A BLEND OF FLEXIBILITY & FINESSE

SEBI'S SIFs blend mutual fund ease with PMS flair, delivering advanced strategies at a pocket-friendly ₹10 lakh entry

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Come April, a new asset class introduced by the Securities and Exchange Board of India (SEBI), known as Specialized Investment Funds (SIFs), will be rolled out for investors. This product is intended to bridge the gap between mutual funds and portfolio management services (PMS) in terms of flexibility in portfolio construction.

This new product will cater to investors willing to take higher risks and seek greater portfolio flexibility, which mutual funds cannot offer due to regulatory restrictions and the higher entry barrier in PMS funds. SIFs will have a minimum investment of ₹10 lakh compared to ₹50 lakh for a PMS and will offer advanced strategies, such as long-short equity strategies.

SIFs can help the ₹67 lakh crore mutual fund industry become more innovative and create high-return products under the regulatory ambit. Going forward, SIFs will serve as a key link for the mutual fund industry by providing diversification through an increased number of clients and by striking a balance between investor safety and industry growth.

NEED TO SET UP THIS NEW CATEGORY

Apart from combining the flexibility of mutual funds and PMS, SIFs also aim to curtail the proliferation of unregistered and unauthorized investment management services that often pose a significant risk of capital loss for investors. Numerous incidents across the country have shown that investors fall prey to entities offering high returns, only to lose their entire capital.