What Are Specialised Investment Funds (SIFs)?

Specialised Investment Funds (SIFs) are a new investment option approved by SEBI in 2025. They offer advanced investment strategies for experienced investors. Think of them as a step up from regular mutual funds with more flexibility.

SIFs bridge the gap between traditional mutual funds and Portfolio Management Services (PMS). They provide professional management with dynamic strategies while maintaining SEBI oversight and regulatory framework.

Main Features

• Minimum Investment: ₹10 lakh per investor. This ensures only experienced investors participate.
• Active Management: Funds can buy and sell stocks actively, including short positions. This allows managers to profit in both rising and falling markets.
• Derivative Usage: They use derivatives up to 25% of the fund for strategic positioning, not just hedging.
• Flexible Liquidity: Options range from daily to monthly redemptions based on the scheme structure.
• Systematic Plans: SIP, SWP, and STP are available.

Key Benefits

• Higher Return Potential: Active strategies work in up and down markets, not just bull markets.
• Professional Management: Experienced fund managers make decisions based on market conditions.
• Better Diversification: Exposure to niche areas beyond plain equity.
• SEBI Regulated: Full regulatory oversight ensures transparency.
• No PMS Complexity: Less costly than PMS with more flexibility than mutual funds.

Taxation

Equity-Oriented SIFs: 12.5% tax on gains over ₹1.25 lakh after holding for 1 year. Below ₹1.25 lakh, gains are tax-free.

Debt or Hybrid SIFs: Taxed at your income slab rate.

How SIFs Compare

Feature	Mutual Funds	SIFs	PMS
Minimum Investment	₹500 – ₹5,000	₹10 lakh	₹50 lakh
Strategies	Long-only	Buy/sell/short	Fully customized
Liquidity	Daily	Daily to monthly	Quarterly
Risk Level	Medium	High	Very high
Annual Fees	Up to 2.25% TER	Similar to MFs	1.5–2.5% + performance
Best For	Beginners	Experienced	HNIs

Who Should Invest in SIFs?