Jio BlackRock Launches Prism Hybrid Long-Short Fund: Blending Derivatives and Fixed Income to Capture Niche Market Alpha

Jio BlackRock Launches Prism Hybrid Long-Short Fund: Blending Derivatives and Fixed Income to Capture Niche Market Alpha​

Jio BlackRock Asset Management has unveiled its maiden Specialised Investment Fund (SIF), the Prism Hybrid Long-Short Fund. This launch signifies a strategic move by the asset manager to expand its product suite and capitalize on the growing investor appetite for sophisticated alternative investment strategies in India.

The fund is scheduled to open for subscription from June 29 to July 13. It offers investors exposure to a blend of equities, fixed income instruments, and various derivative-based techniques. The minimum investment required for this SIF is set at Rs 10 lakh, with the fund offering twice-weekly redemptions.

Deconstructing the Multi-Strategy Approach​

Chief Investment Officer Rishi Kohli stated that the Prism Hybrid Long-Short Fund employs a multi-strategy approach designed to perform differently across various market cycles. The portfolio strategically invests through covered call strategies, merger arbitrage, REITs (Real Estate Investment Trusts), and InvITs (Infrastructure Investment Trusts).

The fund targets annual returns within the 9-11% range, which is positioned approximately three percentage points above typical arbitrage returns, while maintaining lower volatility compared to conventional equity funds. Kohli emphasized that the objective is not to rely on a single strategy for generating profits.

A key operational feature of the SIF is its commitment to risk management. The portfolio will maintain a fully hedged equity exposure; specifically, the fund has zero open market exposure in its equity portion. Proprietary quantitative models will guide the option strike prices for the covered call strategies based on stock momentum and volatility.

Strategic Focus: Hedging and Diversification​

The fund’s structure ensures robust diversification across assets. Alongside derivatives and fixed income, it mandates investment in listed REITs and InvITs. Furthermore, the debt portfolio is grounded in duration management rather than credit risk.

A significant component of the strategy involves fixed-income securities, with a minimum of 25% of the fund's assets allocated to AAA-rated fixed-income investments. This combination of strategies aims to deliver consistently risk-adjusted returns regardless of prevailing market conditions.

Expanding Jio BlackRock’s Digital and Product Footprint​

The introduction of the SIF also marks a transition for Jio BlackRock, which has previously operated as a digital-first asset manager since its launch last year. The move into distributor-led sales is part of this expansion strategy.

Managing Director and CEO Sid Swaminathan noted that the response from institutional and mutual fund distributors has been encouraging, despite the SIF category being relatively new to the market. He confirmed that the high interest observed across multiple roadshows validates the firm's capabilities.

Swaminathan highlighted that a core value proposition of Jio BlackRock is providing investors with a distinct lens through which to view investing. The company aims to bring BlackRock's global expertise into India, enabling a different way of engaging with diverse markets.

Beyond the SIF: Future Expansion Plans​

Jio BlackRock plans continued growth through expansion beyond the SIF product line. Subject to regulatory approvals, the firm intends to launch products via GIFT City.

These future offerings include outbound feeder funds that will invest in select global strategies developed by BlackRock. The company is also developing inbound products designed specifically to attract overseas investors into the Indian market.