Specialised Investment Funds
Empower Your Financial Future, Optimise your Investment with specialised investment funds.
What is a Specialized Investment Fund (SIF)?
Specialized Investment Funds (SIFs) were introduced by SEBI from 1 April 2025 to bridge the gap between mutual funds and higher-ticket investment products. While mutual funds cater to small-ticket investors, PMS require at least ₹50 lakh and Alternative Investment Funds start at ₹1 crore. Investors in between had limited regulated options. SIFs are offered by SEBI-registered Asset Management Companies under a mutual fund trust, but they operate as a separate category with their own investment framework and risk profile.
Benefits of SIFs
The growing interest in SIFs stems from their ability to provide investors with more flexible investment strategies within a regulated framework.
Advanced Strategies
Fund managers can go long and short, using derivatives to hedge or profit from falling markets — up to 25% of net assets. Sector rotation adds high-conviction, actively rebalanced positions unavailable in a standard mutual fund.
Accessible Entry Point
SIFs open sophisticated, hedge-fund-like strategies at ₹10 lakh, per PAN per AMC — well below the ₹50 lakh needed for PMS or ₹1 crore for AIFs. A regulated middle ground built for a wider set of investors.
Wider Diversification
SIFs carry a broader mandate than conventional mutual funds, with room to invest and rebalance across a wider mix of asset types — extending beyond typical equity and debt limits.
SEBI Oversight & Transparency
Unlike lightly regulated private funds, SIFs sit within SEBI's mutual fund framework — offered only by established, SEBI-registered AMCs, with standardised risk disclosures and mandatory reporting built in.
Investment Vehicle Breakdown
| Product | Minimum Investment | Strategy Flexibility |
|---|---|---|
| Mutual fund | From ₹100 | Tightly defined by category rules |
| SIF | ₹10 lakh | Long-short strategies within SEBI limits |
| PMS | ₹50 lakh | Discretionary, individual portfolio |
| AIF | ₹1 crore | Widest, including unlisted and private assets |
What you should know before investing
Before investing in a Specialized Investment Fund (SIF), it’s important to understand its investment threshold, strategies, taxation, and risks. Here’s what every investor should know.
₹10 Lakh Minimum Investment
A Specialized Investment Fund (SIF) requires a minimum investment of ₹10 lakh.
- Applies across all strategies of a single SIF.
- Calculated at the PAN level.
- The limit is not ₹10 lakh per strategy.
How the Threshold Works
The investment requirement applies only to SIF investments.
- Regular mutual fund investments are not included.
- Accredited investors follow separate eligibility norms.
- If the value falls below ₹10 lakh due to market movements, only full redemption is allowed.
SEBI-Permitted Strategies
SEBI currently permits seven strategies across three categories.
- Equity: 3 Long-Short strategies
- Debt: 2 Long-Short strategies
- Hybrid: 2 Long-Short strategies
Each AMC can launch one fund per strategy category.
What is a Long-Short Strategy?
Long-short investing is what differentiates SIFs from traditional mutual funds.
- Managers can take long and limited short positions.
- Short exposure is taken through derivatives.
- Unhedged short exposure is capped at 25% of net assets.
How SIFs Are Taxed
SIF taxation depends on the underlying portfolio.
- Equity-oriented: LTCG 12.5%, STCG 20%.
- Debt-oriented: Taxed as per the investor’s income tax slab.
- Tax is payable only by the investor, not at the fund level.
Key Risks to Understand
SIFs have a different risk profile from conventional mutual funds.
- Derivative and strategy risk.
- Liquidity may vary by strategy.
- Limited performance history.
- Passive breach rules may restrict partial redemption.
SIFs are a different investment category—not a replacement for traditional mutual funds.
Is a SIF Right for You? Here's Who It Suits — and Who It Doesn't
Not every investor is the right fit for a SIF. Use this to check whether it aligns with your investing strategy.
- You already hold a diversified core portfolio and are considering an allocation beyond it.
- You can commit at least ₹10 lakh without needing partial access to it.
- You understand what short exposure through derivatives means in practice.
- You are able to sit through a period of underperformance without exiting.
- This would represent the majority of your investable assets.
- The money is earmarked for a goal within the next three to five years.
- You may need to withdraw a portion of the capital at short notice.
- You are still building a core allocation through mutual funds and SIPs.
Still unsure whether a SIF fits your portfolio? That’s exactly the conversation we’re here to have with you. Get in touch with our team, and we’ll help you assess it
Frequently Asked Questions
₹10 lakh, aggregated across all strategies of a single SIF at PAN level. A lower threshold applies to accredited investors.
No. A SIF is launched by an AMC under a mutual fund trust, but it is a separate category with its own brand identity, wider strategy flexibility including short exposure, and a different risk profile.
As a mutual fund, based on the underlying allocation: 12.5% LTCG / 20% STCG for equity-oriented strategies; slab rate for debt-oriented. No fund-level tax. Subject to change.
If the fall is caused by market movement, partial redemption is not permitted — the only option is to redeem the entire holding.
No. A distributor must hold the additional SEBI certification for the category and be registered to distribute it.