In a move to bridge the gap between traditional mutual funds and portfolio management services (PMS), the Securities and Exchange Board of India (SEBI) introduced a new category called Specialised Investment Funds (SIFs), effective from April 1, 2025. Designed for seasoned investors, SIFs offer enhanced portfolio flexibility by allowing sophisticated strategies such as long short positions, sector rotations, and dynamic asset allocation. With a minimum investment threshold of ₹10 lakh and regulated under SEBI's mutual fund framework, SIFs cater to individuals and institutions seeking differentiated exposure beyond conventional mutual fund offerings while still operating within a structured and transparent regulatory environment.
Essential points you need to know about Specialised Investment Funds
The SIF full form is Specialised Investment Fund. It is a new category introduced by the Securities and Exchange Board of India (SEBI) to bridge the gap between traditional mutual funds and portfolio management services (PMS)
SIFs are a new category introduced by SEBI to offer sophisticated, strategy based investment options between mutual funds and PMS.
Minimum investment threshold is ₹10 lakh per investor (PAN level) across all SIF strategies within a single AMC, unless the investor is accredited.
SIFs allow for long short strategies, sectoral rotations, and dynamic asset allocations offering greater portfolio flexibility.
Redemption may be less frequent, and AMCs may impose notice periods of up to 15 days.
SIFs are best suited for experienced or high net worth investors who understand market cycles, are comfortable with volatility, and do not require high liquidity.
A Specialised Investment Fund (SIF) is a new investment structure introduced by SEBI, effective from April 1, 2025, that allows Asset Management Companies (AMCs) to offer strategy focused schemes with greater portfolio flexibility than traditional mutual funds.
Note: Investors who are new to Specialised Investment Funds may also want to understand how they compare with newly launched mutual funds. Our detailed guide on NFO basics explains how New Fund Offers (NFOs) are structured, their risks, and how they differ from strategy-specific funds like SIFs.
Specialised Investment Funds (SIFs) in India are SEBI-regulated investment vehicles bridging traditional mutual funds and Alternative Investment Funds (AIFs), offering advanced strategies (long/short, derivatives, niche sectors like real estate/infra) for sophisticated investors with ₹10 lakh minimums, providing flexibility beyond MFs but more structure than PMS/AIFs, allowing focused, strategy-driven investing with higher risk/reward potential.
Understanding the operational framework of Specialised Investment Funds
Specialised Investment Funds (SIFs) operate under the SEBI Mutual Fund Regulations as a distinct category offering strategy specific schemes with enhanced flexibility. Unlike traditional mutual funds.
SIFs are designed to execute sophisticated investment strategies like:
Each scheme under SIF is structured as either an open ended or interval fund, depending on the strategy type. AMCs can design these funds to invest across various asset classes such as listed equities, debt instruments, commodity derivatives, and REITs/InvITs. A key feature is the ability to take unhedged short positions of up to 25% of the net assets using derivatives, providing exposure to both upward and downward market movements.
To participate, investors must meet a minimum investment requirement of ₹10 lakh, unless they qualify as accredited investors, who are exempt. SEBI permits the use of SIP, SWP, and STP, as long as the overall investment meets the minimum threshold.
Unlike standard mutual funds, SIFs may involve less frequent redemption options, ranging from daily to monthly or even fixed maturity. AMCs can also impose notice periods of up to 15 working days for redemptions. Additionally, SIFs are subject to strict disclosure norms, risk labeling (1 to 5 bands), and listing requirements if they follow a closed ended or interval structure.
Understanding the regulatory framework governing SIFs
SIF minimum investment ₹10 lakh is mandated under Regulation 49X(1) of SEBI's Mutual Fund Regulations. This applies per investor at the PAN level across all SIF strategies offered by a single Asset Management Company (AMC).
The ₹10 lakh threshold is not scheme-specific. It represents the total commitment across all SIFs under one AMC, and does not include investments in the AMC's regular mutual fund schemes.
As per accredited investor rules, individuals or entities qualifying as accredited investors are exempt from the ₹10 lakh minimum investment requirement in SIFs.
AMCs are permitted to offer SIP (Systematic Investment Plan), SWP (Systematic Withdrawal Plan), and STP (Systematic Transfer Plan) under SIFs, provided that the cumulative commitment across these modes satisfies the ₹10 lakh threshold—unless the investor qualifies under accredited investor rules.
Daily monitoring is required to ensure continued compliance. While passive breaches due to market fluctuations are not violations, if the investment value falls below ₹10 lakh due to active redemption or transfers, the AMC may require the investor to exit the SIF.
SEBI has approved a defined set of long short strategies for Specialised Investment Funds, categorized into Equity Oriented, Debt Oriented, and Hybrid Strategies. Each strategy comes with specified exposure limits, asset allocation mandates, and redemption frequency norms.
These strategies primarily invest in listed equities, with the option to take short positions through derivatives (up to 25% of the fund's net assets).
Strategy Focus: Capture both upward and downward price movements using long and short equity positions
Strategy Focus: Exploit pricing inefficiencies in the broader market beyond large cap stocks
Strategy Focus: Tactical allocation across sectors with both long and short views
These strategies provide exposure to fixed income instruments while permitting controlled short positions in debt markets.
Strategy Focus: Interest rate and duration based positioning in debt markets
Strategy Focus: Generate returns through relative value between sectors in the debt market
These multi asset approaches blend equity, debt, and alternatives with active allocation and shorting capabilities.
Strategy Focus: Dynamic portfolio rebalancing across asset classes based on market conditions
Strategy Focus: Balanced risk approach across equity and debt with tactical short positioning
Specialised Investment Funds (SIFs) provide a unique investment opportunity for experienced investors seeking differentiated strategies. However, they also come with higher complexity and risk, making it important to weigh both advantages and potential drawbacks before investing.
SIFs allow investors to participate in advanced investment techniques such as long short equity, tactical asset allocation, and sector rotation, which are not typically available in regular mutual fund schemes.
These funds can invest across equities, debt, derivatives, REITs/InvITs, and commodities offering broader portfolio diversification beyond standard instruments.
Investors gain access to focused, high conviction portfolios aligned with specific themes, sectors, or strategies, managed by experienced fund managers.
Through short selling, dynamic rebalancing, and flexibility in asset allocation, SIFs aim to generate alpha even in volatile or declining markets, subject to market risks.
A minimum investment of ₹10 lakh is required, restricting access to only high net worth or financially prepared individuals.
Redemption windows may be less frequent ranging from daily to quarterly or fixed maturity sometimes with notice periods of up to 15 working days. Exit loads may also apply.
Like all market linked products, SIFs are subject to equity, interest rate, and credit risks, along with the added dependency on fund manager skill and execution.
While both investment products are regulated by SEBI, Specialised Investment Funds (SIFs) and traditional mutual funds differ significantly in terms of investor eligibility, investment thresholds, liquidity, and strategy flexibility. Here's a side by side comparison:
| Feature | Specialised Investment Funds (SIFs) | Traditional Mutual Funds |
|---|---|---|
| Investor Eligibility | Targeted at accredited investors, high net worth individuals (HNIs), and institutional investors | Open to the general public, including retail investors |
| Minimum Investment | Starts from ₹10 lakh, required at PAN level across SIF strategies | Can begin with as low as ₹100, making it highly accessible |
| Regulatory Framework | Regulated under SEBI Mutual Fund Regulations (not AIF/PMS) with special provisions for SIFs | Regulated under the SEBI Mutual Fund Regulations |
| Liquidity | Lower liquidity, with redemption options ranging from daily to quarterly or longer; may include lock in or notice periods | High liquidity through open ended schemes with daily redemptions |
| Asset Class Flexibility | Can invest in niche and alternative asset classes, including derivatives, REITs, and commodities | Primarily invest in stocks & bonds |
| Risk Profile | High, due to use of leverage, short selling, and concentrated strategies | Moderate to high, depending on fund type (equity, debt, etc.) |
| Return Potential | Potential for higher returns through complex strategies, but with increased volatility and risk exposure | Potential for higher returns through complex strategies, but with increased volatility and risk exposure |
Specialised Investment Funds (SIFs) are designed for investors who have the financial capacity and market understanding to participate in advanced strategies under a regulated structure. These funds are not intended for all retail investors, especially those seeking short term access or capital protection.
Investors with surplus capital (10 lakh or more) who are willing to commit for a longer horizon.
Individuals or institutions who understand complex products like derivatives, long short positions, and asset allocation shifts.
Those looking to diversify into non traditional strategies not typically available through regular mutual funds.
Investors who are comfortable with lower liquidity, market fluctuations, and potentially higher volatility.
Understanding the core characteristics that define Specialised Investment Funds
Combines mutual fund regulation and transparency with AIF-like flexibility, using derivatives and complex strategies within a regulated framework.
Allows focus on specific themes, sectors (real estate, infra, stressed assets), or non-traditional assets for specialized portfolio construction.
Can take long/short positions, use derivatives, and implement tactical asset allocation, unlike traditional long-only mutual funds.
Minimum investment of ₹10 lakh, making them accessible to experienced retail investors, not just ultra-high net worth individuals.
Higher exposure limits for single issuers/assets and options for open, closed, or interval fund structures based on strategy requirements.
Common questions about Specialised Investment Funds answered
Explore a full range of financial services, including mutual funds, PMS/AIF, startup funding, health and general insurance, business and retail loans, corporate finance, and life insurance. Our expert solutions help you manage wealth, protect assets, and achieve both personal and business financial goals.
© 2026 ZoeyBox. All Rights Reserved.
