The SIF playbook

Summary: In 2025, SEBI created a new investment class that sits between mutual funds and the Rs 50 lakh world of PMS — one that can bet against stocks, concentrate on a few sectors and set its own exit windows, all for a Rs 10 lakh entry. A guide to what SIFs are, how their debut year went and what to ask before committing.

Summary: In 2025, SEBI created a new investment class that sits between mutual funds and the Rs 50 lakh world of PMS — one that can bet against stocks, concentrate on a few sectors and set its own exit windows, all for a Rs 10 lakh entry. A guide to what SIFs are, how their debut year went and what to ask before committing. For most of us, mutual funds are the obvious choice, and for good reason. They’re cheap, diversified, liquid and refreshingly hands-off. You hand your money to a fund manager, they invest it and you get on with your life. But mutual funds play one game, and only one: buy what’s expected to rise, and hold. They can’t profit when a stock falls. They can’t concentrate on a handful of sectors (barring sectoral and thematic categories). And they can’t move freely across asset classes. So what about investors who want more, the ones who’d like a manager who can bet against a stock, not just on it? Until recently, there was only one door: Portfolio Management Services (PMS). The catch was the steep entry price of Rs 50 lakh. That changed in 2025, when SEBI rolled out a new category called ‘Specialised Investment Funds’, or SIFs. Sitting neatly between mutual funds and PMS, SIFs ask for Rs 10 lakh to start. The wrapper looks like a mutual fund, but it has sharper teeth. SIFs can concentrate on a few sectors, move freely across asset classes and even make money when stocks fall, through long-short equity strategies. So the question for investors has now shifted. It’s no longer “How can I afford these strategies?” but “Should I pay for them at all?” Before you decide, read our cover story, as we unpack what SIFs are, how they differ from mutual funds, the strategies they pursue, how they fared in their debut year and the questions worth asking before you commit fresh money. What exactly are SIFs? Specialised Investment Funds (SIFs) are a new investment class whose objective is to bridge the gap between plain-vanilla mutual funds and portfolio management services (PMS). Effective April 1, 2025, SIFs are subject to SEBI regulations, just like your good-old mutual funds. They can only be launched by SEBI-registered fund houses, operate under trustee supervision and are bound by disclosure rules.  The different ways of launching SIFs An AMC can introduce SIFs through two routes: the track record route or the talent route. Moreover, no regulatory action should have been taken against the sponsor or the AMC under the relevant section of the SEBI Act during the last three years. The intent is clear: only established institutions or managers with a proven track record can helm complex vehicles like SIFs. A unique identity You must have noticed that SIFs don’t carry the brand name and logo of the fund houses that launched them. Names such as Qsif, Altiva, Magnum, Arudha and ISIF come to mind. That’s because they have been directed to have their own distinct identity, separate from the AMC’s mutual fund business. While it can lean on its parent’s name for the first five years, after that, a SIF needs its own label. This is because SEBI doesn’t want investors to confuse them with the mutual funds they are already familiar with. What makes SIFs different from mutual funds? Though SIFs are bound by the same regulations as mutual funds, the similarity ends there.  Three freedoms separate a SIF from the funds you already own. #1 They can go short Most mutual funds are long-only, investing in securities with the expectation that their prices will rise. But SIFs can also take short positions: limited bets, made through derivatives such as futures and options, that a security will fall.  However, here’s something many investors may not know: mutual funds use derivatives too. Yet, the difference lies in how they use the derivatives. A mutual fund may use derivatives as a hedge, i.e., to protect its holdings against a fall or for portfolio rebalancing. While SIFs can also hedge in the same way, they are also allowed to place an outright or ‘naked’ short: a bet that a

This article was originally published on July 01, 2026.