Summary: A Specialised Investment Fund (SIF) is a new, SEBI-regulated investment product that sits between a regular mutual fund and a Portfolio Management Service (PMS). It allows strategies such as going both long and short, and requires a minimum investment of ₹10 lakh per investor (across all strategies of one fund house, at the PAN level).
What is a Specialised Investment Fund (SIF)?
Until recently, Indian investors had two main choices. Mutual funds are simple, have low minimums and are heavily regulated, but are largely long-only. PMS and AIFs are more flexible, but have minimums of ₹50 lakh and ₹1 crore, which put them out of reach for most people.
SEBI created the Specialised Investment Fund to fill the space between them. It was introduced through an amendment to the SEBI (Mutual Funds) Regulations, 1996 in December 2024, and a detailed operating framework took effect from 1 April 2025. A SIF can only be launched by an established mutual fund house registered with SEBI, and is run by that house’s asset management company. The strategies are more flexible, but they sit under the same mutual fund regulations.
In short, a SIF has more freedom in how the money is managed and a higher minimum investment than a mutual fund, and is still subject to SEBI’s mutual fund supervision and disclosure rules.
How the ₹10 lakh minimum works
- ₹10 lakh is the minimum you must keep invested in SIFs, measured per fund house, at the PAN level, across all of that house’s SIF strategies combined. It is not ₹10 lakh per scheme.
- It counts only your SIF investments. Your regular mutual fund holdings at the same fund house do not count toward it.
- Accredited Investors are exempt from the ₹10 lakh minimum.
- The fund house monitors this daily. If your balance falls below ₹10 lakh because of withdrawals, you get a window of around 30 days to top it up, and if the shortfall is not made up, the remaining units can be redeemed.
The minimum means SIFs are aimed at investors who can commit a substantial lump sum.
SIF, mutual fund, PMS and AIF compared
| Feature | Mutual Fund | SIF | PMS | AIF |
|---|---|---|---|---|
| Minimum investment | ₹100-₹500 | ₹10 lakh | ₹50 lakh | ₹1 crore |
| Who manages it | AMC (pooled) | AMC (pooled) | Manager (your own account) | Fund (pooled) |
| Can it short / hedge? | Very limited | Yes, up to 25% via derivatives | Depends | Yes |
| Regulation | SEBI MF rules | SEBI MF rules + extra SIF rules | SEBI PMS rules | SEBI AIF rules |
| Typical investor | Everyone | Affluent retail | HNI | HNI / institutional |
A SIF offers some of the flexibility of a PMS at one-fifth of the PMS minimum, under mutual fund regulation.
What a SIF can do that a mutual fund cannot
The main difference is the ability to take short positions. A normal equity mutual fund is long-only: it gains only when the stocks it owns go up. A SIF can run long-short strategies, taking unhedged short positions of up to 25% of the portfolio through derivatives.
A strategy that can also bet against certain stocks is designed to lose less when the market falls sharply, because the short positions offset part of the fall. This is the purpose of the “hybrid long-short” and “equity long-short” SIF categories. You can see how each live SIF has performed, including its drawdown against the Nifty 50, on my Lens SIF tracker, which uses daily NAVs from AMFI.
For an example, see how hybrid long-short SIFs performed when the Nifty fell about 15% in the 2026 Hormuz selloff.
The five SIF strategy types
SEBI allows SIFs to be offered under a defined set of strategies. The ones currently live fall into these groups:
- Equity Long-Short: mainly equity, with short positions to limit losses.
- Equity Ex-Top-100 Long-Short: focused on mid- and small-cap stocks outside the top 100.
- Sector Rotation Long-Short: moves between sectors, long the favoured ones and short the rest.
- Hybrid Long-Short: a mix of equity and debt with a long-short overlay.
- Active Asset Allocator Long-Short: shifts across asset classes.
Who a SIF may suit, and who it may not
A SIF may suit you if you can comfortably commit ₹10 lakh or more, you already understand how mutual funds work, and you want strategies that aim to limit losses as well as grow with the market.
A SIF is probably not suitable if ₹10 lakh is a stretch, you are still building your emergency fund or core SIP portfolio, or you are uncomfortable with strategies that use derivatives. For most people starting out, a mutual fund SIP comes first. You can estimate one with my SIP Calculator and link it to a goal with the Goal Planning Calculator.
How SIFs are taxed
SIF taxation depends on what the strategy holds. An equity-oriented SIF is taxed broadly like an equity fund, while strategies with lower equity exposure can be taxed differently. Because the rules are detailed and change with each Budget, I cover SIF and mutual fund taxation in a separate, regularly updated post.
How to invest in a SIF
You invest in a SIF in much the same way as a mutual fund, through a distributor or with the fund house. Because these products use derivatives, distributors must meet additional requirements: a valid ARN, the NISM Series-XIII Common Derivatives certification, and separate registration with AMFI as a SIF Distributor (SIFD).
I am registered to help clients with SIFs as part of my mutual fund distribution practice. If you are considering whether a SIF fits your plan, get in touch to discuss it, with no obligation.
What is a Specialised Investment Fund (SIF)?
A SIF is a SEBI-regulated investment product introduced in 2024-25 that sits between mutual funds and PMS. It is launched by a registered mutual fund house, allows strategies such as long-short, and requires a minimum investment of ₹10 lakh per investor at the PAN level across the house's SIF strategies.
What is the minimum investment in a SIF?
₹10 lakh, measured per fund house at the PAN level across all of that house's SIF strategies combined, not ₹10 lakh per scheme. Accredited Investors are exempt from this minimum.
How is a SIF different from a mutual fund?
A regular mutual fund is largely long-only and open to everyone from a few hundred rupees. A SIF requires ₹10 lakh and can run long-short strategies that take short positions of up to 25% of the portfolio through derivatives, while still being supervised under SEBI's mutual fund rules.
How is a SIF different from PMS and AIF?
The main differences are the minimum investment and the structure. A SIF needs ₹10 lakh and is a pooled product run by a mutual fund house. PMS needs ₹50 lakh and runs a separate account in your name. An AIF needs ₹1 crore. A SIF offers some of the flexibility of a PMS at a much lower minimum.
Can a SIF take short positions?
Yes. Unlike a normal equity mutual fund, a SIF can run long-short strategies and hold unhedged short positions of up to 25% of the portfolio using derivatives, which are designed to reduce losses when markets fall.
Who should consider investing in a SIF?
Investors who can commit ₹10 lakh or more, already understand how mutual funds work, and want strategies that aim to limit losses as well as grow with the market. Investors still building an emergency fund or core SIP portfolio are usually better served by mutual funds first.
Who regulates SIFs in India?
SEBI regulates SIFs under the SEBI (Mutual Funds) Regulations, 1996, plus a dedicated SIF framework that took effect from 1 April 2025. Only an established, SEBI-registered mutual fund house can launch a SIF.
Anish Kumar is an AMFI-registered Mutual Fund Distributor (ARN-329356) and AMFI-registered SIF Distributor (SIFD). This article is for educational and awareness purposes only and is not investment advice or a recommendation of any specific scheme. Mutual fund and SIF investments are subject to market risks; please read all scheme-related documents carefully. Past performance may or may not be sustained in the future and is not a guarantee of future returns.