The Rise of Specialised Investment Funds: Opportunity Or Over-Segmentation?

Here’s a closer look at the equity strategies:

• Equity Long-Short Funds maintain a minimum 80 per cent allocation to equities, aiming to generate returns in both rising and falling markets by buying promising stocks and shorting overvalued ones.

• Equity Ex-Top 100 Long-Short Funds mandate a minimum 65 per cent allocation to mid-cap and small-cap stocks.

• Sector Rotation Long-Short Funds concentrate capital in up to four sectors, with the manager dynamically rotating weights and shorting entire sectors expected to underperform.

There is one caveat to keep in mind. The short-selling and derivative use by SIFs, while being more flexible than that of mutual funds, is still more restricted than a true hedge-fund-style AIF. Whether that’s an advantage or a disadvantage depends on perspective – it’s a hybrid product that isn’t fully ‘true to label’ on either side.

Hybrid SIFs, meanwhile, are built for low volatility and low-correlation returns, with an emphasis on downside protection.