SIF: A Link Between MF And PMS

Specialised Investment Funds (SIFs) will cater to 'mass affluent' investors who may not be able to afford PMS products but need more flexibility than the tightly regulated MFs

- JOYDEEP SEN

Mutual funds (MFs), due to their positioning, are typically favoured by retail investors, though high net-worth individuals (HNIs) and corporates also invest in them. However, HNIs typically use portfolio management services (PMSs) where the minimum ticket size is ₹50 lakh, as per the regulator. The minimum quantum in PMS may be higher at the discretion of the manager, but ₹50 lakh is the minimum as per the regulation. That leaves a space in between, which, in wealth management industry parlance, is referred to as “mass affluent”. This is currently catered to, either by MFs, or what is loosely referred to as “unregistered PMSs”. There are broking houses or wealth management outfits, which offer a basket of stocks, with a minimum ticket size of, say ₹2 lakh or ₹50,000 or ₹5 lakh. This is, per se, similar to what a PMS does.

The Need for SIFs