SIFs
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SIF vs PMS vs AIF: Specialised Investment Funds
A Specialized Investment Fund (SIF), also written specialised investment fund, is a type of mutual fund under SEBI rules in force since 1 April 2025. SIF funds may take unhedged short positions through derivatives, up to 25% of net assets. The minimum is ₹10 lakh per PAN, against ₹50 lakh for PMS and ₹1 crore for AIFs. Accredited investors are exempt from all three; for PMS, subject to disclosure and agreed terms.
Last reviewed: 12 October 2026. Sources for the rules and figures are listed at the end of this page.
Accrue Finvisor LLP · ARN-162637 · AMFI Registered Mutual Fund Distributor & SIF Distributor
Investments in Specialized Investment Fund involves relatively higher risk including potential loss of capital, liquidity risk and market volatility. Please read all investment strategy related documents carefully before making the investment decision.
SIFs held ₹38,286.94 crore in net assets across 34 schemes at the end of September 2026.
Source: AMFI, SIF Monthly Report for September 2026, grand total row. Net assets under management as on 30 Sep 2026. Read 12 Oct 2026.
SIF vs Mutual Fund vs PMS vs AIF.
SEBI created the SIF to bridge a gap in portfolio flexibility between mutual funds and PMS (circular of 27 February 2025, paragraph 3). Each row below comes from SEBI’s own text. The last column gives the paragraph and the date of that text; all were read on 12 October 2026.
| Point | Mutual Fund | SIF | PMS | AIF (Cat III) | Source and date of the text |
|---|---|---|---|---|---|
| Rulebook | SEBI (Mutual Funds) Regulations, 2026 | The same Regulations (Chapter IX) and Chapter 21 of SEBI’s Master Circular for Mutual Funds | SEBI (Portfolio Managers) Regulations, 2020 | SEBI (Alternative Investment Funds) Regulations, 2012 | Source 4, reg. 2(1)(gg) and 2(1)(ww) (to 7 Jul 2026); source 3, Chapter 21 (20 Mar 2026); source 5 (to 3 Sep 2025); source 6, reg. 3(4)(c) (to 14 Jul 2026) |
| Minimum investment | Set in each scheme’s offer document | ₹10 lakh per investor, at PAN level, across all the SIF’s investment strategies. Accredited investors exempt | ₹50 lakh per client. Accredited investors exempt, subject to disclosure and agreed terms | ₹1 crore per investor (₹25 lakh for employees and directors of the fund or its manager). Accredited investors exempt | Mutual fund: source 3, scheme offer-document format, row “Minimum amount for purchase/redemption/switches” (20 Mar 2026). SIF: source 4, reg. 49(1) (to 7 Jul 2026) and source 3, para 21.4.1; PMS: source 5, reg. 23(2) (to 3 Sep 2025). AIF: source 6, reg. 10(c) (to 14 Jul 2026) |
| How the money is held | Pooled fund set up as a trust. Investors buy units; NAV is computed daily | Pooled, with units and NAV. A SIF is a mutual fund under the Regulations | Discretionary PMS: each client’s funds are managed individually and independently, not in the manner of a mutual fund | Pooled. Units are issued to investors | Source 4, reg. 2(1)(gg), 2(1)(ww) and 43 (to 7 Jul 2026); source 5, reg. 23(1) (to 3 Sep 2025); source 6, reg. 10(a) (to 14 Jul 2026) |
| Derivatives and short positions | May deal in derivatives on a recognised stock exchange, within the framework SEBI sets | Unhedged short exposure through derivatives, up to 25% of net assets, in addition to derivatives used for hedging and portfolio rebalancing | Derivatives are allowed. The portfolio manager shall not leverage clients’ portfolios for investment in derivatives | Defined as funds that employ diverse or complex trading strategies and may employ leverage, including through listed or unlisted derivatives | Source 4, reg. 41(6) (to 7 Jul 2026); source 3, paras 21.3.1 and 21.6.1(a) (20 Mar 2026); source 5, reg. 24(7) and 24(11) (to 3 Sep 2025); source 6, reg. 3(4)(c) (to 14 Jul 2026) |
| Borrowing and leverage | No borrowing except for temporary liquidity needs: up to 20% of net assets, for up to six months | Cumulative gross exposure (equity, debt, derivative positions, repo, credit default swaps) capped at 100% of the net assets of the investment strategy | The portfolio manager shall not borrow funds or securities on behalf of the client | May engage in leverage or borrow, with the investors’ consent and within a maximum limit set by SEBI | Source 4, reg. 42(1) (to 7 Jul 2026); source 3, para 21.6.1(e) (20 Mar 2026); source 5, reg. 23(8) (to 3 Sep 2025); source 6, reg. 18(c) (to 14 Jul 2026) |
For educational and illustrative purposes only. Features vary by scheme and current regulations. Not a recommendation of one vehicle over another. Tax laws are subject to change; consult your tax adviser. For the AIF column, see Accrue’s AIF page →
The ₹10 lakh minimum, in SEBI’s words.
Two sentences from SEBI’s circular of 27 February 2025, quoted as printed.
“the SIF shall not accept from an investor, an investment amount less than ten lakh rupees across all investment strategies in the manner as may be specified by the Board; provided that the requirement of minimum investment amount shall not apply to an accredited investor.”SEBI circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/26, 27 February 2025, paragraph 4.1 (read the circular)
“The AMC shall ensure that an aggregate investment by an investor across all investment strategies offered by the SIF, at the Permanent Account Number (‘PAN’) level, is not less than INR 10 lakh (hereinafter referred to as the ‘Minimum Investment Threshold’).”The same circular, paragraph 4.1.1, as restated in SEBI circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/53 of 9 April 2025, paragraph 2.2 (read the clarification)
In plain words:
- The ₹10 lakh is counted at PAN level, across all the investment strategies of the SIF.
- It counts SIF investments only, not the investor’s regular mutual fund schemes with the same AMC (Master Circular, para 21.4.2).
- Accredited investors are exempt. The AIF Regulations define an accredited investor as a person who holds a certificate of accreditation from an accreditation agency and meets the income or net-worth tests (regulation 2(1)(ab)). Certain institutions are deemed accredited and need no certificate: the Central Government and the State Governments, developmental agencies set up under the aegis of the Central Government or the State Governments, funds set up by the Central Government or the State Governments, qualified institutional buyers, Category I foreign portfolio investors, sovereign wealth funds, multilateral agencies and any other entity the Board specifies (proviso to regulation 2(1)(ab)). The 9 April 2025 circular also exempts the mandatory investments that AMCs make for their designated employees.
- If the value falls below ₹10 lakh only because the NAV falls, that is not a breach. The investor may then redeem only the whole remaining amount (para 21.4.5).
- If an investor’s own redemption takes the holding below ₹10 lakh, the AMC freezes the units and gives 30 calendar days’ notice. If the holding is not restored, the units are redeemed automatically (para 21.4.4).
Where the rule is found in current SEBI text: SEBI has moved the text of the 2025 circular into Chapter 21 of its Master Circular for Mutual Funds of 20 March 2026, where the minimum is paragraph 21.4.1 (SEBI confirmed this in its circular of 21 July 2026). The Regulations in force are the SEBI (Mutual Funds) Regulations, 2026, in force from 1 April 2026, where the minimum and the accredited-investor exception are regulation 49(1).
Can NRIs invest in a SIF?
SEBI’s SIF rules do not bar non-residents, and a SIF is a mutual fund under SEBI’s Regulations. Each AMC states in its offer document who can invest.
SEBI’s SIF provisions (Chapter IX of the SEBI (Mutual Funds) Regulations, 2026, and Chapter 21 of the Master Circular for Mutual Funds) do not mention residency, and SEBI’s format for a SIF offer document (the Investment Strategy Information Document, format 5D) has a taxation table with a column for non-resident investors. RBI’s rules for NRIs and OCIs refer to units of mutual funds: Schedule III, Part B, of FEMA notification 395/2019-RB says the sale proceeds (net of taxes) of units of mutual funds may be remitted outside India, or credited to an account under the Foreign Exchange Management (Deposit) Regulations, 2016, at the NRI or OCI investor’s option.
Whether a given AMC accepts an NRI is stated in that AMC’s Investment Strategy Information Document, in its “Who can invest” and “Who cannot invest” rows (SEBI format 5D).
Account route
NRE or NRO
Same account structure as mutual funds. NRE investments are fully repatriable; NRO is subject to limits.
Tax treatment
TDS + DTAA
TDS is deducted at source. DTAA provisions between India and country of residence may reduce effective tax rates.
Why SIFs matter.
Four reasons SIFs add something a portfolio does not have.
01
A portfolio can now work in both directions
A long-only mutual fund makes money mainly when markets rise. SIFs can take short positions — giving the fund manager a tool to potentially benefit when markets fall. Not a guarantee. A capability a portfolio currently lacks.
02
₹10 lakh entry — not ₹1 crore (AIF Category III)
Long-short strategies were Cat III AIF territory. SIFs bring this capability into the mutual fund framework at a fraction of the commitment. ₹10 lakh per PAN per AMC.
03
Taxed like a mutual fund
SIFs follow mutual fund tax rules. Subject to current tax law.
04
Long and short positions in one structure
Typical portfolios separate growth from preservation. SIFs combine long positions for upside with short positions for downside management — both in a single SEBI-regulated vehicle.
What SIFs can and cannot do.
Understanding the boundaries is the first filter before any decision.
What SIFs can do
- Take short positions via exchange-traded derivatives (up to 25% of NAV)
- Run long-short strategies across equity, debt, or hybrid mandates
- Operate as pooled, NAV-based, regulated vehicles
- Provide mutual fund-style taxation
- Accept investments from ₹10 lakh per PAN per AMC
- Invest in REITs and InvITs within prescribed limits
What SIFs cannot do
- Use leverage — gross exposure is capped at 100% of net assets
- Invest in unlisted equity shares: equity and debt investments must be in listed or to-be-listed securities, except unlisted government securities, unlisted money market instruments other than commercial paper, and unlisted non-convertible debentures to the extent SEBI specifies (SEBI (Mutual Funds) Regulations, 2026, Sixth Schedule, para 1)
- Customise mandates per investor (unlike PMS)
- Guarantee downside protection — the fund can lose money on both long and short positions
- Offer more than one strategy per category per AMC
Seven SEBI-defined SIF strategies.
SEBI defines the universe. Three categories. Seven mandates.
Equity
Equity Long-Short
Minimum 80% in equity. Long positions in stocks expected to appreciate; short positions via derivatives in those expected to decline. Returns depend on the fund manager’s stock selection on both sides.
Key risk: Short position timing and cost
Equity
Equity Ex-Top 100 Long-Short
Minimum 65% in equity outside the top 100 by market capitalisation. Long-short applied to mid- and small-cap stocks. Higher potential return but also higher volatility and lower derivative liquidity for smaller names.
Key risk: Derivative liquidity constraints
Equity
Sector Rotation Long-Short
Minimum 80% in equity across a maximum of four sectors. Goes long on sectors expected to outperform, short on sectors expected to lag. Requires sector-timing skill — a different capability from stock selection.
Key risk: Sector-timing is rare and hard to assess
Debt
Debt Long-Short
Long positions in debt instruments across various durations, short via exchange-traded interest rate derivatives. Primarily a duration and yield-curve play. Relevant in volatile rate environments.
Key risk: Interest rate derivative liquidity
Strategy descriptions are for educational purposes. Not all strategies are available from all AMCs. Please read the scheme information document (ISID) before investing.
A flexibility a portfolio has never had.
Most of what sits in a typical HNI portfolio — mutual funds, PMS, direct equity — is structurally long-only. These holdings are built to participate in rising markets. In declining markets, they decline with the index. There is no mechanism to benefit from the decline.
SIFs add a different mandate — the ability to take short positions. The long-short structure adds a tool that the rest of the portfolio does not have: a mandate to seek returns in both directions.
Key risks before investing in SIFs.
SIFs introduce a new regulatory category. They carry complexities worth understanding in detail.
Short positions can lose money
“Long-short” does not mean “hedged.” A fund can lose on both sides — longs that fall and shorts that rise. Being short a stock that rallies 30% is a direct loss for the investor.
Limited track record
AMFI’s SIF monthly reports start in October 2025. No multi-cycle data. No evidence of how SIF strategies behave in a sharp correction, prolonged bear market, or liquidity crisis.
Manager skill is different
Most Indian fund managers spent their careers long-only. The skill to manage short positions is different.
AUM capacity matters
Derivative markets in India have depth constraints, particularly for single-stock derivatives outside the top 50–100 names. A strategy that works at ₹500 crore may struggle at ₹5,000 crore.
FOR INVESTORS EVALUATING SIFS
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Frequently asked questions about SIFs.
What is a Specialized Investment Fund (SIF)?
A SEBI-regulated, pooled vehicle under Chapter IX of the SEBI (Mutual Funds) Regulations, 2026. Structurally a mutual fund — NAV-based, AMC-managed — but with the ability to take unhedged short exposure through derivatives (up to 25% of net assets). Minimum ₹10 lakh per PAN; accredited investors are exempt.
How is a SIF different from PMS or AIF?
SIFs are pooled and NAV-based. PMS (₹50L min) offers individual stock ownership. AIFs (₹1Cr min for Cat III) offer wider flexibility including leverage. SIFs sit inside the mutual fund framework, under Chapter IX of the SEBI (Mutual Funds) Regulations, 2026, with enhanced mandates.
What is the minimum investment?
₹10 lakh per PAN, counted across all investment strategies of the SIF. Accredited investors are exempt. Source: SEBI (Mutual Funds) Regulations, 2026, regulation 49(1), and Master Circular for Mutual Funds, paragraph 21.4.1.
Answers are for general information and educational purposes only. They do not constitute personalised investment advice. Mutual fund investments are subject to market risks; please read all scheme-related documents carefully. Past performance is not indicative of future returns. Consult a SEBI-registered investment adviser for personalised guidance.
Where these rules and figures come from.
Last reviewed 12 October 2026. Every link below was opened on that date.
- SEBI circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/26, 27 February 2025, “Regulatory framework for Specialized Investment Funds (‘SIF’)”. sebi.gov.in
- SEBI circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/53, 9 April 2025, “Clarification on Regulatory framework for Specialized Investment Funds (‘SIF’)”. sebi.gov.in
- SEBI Master Circular for Mutual Funds, 20 March 2026, Chapter 21 (Specialized Investment Fund). sebi.gov.in
- Securities and Exchange Board of India (Mutual Funds) Regulations, 2026, in force from 1 April 2026, amended up to 7 July 2026. sebi.gov.in
- Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020, amended up to 3 September 2025. sebi.gov.in
- Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, amended up to 14 July 2026. sebi.gov.in
- SEBI circular HO/24/13/17(1)2026-IMD-POD-1/I/16895/2026, 21 July 2026, “Certification Requirements for Distribution of Specialized Investment Funds (SIFs)”. sebi.gov.in
- AMFI, SIF Monthly Report for September 2026 (net assets as on 30 September 2026). amfiindia.com
- Reserve Bank of India, Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, notification FEMA 395/2019-RB, amended up to 13 June 2026, Schedule III. rbi.org.in
- AMFI Master Circular for Mutual Fund Distributors, AMFI/MFD-CIR/32/2025-26, 14 January 2026, paragraph 3.6.1 (name, ARN and tag line for SIF distributors). amfiindia.com
- AMFI, “Locate a Mutual Fund Distributor”: search ARN 162637 to check Accrue’s registration. amfiindia.com
SEBI, AMFI and RBI texts are amended from time to time. Check the current text before relying on any figure here.
Regulatory transparency
AMFI ARN
162637
APRN
02629
BSE Member Code
33884
Status
AMFI Registered Mutual Fund Distributor & SIF Distributor
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