Specialised Investment Funds (SIFs) have achieved significant market traction since their introduction, with net assets under management crossing ₹13,500 crore as of May 31, 2026. According to Sebi Whole-Time Member Amarjeet Singh, speaking at Assocham's 17th Mutual Fund Summit, the regulatory framework introduced last year has witnessed encouraging early response. The funds are spread across more than 56,000 investor folios, demonstrating rapid adoption among sophisticated investors seeking advanced investment strategies. Singh emphasized that this growth indicates a growing investor appetite for differentiated investment solutions within a well-regulated ecosystem.
Despite the strong performance of SIFs, India's mutual fund industry faces significant penetration challenges compared to global markets. As reported by The Hindu BusinessLine, less than 5% of India's population participates in mutual funds compared to the United States where mutual fund penetration is over 50%. However, the industry has shown remarkable growth with assets under management increasing nearly six-fold to ₹81.58 lakh crore as of May 31, 2026, up from ₹13.82 lakh crore in May 2016. The number of unique mutual fund investors has grown to 6 crore from just over 1 crore a decade ago, with individual investors now accounting for close to two-thirds of total MF AUM. Singh noted that in March 2026, the ratio of MF AUM to GDP crossed 21%, an all-time high, indicating deeper market integration.
Specialised Investment Funds (SIFs) were introduced by SEBI in April 2025 to bridge the gap between traditional mutual funds and Portfolio Management Services (PMS). According to Harshvardhan Roongta, CEO of Roongta Securities, SIFs require a minimum investment of around ₹10 lakh, making them an intermediate product for investors seeking more advanced investment strategies. This compares favorably with PMS, which requires ₹50 lakh minimum investment, and Alternative Investment Funds (AIFs), which need ₹1 crore minimum. As reported by Zee Business, SIFs were designed to provide sophisticated strategies to investors who cannot access PMS or AIFs.
The biggest structural difference lies in investment strategy, with traditional mutual funds being 'long-only' products that cannot profit from falling markets through short-selling. SIFs, however, are allowed to short-sell up to 25% of their portfolio and use derivatives for hedging. According to Roongta, fund managers can use derivatives and short positions to manage downside risk when markets may decline, a flexibility that mutual funds lack. Because SIFs employ relatively complex investment techniques, SEBI believes investors committing at least ₹10 lakh are more likely to understand derivative strategies, hedging and portfolio risk management. As reported by Zee Business, this product is intended for more informed investors who understand these sophisticated strategies.
Looking ahead, SEBI is calling for innovation in product design, distribution, and investor communication to bring millions of households who are yet to invest in mutual funds. Singh emphasized that better financial returns along with governance in investing companies will be key to measuring industry progress. The regulatory body is also introducing Life Cycle Funds under the revised framework for mutual fund categorisation, which can support more disciplined, goal-based investing over longer time horizons. According to Singh, goal-based products such as life cycle funds can help investors remain focused on suitable asset allocation and long-term financial objectives in an environment where social media can amplify eye-catching returns and drive FOMO. To strengthen the distribution framework, Sebi and the National Institute of Securities Markets (NISM) are working on a Combined Mutual Fund SIF Distributor Certification Examination to ensure professional competency among distributors.
