What Is a Specialised Investment Fund (SIF)? The Complete 2026 Guide for Investors and Advisors

What Is a SIF? The Basics

A Specialised Investment Fund is a new product category under the SEBI (Mutual Funds) Regulations. SEBI announced the framework on 27 February 2025, and it took effect on 1 April 2025. The first schemes opened for subscription in October 2025.

The key idea: a SIF is run by a mutual fund house (AMC), with the same daily NAV, disclosure, custody and investor-protection rules. But it is allowed to do things a regular mutual fund cannot, most importantly, bet against stocks or bonds using derivatives.

Key features at a glance

Why “per PAN, per AMC” matters

The ₹10 lakh floor is not per scheme. If you put ₹6 lakh in one AMC's Hybrid Long-Short fund and ₹4 lakh in the same AMC's Equity Long-Short fund, you meet the threshold. Systematic plans (SIP, SWP, STP) are allowed, but your total holding with that AMC's SIFs must stay above ₹10 lakh.

How a SIF Works: The Long-Short Idea

In a traditional mutual fund, if a manager dislikes a stock, the most they can do is not own it. A SIF manager can go further and short it, earning a gain if the price falls.

Here is a simplified example of an Equity Long-Short SIF:

1. Long book (80–100%): The fund buys stocks it expects to rise.
2. Short book (up to 25%): It sells index or stock futures on names it expects to fall.
3. Result: In a falling market, gains on the short book can cushion losses on the long book. In a rising market, the short book may drag on returns.

Two points investors often miss:

• 25% is a cap, not a requirement. SEBI sets no minimum short exposure, so a “long-short” SIF can run with very little shorting.
• Hedged derivatives are separate. Derivatives used to fully hedge existing positions or rebalance the portfolio do not count toward the 25% unhedged limit.

The 7 SIF Investment Strategies Allowed by SEBI

SEBI permits seven strategies across three buckets. Each AMC can run only one scheme per strategy, which forces differentiation between fund houses.

Equity-oriented strategies

Debt-oriented strategies

Hybrid strategies

“Up to daily” means daily is the most frequent redemption allowed; an AMC can choose a less frequent window. Many early SIFs, especially hybrid ones, run as interval schemes with redemptions only on set days. Always check the scheme's Investment Strategy Information Document (ISID).

So far, Hybrid Long-Short has been the most popular strategy, with most large AMCs launching one first. You can filter the SIF register by strategy to compare every Hybrid Long-Short fund.

SIF vs Mutual Fund vs PMS vs AIF

This is the comparison most investors and advisors want. Here is how a SIF sits between the other options.

The big advantage: tax efficiency

The SIF's strongest selling point versus PMS is taxation. In a PMS, every buy and sell inside your account can trigger capital gains tax. In a SIF, as with a mutual fund, trading inside the fund is not taxed in your hands; you pay tax only when you redeem units.

The trade-off versus mutual funds

You pay for that flexibility with a much higher entry ticket, more complex strategies, often less frequent redemption windows, and very limited track records, since the category is barely a year old.

How Are SIFs Taxed?

SIFs are taxed like mutual funds, based on the asset mix of each scheme:

• Equity-oriented SIFs (65%+ in Indian equity, e.g., Equity Long-Short, Ex-Top 100, Sector Rotation): taxed as equity mutual funds. Short-term gains (held 12 months or less) at 20%; long-term gains above ₹1.25 lakh a year at 12.5%.
• Debt-oriented SIFs: gains taxed at your income tax slab rate, regardless of holding period.
• Hybrid SIFs: treatment depends on the scheme's actual equity allocation. Many Hybrid Long-Short funds use arbitrage positions to qualify for equity taxation, while others fall into the “other” category. Check each scheme's documents.

Tax rules change. See the Income Tax Department and confirm the current position with a tax adviser before investing.

How Big Is the SIF Market Today?

Growth has been fast for a product that only opened in October 2025:

• 33 live schemes from 18 AMCs as of October 2026
• Industry AUM of about ₹28,600 crore, up from roughly ₹12,000 crore in April 2026
• Early leaders by AUM include Edelweiss (Altiva), SBI (Magnum SIF) and ICICI Prudential (iSIF)
• Several PMS and AIF managers have applied for mutual fund licences specifically to enter the SIF space

See the full register of live SIF schemes, filterable by strategy and AMC.

Who Should Invest in a SIF?

A SIF may suit you if you:

• Have a large, diversified portfolio and can commit ₹10 lakh to a single satellite allocation
• Understand derivatives and are comfortable with strategies that can underperform in strong bull markets
• Want PMS-style flexibility without PMS-style tax drag
• Can stay invested for three years or more, and accept interval redemption windows

A SIF is probably not right if you:

• Are building a core portfolio or are a first-time investor
• Need daily liquidity for this money
• Would be uncomfortable if a strategy lagged a plain index fund for a year or more

Many advisors suggest capping SIF exposure at around 10–15% of a portfolio while the category builds a track record.

Questions to ask before investing

1. Which of the seven strategies is this, and what is its redemption frequency?
2. How much does the fund actually short in practice, versus the 25% cap?
3. What is the expense ratio (TER) on the direct and regular plans?
4. What experience does the fund manager have with long-short or derivatives strategies?
5. How is the scheme taxed: equity, debt or other?

How to Invest in a SIF

1. Pick a strategy that fits your risk profile and horizon.
2. Compare schemes across AMCs on TER, redemption frequency, short exposure and manager background using the SIF comparison table.
3. Read the ISID (Investment Strategy Information Document), the SIF equivalent of a scheme information document.
4. Invest through the AMC's dedicated SIF platform, or through a distributor holding the NISM SIF certification. KYC is the same as for mutual funds.
5. Monitor NAV, portfolio disclosures and actual short positions over time.

FAQ

What is the full form of SIF in mutual funds?

SIF stands for Specialised Investment Fund. It is a SEBI-regulated category that sits between mutual funds and PMS, allowing long-short strategies within a mutual fund structure.

What is the minimum investment in a SIF?

₹10 lakh per PAN, calculated across all SIF strategies of the same AMC. Accredited investors are exempt from this minimum.

Is a SIF the same as a hedge fund?

No. A SIF can short up to 25% of net assets, but it cannot use leverage the way a Category III AIF or global hedge fund can, and it follows mutual fund rules on disclosure, custody and diversification.

Can I do a SIP in a SIF?

Yes, SIPs, SWPs and STPs are allowed, but your total SIF investment with that AMC must stay at or above ₹10 lakh.

Are SIFs safer than mutual funds?

Not necessarily. Shorting can reduce losses in falling markets, but wrong calls on the short book can add losses too. SIFs are generally riskier and more complex than plain mutual funds.

How many SIFs are there in India?

As of October 2026, 33 SIF schemes from 18 AMCs are live, across equity, debt and hybrid strategies. The number is rising as more fund houses launch.

Conclusion

The Specialised Investment Fund is the most significant new product in Indian asset management in years. It brings long-short investing, once limited to PMS and AIF clients with ₹50 lakh to ₹1 crore, to investors with ₹10 lakh, while keeping mutual fund taxation and regulation.

But SIFs are new, complex and varied. Two “Hybrid Long-Short” funds from different AMCs can behave very differently. Comparing strategy, costs, liquidity and actual shorting behaviour is essential.