Strategy risk
Short positions lose money if the shorted stocks rise.
SIFs offer strategies such as long-short equity that ordinary mutual funds cannot use, investing across Equity, Debt, Derivatives of Equity & Debt, Commodity and InvITs as per the fund's long-short strategy. DhanTarang helps investors understand, compare and invest in SIF products that fit their goals and risk appetite, with a minimum investment of ₹10 lakh.
A Specialized Investment Fund (SIF) is a SEBI-regulated investment product offered by established mutual fund houses. It can follow strategies that normal mutual funds cannot, such as limited short-selling through derivatives. SIFs sit between mutual funds and PMS: they have a ₹10 lakh minimum and the same tax treatment as mutual funds.
SEBI created the SIF category in 2025 for investors who have outgrown standard mutual funds but do not want the ₹50 lakh entry point of a Portfolio Management Service. Each SIF is run under its own brand name by an eligible Asset Management Company (AMC). It follows one of seven strategies approved by SEBI.
An SIF gives more investment freedom than a Mutual Fund at a much lower entry point than a PMS or AIF, PMS has minimum ticket size of 50 Lacs & AIF has minimum ticket size of 1 Cr. Since SIF is taxed at the investor level like a Mutual Fund, it can also be more tax-efficient than a PMS.
If you are weighing an SIF against a PMS, see our Portfolio Management Services and Alternative Investment Funds pages.
SEBI allows seven SIF strategies across Equity, Debt and Hybrid. Each AMC can offer only one fund per strategy.
At least 80% in equity. Short positions of up to 25% on stocks expected to underperform
At least 65% in stocks outside the top 100 by market capitalisation, meaning Mid and Small caps
At least 80% in a maximum of Four Sectors, rotated as the market outlook changes
Debt instruments across durations, with short positions through debt derivatives
Debt spread across at least two sectors, with sector-level short positions
Moves money between equity, debt and other assets as conditions change
At least 25% each in equity and debt, with limited short positions
A long position is a stock the fund buys because it expects the price to rise. A short position, taken through derivatives, gains when a stock's price falls. Combining the two lets a fund manager earn from both views and cushion part of a market fall. It also adds risk if those calls go wrong.
SIFs suit experienced investors with at least ₹10 lakh to allocate who already hold mutual funds and want a strategy that can go beyond buying and holding. They fit best as one part of a larger portfolio, not as your only investment.
An SIF is probably not right for you if you are a first-time investor, need the money within one or two years, or have not yet built an emergency fund.
For most goals, a regular mutual fund SIP remains the better starting point.
The minimum investment in an SIF is ₹10 lakh. It is counted per PAN across all SIF strategies of the same fund house, not per strategy.
So ₹5 lakh each in two SIF strategies of one AMC meets the rule.
Investing with a second AMC needs another ₹10 lakh there.
Accredited investors, meaning individuals certified as meeting SEBI's income or net-worth criteria, are exempt from this minimum. If later redemptions take your holding below ₹10 lakh, the fund house's rules in the Investment Strategy Information Document (ISID) decide what happens next.
SIFs are taxed the same way as mutual funds. You pay capital gains tax only when you redeem, not on each trade the fund manager makes. Whether a strategy is taxed like an equity fund or a debt fund depends on its asset mix, which is stated in its ISID.
This is one of the main advantages of an SIF over a PMS.
In a PMS, every sale inside your account can create a taxable gain.
In an SIF, trading happens inside the fund, and tax arises only on your own redemption.
Two SIF strategies with similar names can fall into different tax groups, so check the tax classification before you choose.
SIFs carry more risk than most mutual funds because they use derivatives, short positions and concentrated portfolios. Returns can differ sharply from the market, and some strategies allow redemption only weekly, monthly or at set intervals rather than daily.
Short positions lose money if the shorted stocks rise.
Sector rotation and mid/small-cap strategies hold fewer, more focused bets.
Interval strategies limit when you can exit. Their units are listed on a stock exchange, but trading volumes may be thin.
The category started in 2025, so most strategies have only a short performance history.
Every SIF carries a risk band, similar to the riskometer on mutual funds.
We understand your goals, horizon and existing portfolio.
Confirm you can invest ₹10 lakh with one AMC, or whether you qualify as an accredited investor.
We explain the relevant SIF strategies side by side, including liquidity, tax group, risk band and costs.
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An SIF is set up under SEBI's mutual fund regulations and managed by a mutual fund house, but it is a separate product category. It has its own brand, a ₹10 lakh minimum and more investment flexibility, including short positions of up to 25% through derivatives.
Neither is better in every case. An SIF needs ₹10 lakh instead of ₹50 lakh, is taxed only when you redeem, and follows SEBI's mutual fund disclosure rules. A PMS holds securities in your own name and can be customised to you. The right choice depends on your amount, tax position and need for customisation.
Some SIF strategies accept SIPs, but you must first meet the ₹10 lakh minimum at that AMC unless you are an accredited investor. SIP availability and terms vary by strategy, so check the strategy's ISID.
It depends on the strategy. Many equity long-short strategies allow daily redemption. Others allow redemption weekly, monthly or at fixed intervals, sometimes with a notice period. Close-ended and interval strategies are listed on stock exchanges to give you an exit route.
Only SEBI-registered mutual fund houses that meet eligibility criteria on track record and assets under management, or on fund-manager experience. Each SIF is launched under a brand name separate from the AMC's mutual fund schemes.
No. SIF returns depend on the strategy and market conditions, and a strategy can lose money. Short positions and derivatives can reduce losses in a falling market, but they can also add to losses if the fund manager's calls are wrong.
Rules can vary by fund house and by country of residence. NRI eligibility should be confirmed in the specific strategy's documents before investing. Our team can check this for you.
There is no fixed rule. Most investors treat an SIF as a satellite allocation next to a core portfolio of mutual funds, rather than as their main investment. Your allocation should depend on your goals, horizon and comfort with derivatives-based strategies.
DhanTarang Fintech Pvt Ltd, an AMFI-registered Mutual Fund & SIF Distributor in Mumbai, helps you compare SIF strategies, check your eligibility and invest with full clarity on risk, liquidity and tax.
Disclaimer: - 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.