SIF: What is it?

What is SIF (Specialised Investment Fund)?

Specialised Investment Funds (SIFs) are a new investment category introduced by SEBI in India to sit between mutual funds and PMS/AIFs. They allow fund managers to use more advanced strategies such as derivatives, long–short equity, and tactical asset allocation—while still operating under a regulated framework similar to mutual funds.

Simply put, SIFs aim to give sophisticated investors access to flexible strategies without moving to less regulated, high-ticket products.

How SIFs Stand Out

• Advanced investment strategies: Unlike regular mutual funds, SIFs can take long and short positions and use derivatives more actively.
• Higher flexibility: Fund managers have more freedom in portfolio construction.
• Regulated structure: Launched under SEBI guidelines, offering better transparency than PMS/AIFs.
• Mutual fund–like taxation: More tax-efficient compared to alternative investment funds.
• Clear positioning: Designed for investors who have outgrown traditional mutual funds but are not ready for AIFs.

Who Are SIFs Meant For?

• High Net Worth Individuals (HNIs)
• Experienced retail investors with a higher risk appetite
• Professionals seeking tactical or hedge-style exposure
• Investors looking for diversification beyond equity and debt funds

They are not suitable for conservative investors or first-time market participants.

Minimum Investment & Expense Ratio

• Minimum investment: ₹10 lakh per AMC (across SIF strategies).
• Expense ratio (TER): Typically higher than that of mutual funds due to active management.
  • Indicative range: ~1% to 2.5%+ annually, depending on strategy and fund house.

SIFs Available in India

SIFs are still in an early phase, with limited launches so far. Some notable SIFs include:

• Magnum SIF – SBI Mutual Fund
• Altiva SIF – Edelweiss Mutual Fund
• Diviniti SIF – ITI Mutual Fund
• Endurance SIF – DSP Mutual Fund
• Arudha Hybrid Long–Short SIF – Bandhan Mutual Fund

Most offerings currently focus on hybrid and long–short strategies.

Performance Since Launch

• SIFs are too new for long-term performance evaluation.
• Early investor interest has been strong, with several thousand crore rupees in AUM within months of launch (2025).
• Returns vary significantly by strategy, and there is no common benchmark yet.

Bottom Line

SIFs are an emerging option for sophisticated investors who want flexibility, advanced strategies, and regulated structures, while accepting higher costs and risks. They should be evaluated carefully, with a clear understanding of strategy and suitability.