Specialised Investment Funds (SIFs)
Specialised Investment Funds (SIFs) are a new investment product in India, introduced by SEBI and effective from April 1, 2025. They combine elements of traditional mutual funds and portfolio management services, offering advanced strategies with a lower minimum investment compared to PMS or Alternative Investment Funds (AIFs).
Key Features of SIFs
- Minimum Investment: Generally requires a minimum investment of ₹10 lakh per investor across SIF strategies within one AMC, unless the investor is a SEBI-defined accredited investor.
- Target Audience: Designed for high net-worth individuals (HNIs), experienced investors, and institutions comfortable with market complexities, higher risk, and lower liquidity than traditional mutual funds.
- Regulatory Framework: SIFs are regulated under existing SEBI Mutual Fund Regulations.
- Investment Strategies: Fund managers have greater flexibility for advanced techniques, including long-short positions (using derivatives up to 25% of net assets), sector rotation, and dynamic asset allocation.
- Liquidity: Generally lower than traditional mutual funds, with variable redemption frequencies and potential notice periods.
- Taxation: SIFs have a tax structure similar to mutual funds, with pass-through taxation.
Who Should Consider SIFs
SIFs are suitable for investors with a surplus of ₹10 lakh or more for long-term investment, who understand complex strategies, and are comfortable with higher volatility and lower liquidity. Traditional mutual funds are typically recommended for most retail investors seeking simplicity, high liquidity, and long-term wealth creation.