Specialised Investment Funds (SIFs) attracted net inflows of ₹7,578 crore in September 2026, taking their assets under management (AUM) to ₹38,287 crore.
Data from their first year points to growing investor interest, while early performance comparisons show differences in how SIFs and mutual funds respond to market declines and recoveries.
According to Germinate Investor Services LLP, SIF assets grew nearly 19-fold from ₹2,010 crore in October 2025 to ₹38,287 crore in September 2026. Net inflows between April and September totalled ₹26,596 crore.
SIFs operate under the mutual fund framework and allow eligible fund managers to use specialised strategies, including long-short positions through derivatives.
The minimum investment is ₹10 lakh per PAN across an AMC’s SIF strategies, subject to applicable exemptions.
How have SIFs performed against mutual funds?
An analysis by Ionic Wealth compared SIFs and mutual funds across two market phases in 2026. Between January 2 and March 30, the Nifty 50 fell 15.2%. During this period, equity long-short SIFs recorded a downside capture ratio of 21%, compared with 92% for large-cap funds and 90% for flexi-cap funds.
The downside capture ratio measures how much of the benchmark’s decline a fund captures; a lower ratio indicates a smaller loss relative to the benchmark.
During the subsequent recovery, from March 30 to August 3, when the Nifty 50 gained 10.9%, equity long-short SIFs recorded an upside capture ratio of 113%. The corresponding figures were 133% for large-cap funds and 170% for flexi-cap funds.
The results indicate that equity long-short SIFs captured a smaller share of the market’s decline but also participated less in its recovery than the two mutual fund categories.
The analysis covered seven SIF schemes with a track record dating back to January 1, 2026. The short observation period does not establish long-term outperformance.
One SIF scheme reports 9.36% one-year return
Data shared by Edelweiss Asset Management Company (AMC) shows that its Altiva Hybrid Long-Short Fund reported a one-year return of 9.36% as of October 20, 2026. This compared with category averages of 5.82% for arbitrage funds and 1.19% for equity savings funds.
The fund’s annualised standard deviation was 3.40%, against 1.33% for the arbitrage fund category and 4.33% for the equity savings fund category, according to the AMC. Standard deviation measures the variability of returns.
These are scheme-level figures and do not represent the performance of SIFs as a whole. The comparisons also involve different investment strategies.
The Altiva fund combines fixed-income investments and arbitrage with covered calls and other derivative strategies. Its September portfolio included 41% in fixed income, 38% in cash-futures arbitrage and covered calls, and 12% in other derivative strategies.
Hybrid strategies account for most SIF assets
Hybrid strategies accounted for 69% of SIF AUM in September, according to Germinate. They attracted ₹5,174 crore in inflows during the month, an 11% increase from the previous month, while inflows into equity-oriented SIFs fell 21%.
The report also said equity mutual fund AUM declined 4.3% in September due to mark-to-market losses, even as SIFs continued to receive inflows.
The number of SIF folios rose from 44,546 at the end of March to 1,25,539 at the end of August. By September, 33 strategies were available across 17 AMCs, the report said.
What investors should know
SIFs provide access to specialised strategies that can use derivatives and short positions within regulatory limits. While these approaches can help managers adjust market exposure, they also carry risks, including potential losses if market movements go against their positions.
With the first SIF launched in September 2025, the category has yet to demonstrate how its strategies perform through a complete market cycle.
Early returns and inflows offer a snapshot of performance and investor demand, but are not sufficient to establish whether SIFs can consistently outperform conventional mutual funds.