Confused about SIFs? You’re not alone. Specialized Investment Funds (SIFs) are the newest asset class launched by SEBI in 2025, designed to fill the gap between regular mutual funds and Portfolio Management Services (PMS) . If you have ₹10 lakh or more to invest and want strategies like long-short equity or sector rotation, SIFs might be for you. Let’s break down everything—minimum investment, returns, risks, time horizon, and more—in plain English.

🧩 What is a Specialized Investment Fund (SIF)?

A SIF is a new category of investment vehicle introduced by SEBI effective April 1, 2025. It allows Asset Management Companies (AMCs) to offer strategy-intensive schemes with greater flexibility than traditional mutual funds . Think of it as a bridge:

SIFs are regulated under the SEBI Mutual Fund Regulations, not as AIFs or PMS, so they offer better transparency and standardization . By December 2025, SIFs had already attracted over ₹4,892 crore in assets and 20,779 folios .

💰 Minimum Investment: The ₹10 Lakh Rule

The most important rule: you must maintain at least ₹10 lakh invested across all SIF strategies of one AMC at the PAN level . This is not per scheme—it’s aggregate. Key details:

• If you invest via SIP, STP, or SWP, the total commitment must still meet ₹10 lakh . Minimum SIP amount can be as low as ₹10,000, but cumulative must hit the threshold .
• Accredited investors are exempt from this ₹10 lakh rule .
• What happens if value falls below ₹10 lakh? If it’s due to market fluctuations, you’re fine. But if you actively redeem and drop below, AMCs will freeze your units and give you 30 days to top up. If you don’t, units are auto-redeemed .

📊 Returns: What Can You Expect?

Returns depend entirely on the strategy. Since SIFs are new (launched mid-2025), long-term track records don’t exist yet . Here’s what early data shows:

Important: These are early days, and markets have been choppy. Long-short strategies aim to generate positive returns even in falling markets, but they can also underperform . Don’t chase past returns—understand the strategy.

Hybrid SIFs like Edelweiss Altiva Hybrid Long Short Fund raised ₹228 crore in December 2025, showing strong investor interest .

🎯 Risk Profile: Who Is It For?

SIFs are not for beginners. SEBI classifies them for “semi-sophisticated investors” . Here’s the risk breakdown:

You should consider SIFs only if: you have high risk tolerance, understand derivatives and shorting, and have at least ₹10-20 lakh to deploy. They’re designed for investors who find mutual funds too restrictive but don’t need full PMS customization .

⏳ Time Horizon: How Long Should You Stay?

Time horizon varies by strategy:

• Equity long-short SIFs: Minimum 3–5 years. Short-term performance can be volatile; give the strategy time to play out .
• Hybrid SIFs: 3–5 years. Balanced approach may smooth returns.
• Debt SIFs: 1–3 years, depending on duration.

Also note: many SIFs are interval funds—you can redeem only on specific dates (e.g., every Monday/Wednesday) . Some may have notice periods up to 15 days . Check liquidity before investing.

📋 Types of SIF Strategies (Allowed by SEBI)

SEBI has approved several strategy templates. Here’s a quick overview based on Kotak MF’s classification :

Each strategy has a risk band (1 to 5) disclosed in the Investment Strategy Information Document (ISID) .

📉 Current Performance & Investor Interest

SIFs have seen robust early adoption:

• December 2025 inflows: ₹1,933 crore, led by hybrid strategies (₹1,571 crore) .
• Total AUM (Dec 2025): ₹4,892 crore .
• Folios: 20,779 as of Dec 2025 .
• Major players: Quant, SBI, Edelweiss, ICICI Prudential, 360 ONE, ITI .

However, early performance has been muted due to market volatility. For example, long-short equity SIFs have delivered negative absolute returns since inception . This is normal for a new strategy—don’t expect miracles in the first six months.

🔐 Liquidity & Exit Rules

Liquidity in SIFs is more restricted than open-ended mutual funds:

• Open-ended SIFs: Daily redemption possible (equity strategies).
• Interval SIFs: Redemption on specified days (e.g., twice a week, weekly, monthly) .
• Notice periods: AMCs can require up to 15 working days’ notice for redemptions .
• Exit load: For Edelweiss Altiva Hybrid, exit load of 0.50% if redeemed within 180 days; nil after .

Also, remember the ₹10 lakh minimum—if your redemption causes the remaining balance to fall below, it triggers an “active breach” and you may be forced to redeem fully .

📝 Taxation of SIFs

Good news: SIFs are taxed like mutual funds, not like PMS or AIFs .

• Equity-oriented SIFs (≥65% equity): LTCG (>12 months) taxed at 12.5% above ₹1.25 lakh; STCG (≤12 months) at 20%.
• Debt-oriented SIFs (<65% equity): LTCG (>36 months) taxed at 20% with indexation; STCG (≤36 months) as per income slab.
• Hybrid SIFs: Tax treatment depends on equity exposure—if ≥65% equity, treated as equity fund.

⚖️ Who Should Invest? (And Who Should Not)

🏁 How to Choose a SIF

1. Read the ISID carefully—it explains strategy, risks, and scenario analysis (optimistic, median, pessimistic) .
2. Check the risk band (1 to 5). Equity long-short is typically band 5 .
3. Understand the short strategy: Is it sector rotation? Ex-top 100? What’s the benchmark?
4. Look at fund manager experience—SEBI mandates at least 3 years’ experience for SIF fund managers .
5. Evaluate liquidity—interval funds may suit long-term goals better.
6. Don’t chase early returns; SIFs are new and performance will mature over cycles .

📌 Key SEBI Rules at a Glance

• Min investment: ₹10 lakh aggregate at PAN level (across all SIF strategies of an AMC) .
• Short exposure limit: Max 25% of net assets .
• Diversification: Same as mutual funds—max 10% in a single company equity, 20% in AAA-rated debt of one issuer, etc. .
• Risk bands: 1 (lowest) to 5 (highest), reviewed monthly .
• Redemption notice: Up to 15 working days .
• Eligibility for AMCs: 3 years existence + ₹10,000 Cr AUM or experienced CIO + fund manager .