Specialised Investment Funds (SIFs) are SEBI’s latest innovation in the Indian investment landscape, effective April 1, 2025. They aim to bridge the gap between traditional mutual funds and Portfolio Management Services (PMS) by offering greater strategy flexibility while retaining the benefits of mutual funds regulatory transparency.
Framework of SIFs
- Regulatory Base: Introduced via amendments to the SEBI (Mutual Funds) Regulations, 1996.
- Who Can Launch: Only SEBI‑registered mutual funds meeting eligibility norms (track record or experienced CIO/FM).
- Minimum Investment: ₹10 lakh per investor (across all SIF strategies in an AMC at PAN level).
- Structure: Can be open‑ended, close‑ended, or interval strategies with flexible subscription/redemption frequencies.
- Strategy Scope:
- Long‑short equity (can take up to 25% unhedged short positions via derivatives)
- Sector‑focused or thematic strategies
- Multi‑asset allocation (equity, debt, REITs/InvITs, commodities)
- Long‑short debt strategies
- Disclosure Norms: Must publish an Investment Strategy Information Document (ISID) detailing objectives, risk parameters, benchmarks, liquidity, and scenario analysis.
Risk Profile of SIFs
SIFs are higher‑risk, higher‑return products compared to regular mutual funds, due to their ability to use derivatives, short selling, and concentrated sector bets.
| Risk Factor | Why It Matters |
|---|---|
| Market Volatility | Strategies like long‑short can amplify both gains and losses. |
| Derivatives Exposure | Up to 25% unhedged short positions can magnify downside risk. |
| Liquidity Risk | Some SIFs may have weekly/monthly redemptions instead of daily. |
| Complexity | Requires understanding of advanced strategies and market cycles. |
| Concentration Risk | Sector/thematic SIFs may be heavily exposed to a few industries for**: Investors. |
💡 **Best suited for investors who can handle volatility, understand derivatives, and have surplus capital that is not earmarked for essential life goals.
Target Customers
SIFs are not for every investor. SEBI’s ₹10 lakh minimum ensures they cater to:
- HNIs & Affluent Retail Investors – Seeking advanced strategies without committing ₹50 lakh+ to PMS.
- Family Offices & Institutions – For diversification into niche or market‑neutral strategies.
- Sophisticated Retail via Intermediaries – Possibleund‑of‑fund structures through feeder/f in the future.
They are not ideal for:
- First‑time investors
- Those investing for essential goals like retirement or education
- Investors uncomfortable with short‑term volatility
Fund Houses Offering SIFs
Several leading AMCs have already launched or filed for SIFs:
| Fund House | Example SIF Strategy |
|---|---|
| Quant Mutual Fund | Long‑short equity SIF |
| ICICI Prudential AMC | Dynamic hedging long‑short equity SIF |
| SBI Funds & Quant Capital (partnership) | Thematic SIFs in renewable energy & emerging tech |
| ITI Asset Management | Multi‑strategy “Diviniti SIF” platform |
| Edelweiss AMC | Sector‑focused and hybrid long‑short SIFs |
Key Takeaways
- SIFs = Mutual Fund transparency + PMS‑style flexibility.
- Designed for informed, well‑capitalised investors.
- Offer access to strategies like long‑short equity, sector rotation, and multi‑asset allocation.
- Carry higher risk than traditional mutual funds — require active monitoring and understanding.