Specialised Investment Funds (SIF)
A new SEBI category that bridges mutual funds and PMS — offering sophisticated, strategy-driven approaches (including long-short investing) from a ₹10 lakh entry point, inside the mutual fund regulatory framework.
A Specialised Investment Fund (SIF) is a distinct investment category introduced by SEBI to fill the long-standing gap between traditional mutual funds and Portfolio Management Services (PMS). It allows established asset management companies (the same firms that run mutual funds) to offer strategy-focused schemes with far more flexibility than a regular mutual fund — most notably the ability to take “short” positions and run long-short strategies — while still operating under SEBI’s mutual fund regulations, disclosure norms, and investor protections.
SIFs were enabled through amendments to the SEBI (Mutual Funds) Regulations effective December 2024, with a detailed framework issued on 27 February 2025, and became operational from 1 April 2025. They are designed for experienced investors who want more advanced strategies than a plain mutual fund offers, but who do not want the higher commitment and complexity of a PMS or an AIF.
Why SIF were created
Before SIFs, the Indian market had a clear gap:
- Mutual funds were accessible (from as little as ₹100) but limited in the strategies they could run — they generally couldn’t take meaningful short positions or run hedge-fund-style approaches.
- PMS (₹50 lakh) and AIFs (₹1 crore) offered flexibility but required large commitments.
Investors who wanted sophisticated strategies but sat between these levels often had nowhere regulated to go — and sometimes drifted toward unregistered or unauthorised schemes. SIFs give this segment a transparent, regulated middle path: advanced strategies inside a familiar, well-governed mutual fund structure.
What makes a SIF different from a mutual fund
SIFs can run approaches such as equity long-short, sector rotation, and active asset allocation that ordinary mutual funds are not permitted to use.
A SIF strategy can take unhedged short exposure of up to 25% of net assets using derivatives — meaning it can aim to benefit when selected securities fall, not only when they rise. This is in addition to derivative exposure used for hedging and portfolio rebalancing.
The cumulative gross exposure (across equity, debt, derivatives, repo, and credit default swaps) cannot exceed 100% of net assets — leverage beyond the portfolio's value is not allowed.
Each AMC can launch only one scheme per permitted strategy, which keeps offerings clean and avoids clutter.
- SIFs must be branded and marketed separately from the AMC's mutual fund schemes, each accompanied by a standard SEBI-prescribed disclaimer, so investors are never confused about what they are buying.
Each strategy is launched with an Investment Strategy Information Document (ISID) — the SIF equivalent of a scheme information document.
The seven strategies a SIF can use
SEBI allows seven types of SIF strategies, in three groups:
Equity-oriented strategies
- Equity Long-Short Fund
- Equity Ex-Top 100 Long-Short Fund
- Sector Rotation Long-Short Fun
Debt-oriented strategies
- Debt Long-Short Fund
- Sectoral Debt Long-Short Fund
Hybrid strategies
- Hybrid Long-Short Fund
- Active Asset Allocator Long-Short Fund
Who can offer a SIF (eligibility)
Only established mutual funds already registered with SEBI can launch a SIF, through one of two routes:
- Sound track-record route — for AMCs with a large average AUM (around ₹10,000 crore) and a clean regulatory history.
- Alternate route — for AMCs that appoint an experienced fund manager with a strong track record (typically managing ₹500 crore or more).
The SIF fund manager must hold the relevant NISM certification. These requirements ensure SIFs are run by experienced, professionally managed houses.
Who can invest, and how much
SIFs are for investors who already understand the basics and want something more advanced.
You need at least ₹10 lakh. This is your total across all SIF strategies of one company (not ₹10 lakh for each one).
The ₹10 lakh threshold does not apply to accredited investors, who may invest at lower amounts.
If your value drops below ₹10 lakh only because the market fell (not because you withdrew), you're usually allowed to take out the rest.
How SIFs are taxed
A big plus of SIFs is that they are taxed like mutual funds, which is usually better than some other advanced options:
- Equity-oriented SIFs: taxed like equity mutual funds — LTCG at 5%; STCG at 20%.
- Debt-oriented SIFs: taxed in line with the applicable debt-fund rules.
Crucially, there is no fund-level taxation (unlike a Category III AIF, where tax is paid at the fund level before distribution).
Tax treatment depends on the scheme’s classification and can change with each Budget. Confirm your position with a tax professional.
Key risks and things to keep in mind
SIFs are built for seasoned investors comfortable with moderately complex products.
No Guaranteed Returns
Returns are market-linked and not guaranteed. Long-short strategies can underperform if the manager's views are wrong on both the long and short side.
Strategy Complexity
SIFs use complex strategies, including short positions and derivatives
Investor Suitability
The ₹10 lakh entry suits investors who already have a core portfolio in place and want a specialised, satellite allocation.
Limited Track Record
Because the category is new, the track record is short — compare the manager's stated approach and disclosures carefully.
Liquidity
Liquidity varies by strategy — equity long-short funds are often daily-redeemable, but debt and hybrid strategies may offer only weekly or interval (windowed) redemptions.
Frequently asked questions
It's a separate type, but it's run by mutual fund companies, follows the same SEBI rules, and is taxed like a mutual fund. It's just sold under a separate name.
In total. SEBI counts your aggregate investment across all SIF strategies of one AMC at the PAN level.
A SIF is a pooled product (you hold units, like a mutual fund) with a ₹10 lakh entry and mutual-fund tax treatment. A PMS is an individual account where you directly own the securities, with a ₹50 lakh entry. The SIF is the lower-commitment, more tax-efficient middle option.
Both can run long-short strategies, but a SIF has a lower entry (₹10 lakh vs ₹1 crore) and retains mutual fund taxation, whereas a Category III AIF is taxed at the fund level, which can reduce post-tax returns.
Yes — within limits. A SIF strategy can take unhedged short exposure of up to 25% of net assets through derivatives, in addition to hedging positions, enabling genuine long-short strategies.