Specialised investment funds rollout nears as AMCs secure Sebi approvals

Distribution capabilities, now limited, will gain strength over time, say MF officials

The first set of specialised investment funds (SIFs) may soon hit the market as the Securities and Exchange Board of India (Sebi) has begun issuing approvals.

 

Quant Mutual Fund (MF), which will offer SIFs under the ‘qsif’ brand, is set to launch the qsif Equity Ex-Top 100 Long-Short Fund and the qsif Equity Long-Short Fund in the latter half of September.

 

At least one more fund house has already received Sebi’s nod, while two others are close to securing approval, according to senior MF executives.

 

SIFs allow fund houses to run complex strategies such as long-short equity and debt schemes. The product category, with a minimum ticket size of ₹10 lakh, was introduced by Sebi in April 2025.

 

MFs need two layers of clearance to launch SIFs — a one-time licence and product-specific approvals for each scheme.

 

At least half a dozen fund houses — including Quant, Edelweiss, ITI, Mirae, HDFC, and SBI — have already secured SIF licences, while others such as Axis and Nippon India are also in the queue. Product approvals have started trickling in over recent weeks.

 

However, while asset management companies (AMCs) are ready with products, questions remain about whether the ecosystem can support the new category. 

 

Executives say the main bottleneck is distribution. So far, only about 300 distributors have registered with the Association of Mutual Funds in India. The roadblock is the requirement for distributors to clear the National Institute of Securities Markets (NISM)-Series-XIII certification exam, considered tough because it covers equity and currency derivatives.

 

Several AMCs eyeing an SIF entry have been holding online sessions to help distributors clear the examination.

 

Other players in the ecosystem — including exchange MF transaction platforms and registrar and transfer agents — are expected to soon build the infrastructure needed to handle SIF flows, MF executives said.

 

Sandeep Tandon, chief executive officer of Quant MF, said while some hiccups are likely initially, the system will improve with time. “The number of distributors may be limited now, but their strength is growing by the day,” he said. “We see SIFs as a big opportunity and will launch our first set of schemes next month.”

 

The two qsif schemes are equity funds built on a long-short strategy. The qsif Equity Long-Short Fund will invest across market capitalisation, while the qsif Equity Ex-Top 100 Long-Short Fund will focus on midcaps and smallcaps. Derivatives long positions will be capped at 50 per cent, while unhedged short exposure can go up to 20 per cent.