What if you want more than a mutual fund, but PMS doesn’t quite fit—either in structure, scale, or approach?
As India’s investment framework continues to mature, Specialised Investment Funds (SIFs) emerges as a compelling solution for investors looking to move beyond conventional mutual fund investments. Introduced by the Securities and Exchange Board of India (SEBI) with effect from April 1, 2025, SIFs are intended to bridge the gap between standardised mutual fund products and customised solutions such as Portfolio Management Services (PMS).
In this article, we delve deeper into the SIF framework—understanding its regulatory framework, key features, permissible investment strategies, where it fits within a sophisticated investor’s portfolio and how it is different from existing investment avenues.
What Exactly Are SIFs?
Who Can Launch and Invest in SIFs?
To launch a SIF, mutual fund houses must demonstrate credibility and capability:
- Track record route: Minimum three years of operations and average Assets Under Management (AUM) of ₹10,000 crore.
- Alternate route: Appointment of a seasoned Chief Investment Officer (CIO) with at least 10 years of experience managing ₹5,000 crore AUM and an additional experienced fund manager
- Clean track record: No regulatory action should have been initiated or taken against the AMC under Sections 11, 11B, and/or 24 of the SEBI Act during the preceding three years.
- These benchmarks ensure that SIF offerings are backed by institutional strength and seasoned leadership.
Investor Eligibility
On the investor side, SIFs are not mass-market products. They require a minimum investment of ₹10 lakh per investor (at PAN level) across all SIF strategies with a single AMC — although accredited investors may be exempt from this threshold. This positions SIFs between retail mutual funds and bespoke investment solutions, targeting financially savvy individuals, high-net-worth investors, and institutional participants.
Does a ₹10 lakh minimum make this feel more serious, or just more exclusive to you? Let us know your views in the comments.
Key Features That Set SIFs Apart
1. Strategy-Focused and Flexible
SIF schemes are anchored to a single investment strategy, whether equity-centric, debt-oriented, or hybrid. This laser focus allows fund managers to implement long-short positions, sector rotation, and active asset rebalancing, enabling them to express nuanced market views.<br/>
2. Enhanced Asset and In
Does a ₹10 lakh minimum make this feel more serious, or just more exclusive to you? Let us know your views in the comments. strument Access Under the SIF framework, funds can invest beyond traditional stocks and bonds — including derivatives, commodities, REITs/InvITs, and hybrid baskets — subject to permissible exposure limits and risk protocols.
3. Structured Transparency via ISID
SEBI now mandates a standardized Investment Strategy Information Document (ISID), where AMCs must disclose asset allocation tables, performance history, top holdings, risk band classification, redemption frequencies, and benchmark information. This is designed to equip investors with robust, comparable insights before they commit capital.
4. Liquidity and Redemption Norms
Unlike ordinary open-ended funds with daily liquidity, SIFs may feature interval structures, varied redemption windows, or notice periods, depending on the strategy design and underlying asset liquidity.
Comparing SIFs with Traditional Investment Avenues
| Feature | SIFs | Mutual Funds | PMS | AIFs |
|---|---|---|---|---|
| Investor Access | ₹ 10 lakhs | ₹ 100 | ₹ 50 lakhs | HNIs / Institutions |
| Strategy Flexibility | High | Moderate | Very High | Very High |
| Regulatory Oversight | SEBI (Mutual Fund Rules + SIF framework) | SEBI | SEBI (PMS norms) | SEBI (AIF rules) |
| Asset Flexibility | Wide (derivatives, alternatives) | Traditional | Very Wide | Very Wide |
| Liquidity | Variable | Daily | Variable | Variable |
SIFs offer more sophistication and flexibility than mutual funds, with a lower entry barrier and more structured oversight than many bespoke PMS or AIF strategies — essentially occupying a middle ground in the investment products spectrum.
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Why SIFs Matter for Investors
A Bridge Between Simplicity and Sophistication
SIFs make it easier for investors to access investment approaches that were earlier available only through complex or exclusive products. They allow fund managers to adjust portfolios more actively and take advantage of market opportunities—while still operating within a regulated and transparent structure.
A New Paradigm for Portfolio Diversification
For investors who already have exposure to equity or debt, SIFs can add an extra layer of diversification. They help spread risk by investing across different themes, sectors, or market conditions, rather than relying on a single strategy.
Risk and Reward Dynamics
With greater flexibility and enhanced returns, comes higher complexity and potentially elevated risk SIFs involve more active decision-making and may experience sharper ups and downs compared to traditional funds. Investors should be comfortable with this level of variation and have a clear understanding of how these funds fit into their overall portfolio.
Where do you see SIFs fitting in your own investment journey — alongside mutual funds, or as a step taken later? Do let us know in the comments below.
Conclusion
Specialised Investment Funds represent a meaningful evolution in India’s investment landscape. They combine the transparency of mutual funds with the flexibility of more advanced investment strategies, offering investors a way to go beyond conventional options.
While not suitable for everyone, given the ₹10 lakh entry threshold and the nature of their strategies, SIFs expand the opportunity set for investors ready to embrace a more evolved investment approach.
Given their complexity and potential, consulting an investment advisor can help ensure SIFs are aligned with your goals, risk profile, and overall portfolio strategy.
