SIF Glossary
Complete glossary of SIF terms: NAV, TER, ISID, risk band, long-short, derivatives, gross/net exposure, and more explained clearly.
What you'll learn
Key Takeaway
SIFs blend mutual fund concepts (NAV, TER, Direct/Regular plans) with hedge-fund-style terminology (gross exposure, net exposure, long-short, unhedged shorts). Understanding both sets of terms is essential for comparing SIF schemes and interpreting their risk-return profiles.
AMFI
Association of Mutual Funds in India. The industry body that publishes daily NAV data for all SIF schemes. AMFI maintains the authoritative NAV database and provides standardised fund classification data used across the industry.
Benchmark
A reference index against which a SIF's performance is measured. Most equity SIFs use Nifty 50 or Nifty 500 as their benchmark. Comparing a fund's returns to its benchmark helps investors assess whether the fund manager is adding value over a passive alternative.
Derivatives
Financial instruments (futures, options) whose value is derived from an underlying asset. SIFs can use derivatives for both hedging and alpha generation, unlike mutual funds which can only use them for hedging. This expanded mandate is one of the key structural advantages of the SIF framework.
Direct Plan
A plan variant where the investor invests directly with the AMC without a distributor. Direct Plans have a lower TER than Regular Plans because they exclude the distribution commission. For the same underlying portfolio, the Direct Plan will always generate higher net returns over time.
Gross Exposure
The sum of long positions plus short positions as a percentage of NAV. SEBI defines gross exposure limits per SIF category, typically up to 200%. For example, a fund with 130% long and 50% short has 180% gross exposure.
Hedging
Using derivatives to offset potential losses in an existing position. Mutual funds can only use derivatives for hedging; SIFs can use them for alpha generation too. Hedging reduces portfolio risk but also limits upside potential on the hedged position.
ISID
Investment Strategy Information Document. The SIF equivalent of a mutual fund's Scheme Information Document (SID). It details the strategy, risk factors, fee structure, and investment mandate. Investors should review the ISID before investing in any SIF scheme.
KIM
Key Information Memorandum. A summary document with essential fund information for investors, including investment objective, risk factors, and fee structure. KIMs are shorter and more accessible than the full ISID, designed for quick reference.
Long Position
Buying a security expecting its price to rise. This is the standard investment approach for all investment vehicles. In a SIF context, long positions form the core of the portfolio and are complemented by short positions in long-short strategies.
Long-Short Strategy
An investment approach that takes both long (buy) and short (sell) positions to profit from both rising and falling prices. SIFs are the first SEBI-regulated pooled vehicle at the ₹10 lakh level that can employ long-short strategies. This allows fund managers to express negative views on specific securities or sectors.
NAV
Net Asset Value. The per-unit value of a SIF scheme, calculated and published daily by AMFI. NAV is computed as (total assets minus total liabilities) divided by the number of outstanding units. All SIF purchases and redemptions are executed at the applicable NAV.
Net Exposure
Long positions minus short positions as a percentage of NAV. SEBI defines net exposure ranges per category — for example, 0–100% for equity long-short. A fund with 130% long and 50% short has 80% net exposure, indicating its effective directional market bet.
NFO
New Fund Offer. The initial subscription period when a new SIF scheme is launched. During the NFO period, units are typically offered at a face value of ₹10. After the NFO closes, the scheme opens for ongoing subscription and redemption at NAV.
PAN-Level Minimum
The ₹10 lakh SIF minimum is tracked at the PAN (Permanent Account Number) level per AMC, not per scheme. This means an investor can spread the minimum across multiple SIF schemes of the same AMC. Once the minimum is met, additional investments and SIPs are permitted.
Regular Plan
A plan variant where investment is made through a distributor. Has higher TER than Direct Plan due to the distribution commission embedded in the expense ratio. The portfolio and fund manager are identical to the Direct Plan; only the fee structure differs.
Risk Band
A monthly disclosure by SIF schemes rating risk on a 1–5 scale (1 = low, 5 = high). Mandated by SEBI, this is more granular than the mutual fund riskometer. The risk band reflects the actual portfolio risk based on current holdings, not just the scheme's stated mandate.
SAI
Scheme Additional Information. A supplementary document with additional details about a fund, including the AMC's background, trustees, and regulatory disclosures. The SAI complements the ISID and is filed with SEBI.
SEBI
Securities and Exchange Board of India. The regulator that created the SIF framework through its February 2025 circular. SEBI oversees all aspects of SIF regulation including category definitions, exposure limits, disclosure requirements, and investor protection norms.
Short Position
Selling a security (via derivatives) expecting its price to fall. SIFs can take unhedged short positions up to 25% of NAV. This is a key differentiator from mutual funds, which cannot hold unhedged short positions.
SIF
Specialised Investment Fund. A SEBI-regulated pooled investment vehicle launched in 2025 with a ₹10 lakh minimum investment. Managed by mutual fund AMCs, SIFs offer long-short strategies and derivatives-based alpha generation within a regulated, NAV-based structure.
TER
Total Expense Ratio. The annual fee charged by the fund, capped under SEBI mutual fund regulations. TER includes the management fee, additional expenses, and GST. Lower TER directly improves investor returns — Direct Plans always have lower TER than Regular Plans.
Unhedged Short
A short position that is not offset by a corresponding long position. SIFs can hold up to 25% unhedged short exposure as a percentage of NAV. Unhedged shorts represent a directional bet that a security or index will decline in value.
22 terms total
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This content is for educational purposes only and does not constitute investment advice. Regulatory frameworks may change. Always verify with official SEBI circulars and consult a qualified financial advisor before investing. Last updated: March 2026.