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SIFs AT SEVEN MONTHS: BABY STEPS TODAY, WIDER MARKET STRATEGIES TOMORROW
Mint Hyderabad
|May 21, 2026
Specialized investment funds (SIFs), positioned between mutual funds (for retail investors) and portfolio management services (PMS) or alternative investment funds (AIFs) for high net-worth individuals, offer multiple distinct structural and regulatory advantages.
(ISTOCKPHOTO)
Being within the mutual fund (MF) fold, SIFs enjoy MF-style taxation. Mutual funds are tax-free trusts; profits accrue within the fund. PMS and AIF categories I and II are generally pass-through vehicles for tax purposes.
The Securities and Exchange Board of India (Sebi) permits short positions in SIFs up to 25% of the portfolio. Unlike long-only MFs, SIF managers can benefit from falling stock prices. Like MF, SIFs can also use derivatives for hedging, thereby reducing volatility during sharp market swings.
The first SIF was launched in October 2025. As per AMFI data, by October 2025 there were four strategies, over 10,000 folios and more than ₹2,000 crore AUM—implying an average ticket size of ₹20 lakh per folio, versus the ₹10 lakh minimum investment threshold. By March 2026, the number rose to fourteen strategies, over 44,000 folios and more than ₹10,000 crore AUM. The average ticket size increased further to about ₹24 lakh.
This story is from the May 21, 2026 edition of Mint Hyderabad.
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