Specialised investment funds (SIFs) have gained traction since their debut in October 2025. Their AUM rose from ₹2,010 crore to ₹10,620 crore by March 2026, a more than five-fold increase in six months, according to the latest AMFI-Crisil Factbook 2026.
But what is driving this growth, and should investors consider SIFs?
Why are SIFs attracting investors?
“Initial adoption is being led by affluent investors, HNIs and wealth-management clients, but the category can gradually become much broader,” said Tushar Bopche, Co-Founder and CEO, InvestValue.
“The ₹10 lakh minimum means affluent and sophisticated investors will naturally be the early adopters,” said Sougata Basu, Founder and CEO, CashRich. He added that SIFs offer greater flexibility within a regulated mutual fund structure.
Nitin Agrawal, CEO, Mutual Funds by InCred Money, said the category’s growth coincided with a sharp equity-market correction, when investors were seeking strategies offering greater downside management.
How are SIFs different from mutual funds?
“A mutual fund SIP can start with even ₹100. An SIF needs a ₹10 lakh minimum. The real advantage is downside management inside the fund,” explained Basu.
“Traditional mutual funds operate within tight SEBI-mandated category boxes. However, this flexibility in SIFs comes with additional risks,” Agrawal noted. Investors need to consider derivatives, counterparty and liquidity risks in SIFs.
“SIFs sit between conventional mutual funds and PMS, combining a pooled and regulated structure with greater strategic flexibility,” said Chinmay Sathe, CIO and Head SIF, The Wealth Company Mutual Fund.
Harish Krishnan, CIO-Equity, Aditya Birla Sun Life AMC, said SIFs may make sense for existing mutual fund investors if they add a distinct return driver or downside-management strategy rather than duplicate existing equity exposure.
Why are hybrid long-short SIFs most popular?
Hybrid long-short strategies accounted for 75.48% of SIF AUM in March 2026, while hybrid strategies overall accounted for 76.71%, according to AMFI data.
“The dominance of hybrid SIFs is positive because it shows investors are increasingly focusing on risk management, portfolio construction and differentiated outcomes,” Bopche said.
These strategies typically combine long positions in equity and debt with short positions through derivatives such as index or stock futures. The short positions can reduce net equity exposure during market stress, while debt can provide stability, Agrawal explained.
“It suits a conservative lump-sum investor who wants equity participation with smaller drawdowns,” Basu added.
Why are SIF inflows rising sharply?
SIF net inflows accelerated sharply, with February 2026 recording a record ₹3,127 crore. “These flows are not from first-time investors, and new investors should build a simple SIP-led mutual fund portfolio first,” Basu added.
“Increasing awareness, a wider choice of strategies and the growing sophistication of Indian investors are supporting this trend,” Sathe noted.
Bopche said investors should not choose SIFs simply because they are the latest product category; they should have a clear role in the overall asset allocation.
Is the pace of SIF growth sustainable?
The number of SIF schemes across four sub-categories increased from four in October 2025 to 14 in March 2026, according to AMFI data.
“Yes, it is sustainable. However, the category’s six-month track record is too short to draw firm conclusions,” Agarwal added.
Krishnan said growth can remain sustainable if new products offer genuine strategy differentiation and are suitable for investors. He advised against selecting SIFs solely on recent returns or inflows.
Bopche said increasing competition could bring more choice and innovation, but investors should focus on strategy clarity, fund-manager experience, risk-adjusted returns, drawdowns, portfolio overlap, liquidity, costs and how the SIF fits into their existing portfolio.
Should MF investors consider SIFs now?
Experts cautioned investors against treating SIFs as premium mutual funds or chasing recent performance.
Bopche said investors should understand what a SIF adds to their portfolio and avoid assuming that owning multiple SIFs automatically provides diversification.
Basu suggested checking the net equity exposure, correlation with existing holdings and performance during market falls.
Sathe said investors should assess the strategy, fund-manager capability, gross and net exposure, concentration, liquidity, volatility and drawdowns, with experience in managing both long and short positions particularly important for long-short strategies.
Agrawal said investors should examine the SIF’s correlation with their existing portfolio during market stress and understand both its gross and net exposure. Most importantly, investors should know how the fund makes money and what could cause it to lose money before investing.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
About the Author
Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance.
She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram.
Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.