Specialised Investment Funds (SIFs): SEBI Guidelines For SIF Investments

Traders these days, following the idea of portfolio diversification, are always on the lookout for new investment options. You already know about stocks, bonds, MFs, ETFs, and even PPF. But have you explored SIFs yet? SIF stands for Specialised Investment Funds. 

These funds help fill the gap between mutual funds and portfolio management services. Moreover, SIFs give you more flexibility and choices as compared to mutual funds in India.

Today, let’s take a closer look at how SIFs work and the SEBI guidelines for SIF investments. 

What is SIF?

SIF stands for Specialised Investment Fund. It is a new asset class, introduced by SEBI. SIF has been designed to help investors who are seeking more sophisticated investment strategies.

These are properly regulated and also give you a wider range of investment options. 

SIFs are called “specialised” because they do not stick to simple stocks or bonds. Instead, they may explore aspects like private equity, hedge funds, real estate projects, venture capital, or niche industries such as renewable energy, fintech start-ups, or healthcare innovation.

What are the Advantages of SIF? 

Specialised Investment Funds (SIFs) let you invest across multiple industries, helping diversify your portfolio beyond what traditional funds allow.

• Flexible Investment Strategies: SIFs can invest in equity, debt, or a mix of both. This gives investors more control over how their money is invested.
  
• Regulatory Compliance: Even with this flexibility, SIFs follow SEBI rules, which helps protect investors.
  
• Better Portfolio Diversification: Investors can spread their money across multiple asset classes. This certainly helps in reducing the risk involved.
  
• Access to Complex Strategies: SIFs allow strategies like Equity Long-Short Funds and Sectoral Debt Funds that normal mutual funds usually don’t offer.

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SEBI Guidelines for Specialised Investment Funds (SIFs), 2025

In February 2025, SEBI introduced Specialised Investment Funds (SIFs) as a new category under the SEBI (Mutual Funds) Regulations, 1996. The framework came into effect from April 1, 2025.
SIFs allow institutional-grade strategies. These include long-short equity and debt funds within the mutual fund regulatory framework. However, they come with greater flexibility than ordinary MFs.

• SIFs stand for pooled investment vehicles that are governed by mutual fund rules but with “special features” for sophisticated strategies.
• They fill the gap between mutual funds and PMS.
  • Mutual Funds are highly regulated and retail-focused.
  • PMS is very flexible, but has a single-client focus.
  • SIFs offer flexible pooled strategies. However, they are regulated under MF norms.
• SIFs are open-ended, interval, or closed-ended.
• As part of the exit rules, closed-ended and interval schemes must be listed on stock exchanges.
• AMCs must maintain separate branding for SIFs, including a dedicated website/webpage.

Who Can Launch SIFs?

Only Asset Management Companies (AMCs) of registered mutual funds can launch SIFs. They need to follow the routes below- 

• Route 1 (Track record route):

1. AMC must have at least 3 years of operation,
2. ₹10,000 crore average AUM in the past 3 years,
3. No major SEBI regulatory action in the last 3 years.

• Route 2 (Staffing route for newer AMCs):

1. They must appoint a CIO with ≥10 years’ experience managing at least ₹5,000 crore,
2. It should have a Fund Manager with ≥3 years’ experience managing at least ₹500 crore,
3. There should be a clean regulatory record

How to Invest in a Specialised Investment Fund?

How do you start investing in the specialised investment fund?

• To invest in an SIF, as an investor, you must invest a minimum of Rs 10 lakh across all strategies.
  
• SIFs are available through Asset Management Companies (AMCs) under SEBI rules.
  
• If your investment falls below Rs 10 lakh due to redemptions, you need to redeem the entire remaining amount.

Permitted Investment Strategies

SIFs can offer one strategy per category, from the following:

(A) Equity-Oriented SIFs

1. Equity Long-Short Fund: ≥80% in listed equities; up to 25% unhedged shorts.
2. Ex-Top-100 Long-Short: ≥65% outside top 100 stocks; up to 25% shorts.
3. Sector-Rotation Long-Short: ≥80% in ≤4 sectors; up to 25% sector shorts.

(B) Debt-Oriented SIFs

1. Debt Long-Short Fund: Debt securities with shorts via exchange-traded derivatives.
2. Sectoral Debt Long-Short Fund: Debt of at least two sectors (≤75% in one sector); up to 25% shorts.

(C) Hybrid SIFs

1. Active Asset Allocator Long-Short: Dynamic allocation across equity, debt, REITs, InvITs, commodities; up to 25% shorts.
2. Hybrid Long-Short Fund: ≥25% equity & ≥25% debt, with up to 25% shorts in each.

SIF Funds vs Mutual Fund

Now let’s address the big confusion: SIF funds vs mutual funds. 

Both of these investment assets pool money from investors and are managed by professionals. However, there is a difference in the way they operate and the kind of investors they attract.

Let’s understand the basic difference between Systematic Investment Funds and Mutual Funds.

1. Investor Base
   
   • Mutual Funds are open to everyone. Retail investors in India can start with as little as ₹500 in a SIP.
     
   • SIFs: These are for professional investors, large institutions, or high-net-worth individuals (HNIs). The minimum entry ticket is high, sometimes lakhs or crores, because they are not meant for casual investing.
     
2. Scope of Investment
   
   • Mutual Funds are mostly limited to equities, debt instruments, or a mix of both. They have fixed categories like large-cap, mid-cap, debt funds, or hybrid funds.
     
   • SIFs are flexible and open. They can invest in unlisted companies, private equity deals, infrastructure projects, global hedge funds, or even distressed assets.
     
3. Regulation
   
   • In India, SEBI keeps a strict watch on mutual funds. Every detail is disclosed to protect retail investors.
     
   • SIFs are also regulated, but the rules are lighter because their investors are assumed to be financially literate and capable of assessing risks themselves.
     
4. Risk and Return
   
   • Mutual Funds generally have lower risk compared to SIFs.
     
   • SIFs are basically high-risk, high-reward investment options.

SIF vs Mutual Funds vs PMS?

What makes Specialised Investment Funds different from MFs and PMS (portfolio management services)?

SIFs are unique in terms of regulatory structure, investment flexibility, and investor eligibility.

Let us understand their difference

Final Thoughts

Specialised Investment Fund offers you a unique approach to investing. It is designed for those who want more than traditional mutual funds can offer. If mutual funds are about stability and accessibility, SIFs are about exclusivity, flexibility, and higher potential rewards. Higher risks balance all of this.

For everyday retail investors, mutual funds remain the most practical choice. But for high-net-worth individuals or institutions looking to diversify into areas like venture capital, infrastructure, or global niche sectors, SIFs are a good option.

SIF Meaning- FAQs