SIFs Details

SIFs in India - Meaning, Benefits, Taxation & How to Invest

What is a Specialised Investment Fund (SIF)?

A Specialised Investment Fund (SIF) is a newly introduced investment option in India, designed for investors who want more flexibility than traditional mutual funds but don't qualify or wish to invest the ₹50 lakh minimum required in a Portfolio Management Service (PMS).

Think of a SIF as a mid-level investment vehicle:

• Not as rigid and retail-friendly as Mutual Funds (MFs)
• Not as exclusive and high-ticket as PMS

A SIF is managed by a professional fund manager and allows investors to participate in custom strategies like private credit, thematic equity, or structured debt, with a minimum investment of ₹10 lakh.

These funds are governed by SEBI (Securities and Exchange Board of India) under a new framework rolled out in 2024–25.

Quick Snapshot

• Regulated by: SEBI
• Managed by: SEBI-registered Asset Management Companies (AMCs)
• Minimum investment: ₹10 lakh (unless you're an accredited investor)
• Strategy: Flexible - equity long short, debt long short, thematic equity, hybrid models

Why India Needed a SIF Product

India’s investment landscape had a noticeable gap:

Product	Minimum Investment	Flexibility	Target Audience
Mutual Fund	₹100-₹500	Low	Retail Investors
PMS	₹50 lakh	High	Ultra-HNIs
Gap	-	-	HNIs with ₹10-50 lakh

SEBI launched the SIF framework to fill this void. It offers:

• A professional, diversified investment option for doctors, professionals, business owners, and others with growing wealth
• Access to alternative strategies not available in mutual funds
• A regulated platform that's still more accessible than PMS or AIF

SIFs now allow wealth managers and AMCs to offer tailored portfolios to a broader base of sophisticated, non-retail investors - without diluting compliance and investor protections.

Is SIF Regulated by SEBI?

Yes, SIFs in India are formally regulated by SEBI.

Here's how it works:

• SIFs are not a separate license like AIF or PMS - instead, they are a new product type that only SEBI-registered AMCs can offer
• SEBI issued a circular in 2024 creating the SIF framework, with clear rules on ticket size, fund structure, disclosures, and risk management
• Unlike PMS or AIF, only mutual fund houses (AMCs) can launch SIFs - this ensures trust, scalability, and public confidence

This makes SIFs a trusted option, with the credibility of AMC structures and regulatory guardrails similar to mutual funds - but with greater flexibility and a higher risk-reward profile.

Minimum Investment Requirement in SIFs

The minimum investment amount for a Specialised Investment Fund (SIF) in India is ₹10 lakh per investor, per PAN, across all SIF strategies offered by a fund house.

So if you're investing in multiple SIF schemes from the same AMC, your combined investment must total at least ₹10 lakh.

Important Clarifications:

• This ₹10 lakh minimum is not per scheme, but PAN-level across all SIFs from the same AMC
• If your investment dips below ₹10 lakh (due to market movement), you must exit completely - partial redemptions below this level are not allowed
• If you're an accredited investor, you're exempt from this ₹10 lakh rule

Who is an Accredited Investor?

According to SEBI, you qualify as an accredited investor if you meet either of the following criteria:

• Annual income ≥ ₹2 crore (in each of the last 2 years), or
• Net worth ≥ ₹7.5 crore (excluding your primary residence)

SIF vs Mutual Fund (MF): What's the Difference?

This is one of the most searched queries – and rightly so. On the surface, both SIFs and mutual funds are regulated by SEBI, are managed by professional AMCs, and pool money from investors.

However, they differ significantly in the following areas:

• Who can invest
• Minimum amount required
• Strategy flexibility
• Risk level
• Taxation
• Liquidity

SIF vs Mutual Fund (MF): Side-by-Side Comparison

Feature	SIF (Specialised Investment Fund)	Mutual Fund (MF)
Regulator	SEBI	SEBI
Min. Investment	₹10 lakh (unless accredited)	₹100-₹500
Investor Type	HNIs, Professionals, Accredited Investors	Retail, HNIs, Everyone
Strategy Flexibility	High (thematic, credit, hedge, etc.)	Low to moderate (predefined schemes)
Liquidity	Low - exit rules apply	High - daily redemptions allowed
Transparency	Moderate (quarterly/semi-annual updates)	High (monthly portfolio disclosures)
Risk Level	Medium to High	Low to Medium (depending on category)
Taxation	20% STCG / 12.5% LTCG (no indexation)	Depends on holding & fund type (equity/debt)

Takeaway:

*SIFs are for serious investors who want more control and access to niche strategies - but can also handle higher risk and lesser liquidity. Mutual funds remain the best choice for simplicity, liquidity, and regulated transparency.*

SIF vs PMS vs AIF: Full Comparison Table

Now that you understand the difference between SIF and Mutual Funds, here's another common query:

"How is a SIF different from PMS or AIF?"

PMS (Portfolio Management Service) gives you a custom portfolio, directly in your name. Minimum investment: ₹50 lakh.

AIF (Alternative Investment Fund) is a pooled fund structure across Category I (startup), II (PE/credit), and III (hedge). The entry point is usually ₹1 crore.

SIF, on the other hand, is an AMC-backed pooled vehicle, with SEBI-defined rules but more flexibility than a Mutual Fund and a lower ticket size than PMS/AIF.

Here's a comparison you can rely on:

Feature	SIF	PMS	AIF
Regulator	SEBI	SEBI	SEBI
Minimum Investment	₹10 lakh	₹50 lakh	₹1 crore
Investment Format	Units of the pooled fund	Direct stocks held in the client's name	Units in the pooled fund
Strategy Flexibility	Moderate-High	Very High	Very High
Liquidity	Limited (exit window-based)	Very Limited (custom exits)	Mostly closed-end, long lock-in
Tax Treatment	Fund-level (no indexation)	Investor-level capital gains	Category-dependent (pass-through in Cat I/II)
Transparency	Moderate	High (per holding shown)	Low-Moderate
Ideal For	HNIs with ₹10-50L and risk appetite	Ultra-HNIs seeking control	Institutions or HNIs with a long-term view

Where Do SIFs Invest? (Investment Strategies in India)

SEBI has clearly defined the types of investment strategies a Specialised Investment Fund (SIF) can follow, offering enhanced flexibility while keeping investor protection intact. All permitted strategies fall into three broad categories:

1. Equity-Oriented Strategies

• Equity Long-Short Fund - Minimum 80% in equities and equity-related instruments, with up to 25% unhedged short exposure via derivatives.
• Equity Ex-Top 100 Long-Short Fund - At least 65% in stocks outside the top 100 by market capitalisation; up to 25% short derivative exposure.
• Sector Rotation Long-Short Fund - 80% invested in up to four sectors, with a 25% short exposure allowed at the sector level.

2. Debt-Oriented Strategies

• Debt Long-Short Fund - Invests across various debt instruments and may take unhedged short positions through debt derivatives (typically with weekly redemption).
• Sectoral Debt Long-Short Fund - Focuses on at least two debt sectors, capped at 75% per sector, with short exposure up to 25% of NAV.

3. Hybrid Investment Strategies

• Active Asset Allocator Long-Short Fund - Dynamically allocates across equity, debt, derivatives, REITs/InvITs, and commodities, allowing up to 25% short exposure.
• Hybrid Long-Short Fund - Invests a minimum of 25% each in equity and debt, with up to 25% short exposure.

Key Points to Note:

• Each SIF can follow only one strategy, which must be clearly stated in its offer document.
• Redemption frequency varies by strategy - from daily or weekly to interval-based windows.
• Unhedged short exposure is capped at 25% of NAV across equity and debt strategies.

Liquidity & Exit Rules for SIFs

Specialised Investment Funds (SIFs) generally have lower liquidity and more restrictive exit rules compared to traditional mutual funds. These structures are designed for sophisticated investors with a higher risk tolerance and longer investment horizon.

Key Features of SIF Liquidity and Exit:

• Limited Liquidity - Unlike mutual funds that allow daily redemption, SIFs may offer redemptions only on a monthly or quarterly basis.
• Restricted Redemption - Partial redemptions may not be allowed. Investors may need to exit fully if investment value falls below ₹10 lakh or if redemption windows are limited.
• Lock-in Periods - Some SIF schemes have mandatory lock-in periods, disclosed in the Scheme Information Document (SID).
• Notice Periods - Redemptions may require prior notice of up to 15 working days, especially for non-open-ended strategies.
• Interval Investment Strategies - Subscriptions and redemptions may be allowed only during predefined intervals, not daily.
• Listing of Units - Units of closed-ended and interval SIFs are mandatorily listed on recognised stock exchanges to provide a secondary market exit route.

Takeaway:

If you're considering a SIF, be aware that liquidity is not instant. Always review the lock-in period, exit terms, redemption window, and notice period before investing.

Taxation on Specialised Investment Funds (SIFs)

Specialised Investment Funds (SIFs) are structured similarly to equity mutual funds, and their taxation broadly aligns with mutual fund regulations. Below is a clear breakdown of how capital gains are taxed:

Capital Gains Tax on SIFs

Capital Gains Type	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 12 months	15%	20%
Long-Term Capital Gains (LTCG)	More than 12 months	10%	12.50%

No Indexation Benefit: SIFs do not offer indexation benefits on long-term capital gains. This change can increase the overall tax liability, especially for long-term investors.

Risks and Returns of Specialised Investment Funds

Specialised Investment Funds (SIFs) are not low-risk products. They are designed for investors who can take higher risks in pursuit of potentially better returns than traditional mutual funds.

Key Risks:

• Market Volatility: SIFs may invest in sectors, strategies, or debt instruments that fluctuate more than standard mutual funds.
• Low Liquidity: Exits are restricted. Unlike mutual funds, SIFs do not offer daily redemption.
• Concentration Risk: Some SIFs follow thematic or focused strategies, resulting in fewer holdings and higher exposure to specific sectors.
• Delayed Reporting: Portfolio disclosures may be quarterly or semi-annual, unlike mutual funds that disclose monthly.

Expected Returns:

There is no fixed or guaranteed return from a SIF. Performance depends entirely on the chosen investment strategy.

• A credit strategy SIF may aim for annual returns of around 10-12%.
• A thematic equity strategy may target 15% or higher, but with significantly higher volatility.

Takeaway:

SIFs are suitable for HNIs and professionals who understand investment risk and seek more control and customisation in their portfolios. They are not ideal for conservative investors who prefer predictable returns and easy liquidity.

How to Invest in a Specialised Investment Fund (SIF) in India

SIFs are not available on regular investment platforms, but they are accessible through the right channels. Below is a simple step-by-step approach to investing in a SIF.

Step-by-Step Process:

• Choose an AMC Offering SIFs: Only SEBI-registered Asset Management Companies (AMCs) can launch SIF products. Select an AMC that offers SIF strategies.
• Check Your Eligibility: A minimum investment of ₹10 lakh is required (unless you are an accredited investor). These funds are designed for HNIs and professionals.
• Select the Right Strategy: Choose between equity, credit, or hybrid SIF strategies based on your risk appetite and long-term objectives.
• Complete KYC & Documentation: Standard KYC is mandatory. Income proof or net worth documents may be required, especially to qualify as an accredited investor.
• Invest & Track: After investing, review quarterly or semi-annual reports regularly. Active monitoring is important, as SIFs are not tracked daily like mutual funds.

Pro Tip:

Always invest through a licensed wealth advisor or directly via the AMC to ensure regulatory compliance, transparency, and suitability.

Who Should Consider Investing in a SIF?

Specialised Investment Funds (SIFs) are not designed for everyone. They sit between mutual funds and PMS/AIFs, catering to a specific class of sophisticated investors.

Ideal For:

Profile	Details
High Net-Worth Individuals (HNIs)	Investors with ₹10-50 lakh to deploy, who find mutual funds too restrictive but do not wish to commit ₹50 lakh or more to PMS.
Accredited Investors	Investors with proven income (₹2 crore+) or net worth (₹7.5 crore+), seeking access to alternative investment strategies.
Doctors, Entrepreneurs, Professionals	Individuals with rising wealth looking for structured, flexible, and higher-return investment strategies.
Informed Investors	Investors who understand market cycles, liquidity constraints, and long-term capital allocation.

Who Should Avoid Investing in a SIF?

• Retail investors with less than ₹10 lakh in surplus capital.
• Investors who need frequent liquidity or daily redemption options.
• Individuals unfamiliar with advanced investment strategies or market risks.

Takeaway:

If you are at a stage where your financial life needs more control, curated strategy, and long-term wealth creation - and you’ve outgrown mutual funds but aren't ready for PMS - SIF might just be your next step.

But remember: with greater flexibility comes higher responsibility. Make sure you consult with a SEBI-registered advisor or AMC before you begin.

Final Thoughts - Should You Consider a SIF?

Specialised Investment Funds are well-suited for informed HNIs who seek more flexibility than mutual funds without committing to the ₹50 lakh minimum required for PMS. With a ₹10 lakh entry point, SEBI oversight, and access to advanced strategies, SIFs strike a balanced middle ground.

They may not be suitable if you require daily liquidity or are new to market-linked investments.

To obtain more information, please reach out to us at the following numbers for any inquiries and service support.

PRITHVI MONEY IMF PVT LTD

Website: www.prithvimoney.com

Helpline: +91 7400480777 | +91 74004481777

E-Mail ID: support@prithvimoney.com | communication@prithvimoney.com

Who Should Consider Investing in a SIF?

Specialised Investment Funds (SIFs) are not built for everyone. They are positioned between mutual funds and PMS/AIFs, catering to a specific and sophisticated investor profile.

Ideal For:

Profile	Details
High Net-Worth Individuals (HNIs)	Investors with ₹10-50 lakh to invest, who find mutual funds too restrictive but do not want to commit ₹50 lakh to PMS.
Accredited Investors	Investors with proven income (₹2 crore+) or net worth (₹7.5 crore+), seeking access to alternative asset strategies.
Doctors, Entrepreneurs, Professionals	Individuals with rising wealth looking for structured, flexible, and higher-return investment opportunities.
Informed Investors	Those who understand market cycles, liquidity risks, and long-term capital allocation.

Who Should Avoid Investing in a SIF?

• Retail investors with less than ₹10 lakh in surplus investable capital.
• Investors who require frequent liquidity or daily redemption access.
• Individuals unfamiliar with advanced investment strategies or market risks.

Takeaway:

If you're at a stage where your financial life needs more control, curated strategy, and long-term wealth creation - and you've outgrown mutual funds but aren't ready for PMS - SIF might just be your next step.

But remember: with greater flexibility comes higher responsibility. Make sure you consult with a SEBI-registered advisor or AMC before you begin

Final Thoughts – Should You Consider a SIF?

SIFs are ideal for investors seeking more flexibility than mutual funds without meeting the ₹50 lakh PMS threshold. With a ₹10 lakh entry point, SEBI regulation, and access to advanced strategies, they strike a strong balance for informed HNIs.

They are not suitable if you need daily liquidity or are new to market-linked investments.