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In recent years, the (PMS) industry has witnessed remarkable growth. As of September, it has assets worth nearly ₹40 lakh crore (AUM) under management, catering primarily to HNIs and Ultra HNIs with a minimum investment of ₹50 lakh.
In contrast, mutual funds allow investors to start small while offering broad diversification within a single asset class.
But what if one wants the professional expertise of PMS, the structure of mutual funds, but at a smaller ticket size?
That's exactly why SEBI introduced the "Specialized Investment Fund (SIF)" in February 2025.
In this blog, we have simplified what SIF investment is, how it works, how it differs from mutual funds and PMS, and who can truly benefit from it.
Also, keep reading to find answers to most of your SIF-related doubts at the end!
SIF, or a Specialized Investment Fund, is an upgraded version of a mutual fund, but with the touch of PMS (Portfolio Management Services). It's designed primarily for investors with ₹10 lakhs or more and those who seek greater flexibility in managing their portfolios.
Think of it as a smart blend of both worlds, providing the diversification of mutual funds and the flexibility of PMS.
With SIFs, fund managers can mix and match strategies while maintaining the portfolio's NAV. They may take long or short positions, shift asset allocations, or rotate between different sectors, all to capitalize on changing market conditions.
SIFs may sound similar to mutual funds, but they operate with a slightly different mechanism. Let's learn how!
The first step is to have an SIF investment fund in place. And that's where the Asset Management Company (AMC) establishes it in accordance with SEBI guidelines. However, it must have specific investment objectives with a defined strategy to act as an SIF.
At this stage, the fund manager may also decide on which assets to invest in. For instance, equity, debt, or hybrid strategies are the main categories, followed by sub-types.
Unlike mutual funds, SIFs are open only to high-net-worth and accredited investors who meet SEBI's minimum investment requirement (at least ₹10 lakh).
After receiving sufficient capital, the AMC pools the funds and allocates them across various asset classes. Depending on the fund's strategy, the fund manager may invest in equities, debt instruments, derivatives, REITs, InvITs, or commodities.
In return, investors receive units (similar to mutual funds) in the SIF.
With the flexibility feature of PMS, fund managers manage the client's funds and adjust the portfolio as needed.
Additionally, they can adopt dynamic investment approaches (taking long or short positions, adjusting asset allocations, or rotating sectors based on market trends) to balance the overall SIF portfolio.
Investors may receive periodic reports on the fund's performance over time, including portfolio details, returns, and updates on any changes to the investment strategy.
Plus, it is also necessary for SEBI's transparency and disclosure norms to ensure accountability and investor protection.
Each AMC sets its own redemption policy aligned with SEBI's guidelines. For example, SIF Fund A might allow daily redemption. At the same time, Fund B may offer weekly, quarterly, or fixed withdrawal options (via SWP).
Moreover, the AMC may offer facilities such as SIP (Systematic Investment Plan), SWP (Systematic Withdrawal Plan), and STP (Systematic Transfer Plan) only when the ₹10 lakh minimum investment threshold is met. If an investor wishes to redeem early, a 15-day prior notice is a must to the AMC.
Based on the fund's objectives, there are three major categories of SIF funds: Equity, Debt, and Hybrid.
| SIF Fund | Sub-Category | Fund Characteristics |
|---|---|---|
|
Equity SIF Fund (open-ended or interval fund – Redemption is either Daily or as decided by AMC) |
1. Equity Long Short Fund |
|
| 2. Equity Ex Top 100 Long Short Fund |
|
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| 3. Sector Rotation Long Short Fund |
|
|
|
Debt SIF Fund (Interval fund with weekly redemption frequency or as decided by AMC) |
1. Debt Long Short Fund |
|
| 2. Sectoral Debt Long Short Fund |
|
|
|
Hybrid SIF Fund (Interval fund with redeeming power twice a week or more frequently, as per AMC’s decision) |
1. Active Asset Allocator Long Short Fund |
|
| 2. Hybrid Long Short Fund |
|
SIF was introduced to bridge the gap between Mutual Funds and Portfolio Management Services (PMS). While mutual funds allow small-ticket investments, PMS caters to high-net-worth investors (with a minimum ticket size of ₹50 lakhs), and many investors sought a middle ground.
SIF offers that balance, giving investors with a minimum ₹10 lakh corpus access to PMS-like strategies but with a mutual fund structure
In short, the key difference lies in the investment entry point:
Technically, Specialized Investment Funds were proposed to meet the investing demands of sophisticated investors. However, SIF Funds are best suited for investors who:
Even with the ease of investment offered by SIFs, there are a few important points to keep in mind as a first-time investor:
Specialized Investment Fund has gained immense popularity since its launch in April 2025. Many AMCs have also launched their respective SIFs and stepped into this new journey of growth. However, it is equally important to look at its pros and cons.
While this financial product is new in the market, understanding the basic definition and fund strategy is crucial to evaluating the risk-return ratio. It is then possible to make informed investment decisions and fulfill your financial goals.
SIF is an investment product, while SIP is a payment method for mutual funds. They serve different purposes. SIF offers PMS-like strategies, and SIP helps build wealth through regular investments.
Yes. Individuals and institutional investors can invest in SIFs, subject to the minimum investment amount and eligibility criteria they meet.
Yes. SIFs are regulated and approved by SEBI under the Alternative Investment Fund (AIF) framework.
Not necessarily better, they both have their own distinct characteristics. SIFs offer advanced strategies and higher flexibility but come with higher risk and minimum investment (₹10 lakh) compared to mutual funds.
Only SEBI-registered intermediaries or distributors authorized by the fund house can sell SIF units.
It depends on the fund's structure. Some allow daily or weekly redemptions, while others may have fixed or periodic redemption windows.
Yes, some SIFs may or may not charge an exit load depending on the redemption period. If redeemed within 15 or 30 days, an exit load of 0.5% to 0.25% is applicable. This varies from fund to fund. And if you wish to redeem early, a 15-day prior notice must be given to the respective AMC.
SIFs are actively managed, using dynamic strategies like long-short, sector rotation, or asset allocation to generate returns.
Yes, most SIFs can be accessed through your existing Demat or trading account, depending on your broker's platform support.
Disclaimer:The information provided in this article is for educational and informational purposes only. Any financial figures, calculations, or projections shared are solely intended to illustrate concepts and should not be construed as investment advice. All scenarios mentioned are hypothetical and are used only for explanatory purposes. The content is based on information obtained from credible and publicly available sources. We do not guarantee the completeness, accuracy, or reliability of the data presented. Any references to the performance of indices, stocks, or financial products are purely illustrative and do not represent actual or future results. Actual investor experience may vary. Investors are advised to carefully read the scheme/product offering information document before making any decisions. Readers are advised to consult with a certified financial advisor before making any investment decisions. Neither the author nor the publishing entity shall be held responsible for any loss or liability arising from the use of this information.”
