The Securities and Exchange Board of India (SEBI) has introduced a new category called Specialized Investment Funds (SIFs), a major step toward innovation in the country’s ₹75-lakh-crore mutual fund industry.
According to Moneycontrol, SIFs allow fund managers to use advanced strategies such as long-short equity, derivatives, and hybrid allocations while remaining under the mutual fund regulatory framework. The model combines the structure of mutual funds with the flexibility seen in hedge-style funds and Portfolio Management Services (PMS).
The framework, effective April 1, 2025, was introduced through SEBI’s December 2024 amendment to the Mutual Fund Regulations. As detailed on HDFC Bank’s Learning Centre, SIFs are designed for investors who seek diversified risk-managed exposure in public markets.
Key Provisions
- Minimum Investment Requirement:
Investors must maintain at least ₹10 lakh across all SIF investments linked to their PAN. Fortune India reports that the rule ensures participation by informed investors while still allowing SIPs, STPs, and SWPs within the limit. - Flexible but Regulated Strategies:
SIFs can adopt complex investment methods but must disclose risk levels and redemption terms. Unhedged derivative exposure is capped to ensure portfolio stability. - Eligibility for AMCs:
Only experienced Asset Management Companies (AMCs) with a proven track record may apply. SEBI has introduced a standardized approval format and an ongoing monitoring system for compliance.
Early Industry Response
Leading fund houses are already moving into the SIF space. Mirae Asset AMC has received approval for its new Platinum SIF platform. Quant Mutual Fund has filed for two long-short equity schemes, while 360 ONE Asset Management plans to introduce DynaSIF, offering multiple strategy options.
Market experts expect other major AMCs such as SBI Mutual Fund and Edelweiss to follow shortly. Analysts say this could be the most important evolution in India’s mutual fund industry since the introduction of passive and ETF products.
Outlook
SIFs are expected to attract high-net-worth and experienced retail investors seeking innovative and actively managed exposure. By combining flexibility with regulation, SEBI’s SIF framework is set to redefine India’s investment landscape – promoting innovation, investor protection, and deeper market participation.
