₹82 trillion in total AUM by January 2026, according to the same ValueMetrics–AMFI data, meaning that SIFs account for only a tiny fraction of household and institutional investments in mutual funds.
Why it matters
The data highlights a structural tilt toward strategies that blend assets and use hedging tools rather than taking concentrated equity positions.
It suggests that investor behaviour in specialised products is being shaped more by risk considerations than by aggressive return chasing.
The trend aligns with broader inflow patterns seen in mainstream hybrid categories such as balanced advantage and multi-asset funds.
Unless market conditions change significantly, hybrid strategies are likely to remain the largest component of India’s specialised investment fund universe in the near term, the report indicates.
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First Published: Feb 11, 2026 9:27 AM IST