Specialized Investment Funds
Specialized Investment Funds (SIF), explained before you invest
A newer category from SEBI, run by mutual fund houses under separate brands, for investors putting in at least Rs 10 lakh. Its strategies can take limited short positions, which a mutual fund cannot, and they carry more risk because of it.
How a SIF differs from a mutual fund
A separate category
SIFs are regulated under SEBI's mutual fund regulations, but each one carries its own brand, logo and website, kept apart from the fund house's mutual funds. SEBI requires that separation so the two are not confused.
A Rs 10 lakh minimum
Counted per investor across all the strategies of one SIF, at PAN level. Accredited investors are exempt. A SIP is possible only within that minimum, not as a way around it.
Limited short positions
A strategy may take unhedged short exposure through exchange traded derivatives of up to 25% of its net assets. That can soften a fall if the view is right, and add to losses if it is wrong.
Liquidity varies
Redemptions can be at most daily for equity strategies, at most twice a week for hybrid and at most weekly for debt, and a fund house may allow them less often and add a notice period. Check this before you invest, not after.
A five level risk-band
Each strategy carries a risk-band from level 1, the lowest, to level 5, the highest, in place of a mutual fund's riskometer. The fund house reviews it every month.
The strategies SEBI permits
SEBI allows seven categories of investment strategy under a SIF. The descriptions below are SEBI's.
Equity
- Equity Long-Short: at least 80% in equity, with unhedged short exposure of up to 25%.
- Equity Ex-Top 100 Long-Short: at least 65% in equity outside the top 100 stocks by market capitalisation, with short exposure of up to 25% in stocks other than large caps.
- Sector Rotation Long-Short: at least 80% in equity of at most four sectors, with short exposure of up to 25% taken at sector level.
Debt
- Debt Long-Short: debt across durations, including unhedged short exposure through exchange traded debt derivatives.
- Sectoral Debt Long-Short: debt of at least two sectors, at most 75% in any one, with short exposure of up to 25% taken at sector level.
Hybrid
- Active Asset Allocator Long-Short: moves across equity, debt, their derivatives, REITs, InvITs and commodity derivatives, with short exposure of up to 25%.
- Hybrid Long-Short: at least 25% in equity and 25% in debt, with short exposure of up to 25%.
How we work on a SIF
- Whether a SIF fits at allFor most people it does not. We start from what the money is for, how long it can stay put, and whether Rs 10 lakh is a sensible part of what you have.
- Read the strategy documents togetherThe Investment Strategy Information Document sets out the strategy, the short exposure it may take, the redemption frequency, any notice period and the current risk-band. We go through it with you.
- Choose and set upStrategies from the fund houses we are empanelled with. We handle the forms and KYC, and your money goes directly to the fund house.
- ReviewTogether, every one to three months, alongside the rest of your holdings.
Before you invest, ask yourself
Is Rs 10 lakh a small part of what you have?
If losing a meaningful part of it would change your plans, a SIF is probably the wrong place for it.
Can the money stay put?
Redemptions may be weekly or less frequent, with notice. Money you might need at short notice belongs somewhere more liquid.
Do you understand the short positions?
A strategy that can bet against stocks or bonds can lose money in a rising market. If that is unclear, ask us before you invest.
What if the value drops below Rs 10 lakh?
You may then only redeem everything that is left, not part of it. It is worth knowing that before you start.
How we are paid on a SIF
From you
No separate fee
You pay us no fee directly for a SIF investment made through us.
From the fund house
Commission
The fund house pays us commission on SIF investments made through us. Ask, and we will tell you what it is before you invest.
Questions people ask about SIFs
What is a Specialized Investment Fund (SIF)?
A category SEBI introduced from April 2025, run by mutual fund houses under a separate brand. It sits between mutual funds and portfolio management services: its strategies can do some things a mutual fund cannot, such as take a limited short position through derivatives, and they carry more risk because of it.
What is the minimum investment in a SIF?
Rs 10 lakh per investor, counted across all the investment strategies of one SIF at PAN level. Your ordinary mutual fund holdings with the same fund house do not count towards it. Accredited investors are exempt from the minimum.
Is a SIF the same as a mutual fund?
No. SIFs are regulated under SEBI's mutual fund regulations, but SEBI requires each one to carry its own brand, logo and website, separate from the fund house's mutual funds, so that the two are not confused. The risk, the minimum and the liquidity are all different.
Can I start a SIP in a SIF?
A fund house may offer SIPs, SWPs and STPs in a SIF, but only within the Rs 10 lakh minimum. A SIP is not a way to start a SIF with a small amount.
What happens if my investment falls below Rs 10 lakh?
If it falls below the minimum only because the value dropped, that is not a breach. But you may then only redeem the whole of your remaining SIF investment, not part of it. You cannot redeem part of your holding if that would take it below the minimum.
Who is allowed to distribute SIFs?
A mutual fund distributor who holds the certification SEBI requires and has registered separately with AMFI as a SIF distributor. You can check any distributor's registration on AMFI's distributor search. Ours is ARN-332819.
Ask us about a SIF
Tell us what you are considering. We will tell you plainly whether a SIF suits it, and if it does, what the strategy documents say.