What is an SIF?
A Specialised Investment Fund (SIF) is a newly introduced asset class by SEBI, positioned between:
- Mutual Funds (MF) – low-cost, highly regulated pooled investments for retail.
- Portfolio Management Services (PMS) – bespoke, actively managed portfolios with high ticket sizes.
SIFs aim to offer a balanced middle path: flexibility, customization, and moderate entry barriers under tighter regulation than PMS and AIFs.
Why was SIF introduced?
SEBI created the SIF framework in March 2024 to address the gap between standard mutual funds and high-cost, high-minimum investment options like PMS or AIFs. SIFs offer enhanced liquidity, easier access, and flexibility.
Comparing MF, PMS, SIF, and AIF
| Feature | Mutual Fund | PMS | SIF | AIF |
|---|---|---|---|---|
| Min Investment | Starts ₹500 (SIPs) | ₹50 lakh | ₹10 lakh | ₹1 crore |
| Regulation | Highly regulated | Moderately regulated | Regulated with enhanced strategies | Lightly regulated |
| Customization | Standard strategies | Fully customised portfolio | Strategy-specified flexibility | Niche, complex strategies |
| Liquidity | Daily redemptions | Periodic, depending on setup | Moderate – open, closed, or interval | Low – often multi-year lock-ins |
| Investor Base | Retail | HNI | Affluent/informed retail + HNI | HNI and institutional |
Key Features of SIF
- Minimum Investment: ₹10 lakh per investor. SIP/SWP offered but redemption under ₹10 lakh requires full exit.
- Structure: SIFs can be open-ended, interval, or closed, with redemption windows of up to 15 working days.
- Allowed Strategies:
- Equity, debt, or hybrid long-short, sector-focused, or asset allocator strategies
- Derivatives and short-selling permitted up to 25% of assets
- Risk Management: Risk band disclosures and limits on debt exposure by rating.
- Regulation: Managed by eligible AMCs or asset teams; high transparency like mutual funds.
Who is SIF for?
- High‑net‑worth individuals (HNI) with at least ₹10 lakh to deploy
- Sophisticated retail investors familiar with derivatives and complex strategies
- Institutional investors seeking advanced but transparent exposure
Advantages and Considerations 🎯
✅ Benefits
- Greater strategy flexibility than mutual funds
- Lower minimums and more liquidity than PMS/AIF
- SEBI-regulated: built-in transparency and oversight
⚠️ Considerations
- Inherent risk from derivatives and leverage
- Higher investment minimum
- Requires investor sophistication
Final Thoughts
SIFs are a powerful new instrument in India’s investment toolkit—offering strategic flexibility, moderate liquidity, and regulatory safeguards at a mid-tier investment threshold. For informed investors seeking advanced strategies without committing to PMS or AIF depth, SIFs can be a compelling choice.