In April 2025, SEBI quietly created something the Indian
investment industry had never had before.
A product that sits between a mutual
fund and a PMS.
That earns daily NAV like a mutual fund. That can go short -
something no mutual fund is allowed to do.
And that starts at Rs 10 lakh, not
Rs 50 lakh.
It's called a Specialised Investment Fund - SIF.
By February 2026, Rs 9,711 crore had already moved into SIF
funds - in under 8 months,
in a market that had gone nowhere for a year.
That's
not hype. That's informed money making a considered move.
Here's what you need to know.
The gap SIF fills
India's investment product landscape has always had a
missing rung.
On one end, mutual funds - accessible from Rs 500, highly
regulated, but limited to long-only strategies with no ability to profit from
falling markets. On the other end, PMS - far more flexible, but requiring Rs 50
lakh minimum and offering no daily NAV.
Between Rs 10 lakh and Rs 50 lakh, there was nothing. If you had Rs 15 lakh you wanted managed professionally with more sophistication than a mutual fund, your options were limited to mixing funds yourself or waiting until you had more capital.
SIF was built for exactly that gap.
What SIF can do that MF cannot
The single most important difference is the ability to go short.
A mutual fund can only profit when markets rise - or at best stay flat through arbitrage. It cannot take positions that benefit from falling prices.
SIF can. Up to 25% of net assets can be deployed in short
positions through derivatives.
This is not speculation - it's risk management.
Think of it like insurance on your portfolio.
When markets fall, the short
positions can offset some of the decline in the long positions.
The practical result: SIF strategies are designed to generate returns across all three market conditions - rising, flat, and falling - rather than only when markets go up.
The three market conditions
Rising market: Long positions generate returns. Short positions create a small drag - that's the cost of the protection. A well-managed SIF might return 10-13% in a rising market vs 15% for a pure equity fund.
Flat market: Long-only funds earn close to zero. SIF strategies using arbitrage, covered calls, and derivatives can generate 3-6% even when the Nifty doesn't move.
Falling market: Long-only funds absorb the full decline - if markets fall 15%, your fund falls 15%. A SIF with short positions can cushion that fall significantly, potentially limiting the drawdown to 8-12%.
The structure and access
Minimum investment: Rs 10 lakh per fund
NAV: Published daily (like a mutual fund, unlike PMS)
Regulation: SEBI-registered AMCs only (currently 9 AMC families have launched SIF schemes)
Number of live funds: 27 funds across 5 strategy categories as of June 2026
AUM: Rs 9,711 crore as of February 2026
The tax advantage
This is where SIF becomes particularly interesting for HNI investors.
Group A SIF funds (equity-oriented, maintaining at least 65% gross equity exposure) are taxed at:
- LTCG: 12.5% after 12 months of holding
- Rs 1.25 lakh annual LTCG exemption applies
- STCG: 20% if sold within 12 months
Compare this to a bank FD, where interest is taxed at your full slab rate every year - 30% for most HNI investors - regardless of whether you've withdrawn the money or not.
For a 30% bracket investor, an FD at 6.25% delivers just 4.4% post-tax. A conservative Group A SIF targeting 9% pre-tax - held for 12 months and managed with annual tax harvesting of the Rs 1.25 lakh exemption - delivers approximately 8.5% post-tax.
Over 10 years on Rs 25 lakh, that difference compounds to Rs 18.4 lakh.
Who SIF is for
SIF is appropriate if you meet all of these:
- Capital of Rs 10 lakh or more to allocate
- Investment horizon of 2-3 years
- Willingness to accept market-linked returns
- Seeking more sophistication than a mutual fund but not yet at PMS scale
SIF is not appropriate if:
- You're investing for the first time
- You need daily liquidity without any redemption structure
The AND Fintech SIF Dashboard
We track all 27 live SIF funds monthly - ranked by 3M returns.
Covering strategy clarity, fund manager track record, tax
group, liquidity terms, expense ratio, and AMC credibility.
The SIF DASHBOARD is live at and updated every month.
We've also built two free resources for investors evaluating SIF:
- SIF TAX Guide - Complete fund-by-fund tax group mapping, the Rs 1.25L harvesting strategy explained, and the numbers for your specific bracket.
- SIF Comprehensive Investor Guide - Everything in this post and more - all 5 SIF strategy categories explained, how to evaluate a SIF fund, what questions to ask your distributor, and a framework for deciding what allocation makes sense. [Link to SIF guide page]
Both are free. Both are delivered to your inbox.
A note on track record
SIF launched in October 2025. The category is 8 months old. There is no 3-year or 5-year track record to evaluate. This is a genuine limitation and should be factored into your decision. Early adopters of any new product category carry the uncertainty of limited history. The structural logic - long-short capability, tax efficiency, daily NAV, SEBI regulation - is sound. But past data to validate execution is limited.
For investors comfortable with this context, SIF represents a genuinely new tool in the Indian investment kit. For investors who prefer to wait for a track record, that's a reasonable position - the category will be richer in data by 2027-28.
Book a 30-minute conversation with Dwipa
SIF investments are subject to market risk. Returns are not guaranteed. Tax calculations shown use base rates excluding cess and surcharge for illustration simplicity. AND Fintech is a SEBI-registered mutual fund distributor (ARN-301536) and SIF distributor. Please consult a qualified financial advisor and CA before investing.
Dwipa Shah | AND Fintech | NISM Certified: Series 5A, 13, 19A, 21A | andfintech.in