🎯 SEBI’s New Asset Class
Specialized Investment Funds (SIFs)
On February 27, 2025, SEBI issued a circular introducing Specialized Investment Funds (SIFs)—a novel investment category positioned between traditional mutual funds and Portfolio Management Services (PMS), effective April 1, 2025. Aimed at sophisticated and high-net-worth investors, SIFs offer more advanced strategies while maintaining regulatory oversight.
✅ Who Can Launch & Invest in SIFs?
🏦 AMC Eligibility (Two Routes)
Track-Record Route
- AMCs with 3+ years of operation and avg AUM ≥ ₹10,000 crore
- Clean SEBI regulatory history
Experience Route
- CIO with 10+ years managing ≥ ₹5,000 crore
- Fund manager with 3+ years managing ≥ ₹500 crore
👤 Investor Eligibility
- Minimum investment: ₹10 lakh per PAN (exempt for accredited investors)
- Targeted at HNWIs, family offices, institutional investors, NRIs
🧩 Investment Strategies & Product Structure
Asset Class & Strategy Breakdown
SEBI allows one strategy per asset class:
Equity Strategies:
- Long‑short equity (80%+ equity; ≤25% unhedged derivatives)
- Equity Ex‑Top100 long‑short (65%+ equity; ≤25% shorts)
- Sector Rotation long‑short (80%+ sectoral; ≤25% shorts)
Debt Strategies:
- Debt long‑short
- Sectoral debt long‑short
Hybrid Strategies:
- Hybrid long‑short
- Active asset allocation long‑short
Fund formats: Open-ended, close-ended, or interval
- Close-ended units must be listed on exchanges for liquidity
- Unhedged derivative exposure up to 25% of NAV
🛡️ Risk Controls & Compliance
Investment Restrictions
- Equity: Limited single‐stock exposure (≤15% NAV)
- Debt: AAA-rated ≤20%, AA ≤16%, A & below ≤12%; Sector cap 25%
Transparency & Branding
- Distinct brand identity, logo, and website—separate from mutual fund names for five years
- Detailed portfolio disclosures: top 10 holdings, turnover, derivatives usage, fees, NAV methodologies
- AMCs must share bi-monthly portfolio updates
- Distributors require NISM Series XIII (Derivatives) certification
💰 Fees & Taxation
Fee structure aligned with mutual fund regulations
Taxation:
- Equity SIFs: 20% STCG (<1 yr) / 12.6% LTCG (>1 yr)
- Debt/hybrid: taxed per investor’s slab rate
📩 Operational Process
- SEBI has provided standardized application format and Investment Strategy Information Document (ISID) templates
- Performance disclosures mandated:
- Inception <1 yr: report absolute returns
- >1 yr: show 1‑, 3‑, 5‑yr returns + past‑5‑yr bar chart
🧭 Final Take
SIFs mark a pivotal shift in India’s investment products—offering sophisticated, active management tools under a regulated structure and with mutual fund-level oversight. With qualified AMCs, minimum ₹10 lakh investment, and 25% unhedged derivative exposure, SIFs are designed for risk-savvy investors looking for nuanced strategies between traditional funds and PMS.