What is a Specialised Investment Fund (SIF)?
A SIF is a SEBI-regulated pooled investment vehicle launched in India in February 2025. Managed by mutual fund AMCs, SIFs require a minimum ₹10 lakh investment and offer 7 distinct strategy categories.
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Key Takeaway
A Specialised Investment Fund (SIF) is a SEBI-regulated pooled investment vehicle launched in India in 2025. It requires a minimum ₹10 lakh investment, allows long-short strategies and derivatives for alpha generation, and is managed by existing mutual fund AMCs. SIFs sit between mutual funds (no minimum) and PMS (₹50 lakh minimum) in terms of both cost and strategy flexibility.
Definition
A Specialised Investment Fund (SIF) is a SEBI-regulated investment vehicle introduced in February 2025. SIFs are managed by existing mutual fund AMCs and operate as pooled, NAV-based structures similar to mutual funds, but with expanded strategy mandates that allow long-short positioning and derivatives usage for alpha generation. They sit between traditional mutual funds and Portfolio Management Services (PMS) in terms of both minimum investment and strategy flexibility.
SEBI Circular and Regulatory Context
SEBI introduced the SIF framework via its circular in February 2025 to address a structural gap in India's investment landscape. Prior to SIFs, investors seeking long-short or derivatives-based strategies had two options: PMS (minimum ₹50 lakh) or AIFs (minimum ₹1 crore). The SIF category allows mutual fund AMCs to offer sophisticated strategies at a ₹10 lakh entry point, within the established mutual fund regulatory and compliance infrastructure.
The circular defines operational requirements including daily NAV computation, monthly risk band disclosure, alternate-month portfolio disclosure, and adherence to mutual fund TER (Total Expense Ratio) regulations. AMCs may launch SIFs through either route: 3 years of operation with ₹10,000 crore average AUM, or an alternate CIO-led eligibility route under the framework.
Seven SEBI-Defined Categories
| Category | Equity Allocation | Key Feature |
|---|---|---|
| Equity Long-Short | 65%+ (mandated) | Long-short equity with derivatives for hedging and alpha |
| Equity Ex-Top 100 Long-Short | 65%+ (mandated) | Focuses beyond top 100 stocks by market cap |
| Sector Rotation Long-Short | 65%+ (mandated) | Rotates across sectors using long-short positions |
| Hybrid Long-Short | 25-75% | Flexible equity-debt allocation with long-short capability |
| Active Asset Allocator | Variable | Dynamic allocation across asset classes |
| Debt Long-Short | <35% | Debt-focused with interest rate or credit long-short |
| Sectoral Debt Long-Short | <35% | Sector-specific debt with long-short positions |
Minimum Investment
The minimum investment in SIFs is ₹10 lakh at the PAN level across all SIF schemes within a single AMC. This means an investor must maintain at least ₹10 lakh aggregate investment across all SIF schemes of a given AMC. Accredited investors (as defined by SEBI) may be subject to different thresholds. Top-up investments and SIP contributions are permitted after the minimum is met.
Key Features
- Pooled, NAV-based structure: Like mutual funds, investor money is pooled. Units are issued at NAV. No individual portfolio accounts.
- Long-short capability: Up to 25% unhedged short derivative positions allowed, enabling hedging and alpha strategies unavailable in mutual funds.
- Derivatives for alpha: Unlike mutual funds (derivatives for hedging only), SIFs can use derivatives for alpha generation.
- Managed by AMCs: SIFs are managed by SEBI-registered mutual fund AMCs with established compliance and operational infrastructure.
- Regulated TER: Fees follow SEBI's mutual fund TER caps. No performance fees.
- Daily NAV: Published through AMFI, same as mutual funds.
- Monthly risk band: SEBI mandates a 1-5 numerical risk band, disclosed monthly, more granular than the mutual fund riskometer.
How SIFs Differ from Existing Products
SIFs occupy a distinct position in India's investment vehicle spectrum:
- vs. Mutual Funds: SIFs can take short positions and use derivatives for alpha. Mutual funds cannot. SIFs require ₹10 lakh minimum; mutual funds start at ₹100.
- vs. PMS: SIFs are pooled (not individual accounts) and require ₹10 lakh (not ₹50 lakh). PMS allows fully custom portfolios; SIFs do not.
- vs. AIFs: SIFs require ₹10 lakh (not ₹1 crore) and offer daily liquidity (not lock-in). AIFs have broader mandate flexibility.
For a detailed comparison, see SIF vs MF vs PMS vs AIF.
Disclosure Requirements
- Daily NAV: Published through AMFI, same as mutual fund NAVs
- Monthly risk band: A numerical 1-5 risk indicator, updated monthly
- Alternate-month portfolio: Full portfolio holdings disclosed every two months
- Factsheet: Monthly factsheet with strategy commentary, AUM, returns, and portfolio characteristics
- Scheme Information Document (SID): Detailed mandate, strategy description, risk factors, and fee structure
Who Can Invest
Any Indian resident, NRI, or entity that meets the ₹10 lakh minimum investment threshold at the PAN level can invest in SIFs. The investment is made through the AMC or registered distributors, similar to mutual fund purchases. KYC requirements follow standard mutual fund norms. There is no separate accreditation requirement for the standard ₹10 lakh threshold, though SEBI's accredited investor framework may apply for certain provisions.
Regulatory Framework
SIFs are governed under the SEBI (Mutual Funds) Regulations, 1996, with additional provisions specified in the SIF circular. AMCs must meet eligibility criteria including either 3 years of operation with ₹10,000 crore average AUM, or an alternate CIO-led eligibility route. Compliance, custody, valuation, and audit requirements mirror those of mutual funds. SEBI retains oversight through its existing mutual fund regulatory infrastructure.
Knowledge Check
1. What is the minimum investment required for SIFs?
2. How many SIF categories has SEBI defined?
3. What is the maximum unhedged short position allowed in a SIF?
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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.