SIF: between a mutual fund and a PMS

A Specialized Investment Fund is a category of investment product that SEBI introduced under the Mutual Fund Regulations with effect from 1 April 2025. SIFs are launched by mutual fund asset management companies and sit between regular mutual funds and Portfolio Management Services: they can follow more flexible strategies than a mutual fund, including limited short positions through derivatives.

The minimum is Rs 10 lakh per investor, measured at PAN level across the SIF strategies of an asset management company. SEBI has exempted accredited investors from this minimum. Systematic options such as SIP, SWP and STP can be used as long as the overall threshold is maintained.

SEBI has specified equity-oriented, debt-oriented and hybrid strategies, such as equity long-short, equity ex-top-100 long-short, sector rotation long-short, debt long-short, and active asset allocator long-short. Each asset management company can offer one strategy in each permitted category.

A mutual fund has no such minimum and may use derivatives mainly for hedging. A SIF needs Rs 10 lakh and may take limited unhedged short exposure through derivatives. PMS needs Rs 50 lakh and holds securities in your own demat account. An AIF needs Rs 1 crore and is a privately pooled fund. Costs, liquidity and taxation differ across the four.

SIFs can use derivatives and short positions, so losses can be larger and faster than in a regular mutual fund. Some strategies allow redemption only at intervals rather than daily. Strategies are new and have limited track record. Please read the investment strategy information document and the risk band before you invest.

PCJ Holdings is an AMFI-registered mutual fund distributor (ARN-63632). SIFs may be distributed only by distributors who hold the additional certification prescribed for SIFs. Speak to our team to know which SIF strategies we can currently help you with. PCJ does not manage any SIF, does not give investment advice and does not assure any return.