Specialised Investment Funds (SIFs) are exploding onto India’s investment scene in 2026, and the momentum feels unstoppable. Top AMCs are rolling out fresh SIF schemes, adding to the original 11 already live, while financial headlines buzz nonstop about their arrival. We understand the hype. SIFs hand you a rare shot at pro-level strategies that could weather market storms, promising double-digit returns, all under SEBI regulation.
It’s no surprise the capital is flooding in. As an investor, you are probably weighing the thrill, strengthened by the capital flooding in. But this excitement underlines a caution: Is it just a new hype masking untested waters?
Ask yourself this: Less than a year since their April 2025 debut, should you really commit ₹10 lakh to clever product design? The truth is, SIFs simply don’t have a long-term track record yet, so there is no fair verdict to call them winners or losers this early.
This blog cuts through the hype with clear analysis, starting with what SIFs really are.
What is a Specialised Investment Fund (SIF)?
A specialised investment fund is SEBI’s newest hybrid category, bridging traditional mutual funds and Portfolio Management Services (PMS). SEBI introduced it through the Mutual Funds Third Amendment Regulations, 2024, with operational details in its February 27, 2025, circular. The category became effective on April 1, 2025.
The entry limit
Building on this foundation, you must invest a minimum of ₹10 lakh per PAN per AMC, across all SIF strategies from that fund house. For example, you can allocate ₹6 lakh to an equity long-short SIF and ₹4 lakh to a hybrid long-short SIF from the same fund house, totalling the requirement. High-net-worth investors (HNIs), also called accredited investors, are exempted from this minimum rule.
SEBI designed this high bar for experienced players, not first-timers. That’s why you shouldn’t confuse SIFs with everyday mutual funds. From here, the design offers real perks, like tax-deferred mutual fund withdrawals, which skip PMS’s tax hit on every trade.
SIF eligibility rules
Only AMCs with 3+ years of operation and ₹10,000 crore+ average AUM qualify to launch SIFs. This ensures experience and scale before offering complex strategies.
Key investment strategies SIFs use
SIFs let fund managers run advanced plays, like:
- Long-short equity: Buy cheap stocks, bet against expensive ones (using derivatives). Profits even if markets stay flat.
- Equity Ex-Top 100 Long-Short Fund: Runs long-short only in stocks beyond the top 100, keeping overall short exposure within 25%
- Sector Rotation Long-Short: Invests at least 80% in a maximum of four sectors, with net short exposure up to 25% via derivatives
- Active Asset Allocator Long-Short: Dynamically shifts across asset classes, while keeping overall short positions within the 25% net asset limit
- Hybrid Long-Short: Combines equity and debt, using hedging/short exposure up to 25% of net assets to manage downside.
These aim to make profit in good times, bad times, or flat markets by hedging risks.
SEBI’s SIF categories in India
Currently, SEBI groups SIFs into three core categories:
- Equity-oriented SIFs: ≥80% in equities using derivative shorts for hedging
- Debt-oriented SIFs: Invest in fixed-income instruments, like bonds, while taking limited, controlled short positions in debt markets
- Hybrid SIFs: ≥25% each in equity and debt, with flexibility for REITs, InvITs, and commodities
By early 2026, several AMCs have launched SIFs with different categories. As of now, there are no debt-oriented SIFs in the market.
Current specialised investment funds or SIFs available in 2026
| AMC | Fund name | Investment strategy |
|---|---|---|
| ICICI Prudential Mutual Fund | iSIF Equity Ex-Top 100 Long-Short Fund | Equity Ex-Top 100 Long-Short |
| ICICI Prudential Mutual Fund | iSIF Hybrid Long-Short Fund | Hybrid Long-Short |
| Quant Mutual Fund | qsif Equity Ex-Top 100 Long-Short Fund | Equity Ex-Top 100 Long-Short |
| Quant Mutual Fund | qsif Equity Long Short Fund | Equity Long-Short |
| Quant Mutual Fund | qsif Hybrid Long-Short Fund | Hybrid Long-Short |
| ITI Mutual Fund | Diviniti Equity Long Short Fund | Equity Long-Short |
| 360 ONE Mutual Fund | DynaSIF Equity Long – Short Fund | Equity Long-Short |
| Edelweiss Mutual Fund | Altiva Hybrid Long-Short Fund | Hybrid Long-Short |
| Bandhan Mutual Fund | Arudha Hybrid Long-Short Fund | Hybrid Long-Short |
| SBI Mutual Fund | Magnum Hybrid Long Short Fund | Hybrid Long-Short |
| Tata Mutual Fund | Titanium Hybrid Long-Short Fund | Hybrid Long-Short |
Scroll right to view full table →
In 2026, four more SIFs will be launched, illustrating the category’s momentum. Its positioning offers advantages such as tax treatment for mutual funds (no PMS-style per-trade taxes when upgrading).
Check our Tax Harvesting Calculator to spot loss-making mutual fund units you can harvest for tax savings.
However, unlike every other category with years of performance data, SIFs have none. This absence fuels the buzz because it leaves room for imagination around their potential. It sparks bold promises that draw inflows, a trend we will explore next with AMFI data.
SIF is gaining momentum but be cautious
AMFI’s latest figures capture the clear SIF momentum: Assets under management (AUM) have exploded from ₹2,010 crore in October 2025 to over ₹9,711 crore by February 2026, with hybrid investment strategies accounting for 76.1% at ₹7,389 crore. Inflows accelerated sharply too; ₹3,127 crore in February 2026 alone from ₹1,729 crore in January 2026, at 80.6% month-on-month.
This data shows that SIFs are capturing sophisticated capital quickly, validating their appeal in a maturing market. You will see why financial headlines call it a surge. But, these numbers track just <6 months of inflows and AUM growth, not risk-adjusted returns or drawdowns. Without that, you are betting on promise over proof.
Less than six months isn’t a track record
Think about how SEBI mandates AMCs to disclose the fund performance. They show returns over 1, 3, and 5-year periods, compared with benchmarks and peers for easy, apples-to-apples comparisons. These periods capture full-market roller coasters, like the brutal 40% NIFTY decline in March 2020 and the subsequent recovery. That’s your full performance picture: how funds give returns and show consistency through volatility, drawdowns, and recoveries.
SIFs offer none of this depth yet, having been launched recently. Until their performance cycles unfold over 2-3 years minimum, you will have little clue on how they will handle a 20-30% correction, liquidity crunches, or multi-year sideways markets that challenge their strategy.
Specialised investment funds: The short-selling question
With that design focus talk, short selling gives SIFs an edge over regular mutual funds. Fund managers borrow shares of stocks that are priced too high, sell them right away at those higher prices, then buy them back later after prices drop, making money on the decline.
For example,
Consider two stocks: Company A (strong business; ₹2,500/share) and Company B (High debt; ₹20/share).
The SIF manager will buy “long” on Company A, meaning the manager will purchase 1,000 shares for ₹25 lakh total. If the share price rises to ₹3,000, the manager will sell for ₹30 lakh, giving ₹5 lakh profit.
Simultaneously, the SIF manager will “short” Company B using derivatives. He will bet ₹10 lakh against it, equivalent to 500 shares at ₹20. There’s no need to borrow shares, as derivatives like futures create this “short exposure”. If price drops to ₹15/share, he will sell it for ₹2.5 lakh profit. The net result would be ₹7.5 lakh gain.
This ₹7.5 lakh gain comes on a total portfolio amount of just ₹25 lakh (the long position only, as no shares were bought or sold in the short position). That’s a 30% return from stock-specific moves alone. Regular mutual funds buy stocks hoping prices rise, and have no way to profit when stocks fall. This means they would need NIFTY to rise 30% for the same gain. Here, SIFs win regardless of market direction.
However, doing this well takes sharp judgment to spot drops coming, strict rules to guard against sudden rises, and patience to ride out losses until markets turn. Indian SIF managers may use local insight, but shorting increases risk and raises volatility; returns here are uncertain and not guaranteed. So, ask yourself: Does this risk fit your comfort zone?
The verdict: It’s too soon to comment on SIFs
Specialised investment funds may prove their worth in the long run. But right now? There’s no definitive performance data. Investing now means betting on structure, not evidence. This works if it fits your risk appetite, time horizon, and portfolio.
Before you jump in, have a chat with a Qualified Financial Adviser to scrutinise a specific SIF’s strategy, target conditions, and how it fits into your holdings. The key question is not whether SIFs succeed generally, but whether this strategy from this fund house suits your portfolio now, and that merits careful, independent review before you commit.
