SIF & PMS
What is a SIF? Specialised Investment Funds explained
SEBI’s newest investment category sits between mutual funds and PMS. How SIFs work, the strategies they may use, and who they suit.
By Anudeep Nadendla · 29 October 2026 · 3 min read
A Specialised Investment Fund, or SIF, is an investment category introduced by SEBI in 2025. SIFs are run by mutual fund houses, but they may use strategies that regular mutual fund schemes cannot, such as taking limited short positions. They sit between mutual funds and Portfolio Management Services (PMS).
Why SIFs were created
Before SIFs, an investor who wanted more than long-only investing had to look at PMS, with a ₹50 lakh minimum, or Alternative Investment Funds, with a ₹1 crore minimum. SIFs open some of these strategies at a lower entry point, inside the familiar mutual fund framework, with SEBI’s rules on regulation and disclosure.
Key features
- Minimum investment: ₹10 lakh per investor (by PAN), across all the SIF strategies of a fund house
- Short positions: a strategy may take unhedged short positions through derivatives of up to 25% of its net assets
- Who offers them: only fund houses that meet SEBI’s eligibility conditions, under a brand kept separate from their regular schemes
- Redemption: strategies can be open-ended, closed-ended or interval, so how often you can redeem varies, and some need advance notice
- Tax: taxed like mutual funds, depending on how much of the strategy is in equity
The strategies allowed
SEBI allows SIF strategies in three groups:
| Group | Strategy | In short |
|---|---|---|
| Equity | Equity long-short | Mostly equity, with some short positions |
| Equity | Equity ex-top 100 long-short | Equity outside the 100 largest companies, with some short positions |
| Equity | Sector rotation long-short | Moves between a few sectors, with short positions at sector level |
| Debt | Debt long-short | Debt across maturities, with short positions through debt derivatives |
| Debt | Sectoral debt long-short | Debt from two or more sectors, with short positions |
| Hybrid | Active asset allocator long-short | Moves between equity, debt, REITs, InvITs and commodities |
| Hybrid | Hybrid long-short | A mix of equity and debt, with some short positions |
Mutual fund, SIF or PMS?
| Mutual fund | SIF | PMS | |
|---|---|---|---|
| Minimum | Small amounts, SIP possible | ₹10 lakh | ₹50 lakh |
| What you hold | Units of a pooled fund | Units of a pooled fund | Shares in your own demat account |
| Tax | On your gains when you redeem | Like mutual funds | On each trade, in your hands |
| Regulated by | SEBI | SEBI | SEBI |
Who might consider a SIF
- Investors with ₹10 lakh or more who already hold a core mutual fund portfolio
- Investors who understand that short positions and derivatives bring risks of their own
- Investors with a time frame of three years or more
SIFs are newer and more complex than regular mutual funds. Read the strategy’s Investment Strategy Information Document before investing, and treat a SIF as one part of a portfolio, not all of it.
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