What is a Specialised Investment Fund (SIF)?

In 2025, SEBI created an entirely new category of investment product in India — the Specialised Investment Fund (SIF). It was designed to fill a real gap: the distance between an ordinary mutual fund (open to everyone, tightly rule-bound) and a Portfolio Management Service (PMS) (flexible and sophisticated, but with a ₹50 lakh entry barrier). The SIF sits neatly in the middle.

The short version

A SIF is a pooled investment fund, offered by eligible mutual fund houses, that can run more advanced strategies than a normal mutual fund — including limited short positions through derivatives and more dynamic asset allocation — with a minimum investment of ₹10 lakh. You buy units in the fund (you do not hold the underlying shares yourself), and it is regulated under the mutual fund framework rather than the PMS framework.

Why SEBI introduced the SIF

SEBI announced the SIF framework in February 2025, effective from 1 April 2025. The regulator recognised that a growing set of investors wanted strategies more flexible than a conventional mutual fund allows — long-short equity, hedging, dynamic allocation — but either could not, or did not want to, commit the ₹50 lakh that a PMS requires. The SIF gives that investor a regulated, pooled, professionally managed option at a ₹10 lakh entry point.

The key rules

• Minimum investment: ₹10 lakh per investor at the PAN level, across all of a fund house's SIF strategies (accredited investors may be exempt).
• Who can offer it: only eligible mutual fund houses that meet SEBI's criteria, under a distinct brand kept separate from their regular mutual fund schemes.
• Structure: a pooled vehicle — you own units, not the underlying securities (unlike PMS).
• Strategies allowed: equity-oriented, debt-oriented and hybrid strategies, including limited short exposure via derivatives and long-short approaches that regular mutual funds cannot use.
• Target investor: high-net-worth and reasonably sophisticated investors, not the mass retail segment.

SIF vs Mutual Fund vs PMS vs AIF

Here is where the SIF fits among the four main ways Indians access professionally managed investments:

Who should consider a SIF?

A SIF may suit you if you are a high-net-worth or reasonably experienced investor who wants strategy-driven, more flexible exposure than a plain mutual fund offers — but you are not ready (or willing) to put ₹50 lakh into a PMS. Because SIFs can use derivatives and short positions, they can behave very differently from a long-only mutual fund, so understanding the strategy matters more than usual.

The risks

A SIF is a market-linked product and carries market risk, like any equity or debt investment. The advanced tools a SIF can use — leverage via derivatives, short positions — can increase both the range of outcomes and the complexity. Read the strategy document carefully, understand what the manager is actually doing, and make sure it fits your goals and risk appetite before investing.

How to invest in a SIF

SIFs are offered by eligible mutual fund houses under a separate brand. You can invest through the fund house directly or via a registered distributor. If you would like help deciding whether a SIF, a mutual fund, a PMS or a different route fits your goals, you can talk to us at Baasava Hathiwala — we also maintain detailed research on Portfolio Management Services and live mutual fund data to help you compare your options.

Frequently asked questions

What is a Specialised Investment Fund (SIF)?

A SIF is a new investment category introduced by SEBI in 2025 that sits between mutual funds and PMS. It is a pooled fund, offered by eligible mutual fund houses, that can use more advanced strategies — such as long-short equity and derivatives — than a regular mutual fund, with a minimum investment of ₹10 lakh.

What is the minimum investment in a SIF?

SEBI has set a minimum investment of ₹10 lakh per investor at the PAN level, across all SIF strategies of a fund house (accredited investors may be exempt). That is far lower than the ₹50 lakh minimum for PMS, but much higher than a mutual fund, which has no minimum.

How is a SIF different from a mutual fund?

A SIF is still a pooled vehicle under the mutual fund framework, but it can use strategies a normal mutual fund cannot — including limited short positions through derivatives and more dynamic allocation. It also carries a higher minimum (₹10 lakh) and is aimed at more sophisticated investors.

How is a SIF different from PMS?

In a PMS, securities are held directly in your own demat account and the minimum is ₹50 lakh. A SIF is a pooled fund (you hold units, not the underlying shares) with a ₹10 lakh minimum, run under mutual fund regulations rather than PMS regulations.

Who should consider a SIF?

SIFs are designed for high-net-worth and reasonably sophisticated investors who want more flexible, strategy-driven exposure than a mutual fund offers, but who are not ready for the ₹50 lakh PMS ticket. As with any market-linked product, suitability depends on your goals, horizon and risk appetite.

Explore your options

Still weighing make-money speculation against long-term wealth building? Try our interactive Make Money or Build Wealth tool, compare PMS strategies, or create a free financial plan.

This article is for education and information only and is not investment advice or a recommendation. SIFs, mutual funds, PMS and AIFs are subject to market risks; please read all scheme-related documents carefully and consider your own circumstances before investing. See our disclaimer.