India's investment landscape just got a new middle ground.

For years, investors were essentially left with two choices. Mutual funds - accessible, regulated, but limited in what strategies a fund manager could run. Or PMS and AIFs - far more flexible, but with minimum investments of ₹50 lakh and ₹1 crore respectively, putting them out of reach for many.

SEBI identified this gap and, in April 2025, formally introduced a new product category to fill it: Specialized Investment Funds (SIFs).

What Is a Specialised Investment Fund (SIF)?

A Specialised Investment Fund is a SEBI-regulated investment product that sits between a mutual fund and a Portfolio Management Service. It allows fund managers to run more sophisticated, strategy-driven portfolios including the ability to take short positions and use derivatives within a regulated framework and at a lower minimum than PMS or AIF.

In simple terms: the flexibility of a hedge fund strategy, at the entry point of a structured SEBI product.

SIFs are launched under a mutual fund trust, and only registered AMCs meeting strict eligibility criteria can offer them. The minimum investment is ₹10 lakh per investor, calculated at the PAN level across all SIF strategies within a single AMC.

SIF AUM has grown sharply since launch from approximately ₹2,010 crore in October 2025 to nearly ₹9,711 crore by February 2026, a clear sign that the product is finding traction among sophisticated investors.

How Are SIFs Different from Mutual Funds?

On the surface, SIFs look similar to mutual funds: they are managed by AMCs, regulated by SEBI, and available to retail investors with a defined minimum ticket. But the similarities stop there.

Strategy flexibility. A regular mutual fund manager's hands are largely tied, they must follow category mandates, cannot short-sell, and have limited access to derivatives. SIFs are permitted to use complex investment strategies including long-short equity, sector-based positioning, and active asset allocation, and can take unhedged short positions up to 25% of their portfolio using derivatives. This is a fundamental difference in how the fund manager can operate.

Better liquidity than PMS, more strategy than MFs. SIFs sit between a regular mutual fund and a Portfolio Management Service. Mutual funds are accessible, low-cost, and tightly regulated but limited in strategy. PMS and AIFs, on the other hand, demand a minimum investment of ₹50 lakh or more. SIFs offer a middle path, advanced strategies at a ₹10 lakh entry point.

Tax efficiency. Unlike AIFs, which are taxed at the fund level before distributions, SIFs are taxed like mutual funds. If the equity exposure is 65% or more, LTCG and STCG rates applicable to equity funds apply, a meaningful advantage for long-term investors.

Liquidity varies by strategy. This is an important nuance. Open-ended equity SIF strategies allow daily redemptions. Debt and hybrid strategies operate on an interval basis - weekly, fortnightly, or monthly, with notice periods of up to 15 working days. Understanding the redemption frequency of a specific SIF before investing is important.

The 7 SIF Strategies across 3 Categories

SEBI has defined three broad categories of SIF strategies, with seven specific subcategories in total. Each AMC can offer one strategy per category. Here is how they break down:

Equity-Oriented Strategies

These funds primarily invest in listed equities and use derivatives to manage risk or generate alpha through short positions.

  1. Equity Long-Short Fund - Minimum 80% in equities across all market caps, with up to 25% unhedged short exposure via derivatives. The broadest equity SIF strategy, suited for investors who want equity-like returns with managed downside.
  2. Equity Ex-Top 100 Long-Short Fund - At least 65% in stocks outside the top 100 by market cap, the mid and small cap universe with up to 25% short derivative exposure. Designed to capture inefficiencies in less-researched companies.
  3. Sector Rotation Long-Short Fund - 80% in up to 4 sectors, with up to 25% short exposure at the sector level. Actively shifts between sectors like banking, technology, FMCG, and others based on macro and momentum signals.

Debt-Oriented Strategies

These funds operate primarily in the fixed income space with the flexibility to take tactical long and short positions in debt instruments.

  1. Debt Long-Short Fund - Invests across the debt market and uses derivatives to take both long and short positions on interest rate movements and credit spreads.
  2. Sectoral Debt Long-Short Fund - Focuses on specific sectors within debt such as banking, PSU, or corporate bonds and uses long-short positioning within those segments.

Hybrid Strategies

These funds combine equity, debt, and other asset classes dynamically, using long-short positions across both sides of the portfolio.

  1. Active Asset Allocator Long-Short Fund - Dynamic investment allocation across asset classes including equity, debt, equity and debt derivatives, REITs, InvITs, and commodity derivatives. The most flexible SIF strategy available.
  2. Hybrid Long-Short Fund - Minimum 25% in equity-related instruments and minimum 25% in debt instruments, with up to 25% unhedged derivative positions across both. Designed to offer a balance of growth and capital protection.

Which AMCs Are Offering SIFs?

The SIF space has seen rapid adoption. As of June 2026, 27 Specialised Investment Funds are live across 15 AMCs like Aditya Birla(Apex), Edelweiss(Altiva), ICICI(Isif), Tata(Titanium), etc. SEBI requires each AMC to use a distinct brand name for their SIF, separate from their mutual fund identity to ensure investors clearly differentiate between the two.

Is a SIF Right for You?

SIFs are not a replacement for your mutual fund portfolio. They are an addition for investors who have already built their core allocation and are looking to layer in more sophisticated, strategy-driven exposure.

This is not a product for beginners. It suits investors who already understand markets and want to enhance returns through strategy-driven investing.

If you are a HNI or UHNI investor with a higher risk appetite, a longer time horizon, and a desire to access hedge-fund-style strategies within a regulated and transparent structure, SIFs are worth a serious look.

Want to Explore SIFs as Part of Your Portfolio?

At MIRA Wealth, we evaluate SIF strategies across AMCs and help our clients identify the right fit for their overall portfolio architecture, not in isolation, but as part of a coherent wealth plan.

Reach out to us to understand whether SIFs belong in your portfolio, and if so, which strategy and AMC is best suited to your goals.