SIF assets near ₹10,000 crore as more mutual funds launch new products

Assets in specialised investment funds near Rs 10,000 crore as more mutual fund houses launch offerings, with wealth managers emerging as the main distribution channel

Specialised investment funds (SIFs), the newly introduced mutual fund (MF) product category, are gaining traction as more asset managers roll out offerings. Assets under management (AUM) in the segment are approaching ₹10,000 crore, with nearly half the assets added in the past two months.

 

The first SIF was launched by Quant Mutual Fund in September 2025. Since then, eight more fund houses have entered the segment. The number of schemes, which stood at 11 in February, is now nearing 15, with three products launched so far this month.

 

Mutual fund executives say the pace of adoption has been broadly in line with expectations, given that SIFs are relatively complex products and distribution remains limited. Individual distributors — who account for the bulk of MF sales — are yet to qualify for SIF distribution in significant numbers. 

“The distribution of the product will continue to increase as more of our MF distributor partners pass the required NISM XIII exam, which is surely happening. So, the base has been built, the acceptance is good, and the growth has been incredible in the first few months," said Radhika Gupta, managing director and chief executive officer (MD&CEO), Edelweiss MF.

 

For now, wealth managers have emerged as the primary distribution channel for SIFs, given their access to high-net-worth clients who are better suited to such specialised strategies.

 

According to Rahul Jain, president and head at Nuvama Wealth, SIFs are increasingly being recommended to clients for absolute-return strategies that were earlier available largely through Category III alternative investment funds (AIFs).

 

“SIFs make a lot of sense from an allocation perspective for absolute-return strategies. Earlier, these strategies were largely offered through Category III AIFs, which were tax inefficient,” he said.

 

The Securities and Exchange Board of India (Sebi) introduced SIFs last year to bridge the gap between MFs and AIFs, allowing fund houses to offer more sophisticated strategies within the MF framework. The products require a minimum investment of ₹10 lakh and enjoy pass-through taxation similar to MFs, where gains are taxed in the hands of investors. In contrast, Category III AIFs are taxed at the fund level.

 

So far, offerings have largely been concentrated in hybrid strategies. Six active hybrid long-short funds account for ₹7,389 crore of assets, with the rest spread across equity long-short funds and equity ex-top 100 long-short funds.