Arudha – Bandhan Mutual Fund

Fund Snapshot

Strategy Overview

Arudha is structured as an interval hybrid long-short strategy with flexible allocation across equity, debt, and derivatives. The framework allows the fund to dynamically adjust exposure within prescribed ranges rather than follow a fixed allocation.

The strategy includes:

• Core exposure to equity and equity-related instruments for return generation
• Allocation to debt and money market instruments for income and stability
• Use of derivative positions, both hedged and unhedged, to manage volatility and enhance returns
• Limited allocation to REITs and InvITs for additional yield and diversification

The presence of both hedged (0–100%) and unhedged short positions (0–25%) indicates an active risk management approach. This allows the portfolio to reduce net market exposure when required, while still maintaining participation in underlying asset classes.

Objective

The stated objective is to generate optimal returns through a combination of equity and debt investments, supplemented by selective derivative exposure.

From a portfolio construction perspective, this translates into:

• Return generation through equity allocation within a broad 25%–75% band
• Income and capital preservation through debt and money market instruments
• Risk-adjusted enhancement using derivatives, including short positions

The absence of a fixed allocation suggests that performance will depend significantly on allocation decisions and market positioning rather than static exposure.

Redemption Details

• The strategy operates under an interval structure
• Redemption is available twice a week: Monday and Thursday
• This structure provides periodic liquidity while allowing the fund to manage portfolio positioning without continuous inflows and outflows

Portfolio Allocation

Portfolio Construction Insights

• Wide allocation bands (25%–75%) indicate a high degree of flexibility, allowing the strategy to shift between growth-oriented and defensive positioning
• Simultaneous use of hedged and unhedged exposures enables adjustment of net market exposure based on market conditions
• Derivative usage (up to 25% unhedged) introduces an additional layer of active risk and return management
• Inclusion of REITs/InvITs provides a yield-oriented component that may support income generation

Overall, the structure is suited to an actively managed approach where asset allocation decisions are a primary driver of returns.

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