What is a SIF?
A Specialised Investment Fund is a category SEBI created to sit between a mutual fund and an AIF.
It can do things a mutual fund cannot. It can go long the stocks it likes and short the ones it does not, which is hedge-fund technique. But it keeps mutual-fund style rules, disclosure and tax treatment, and a far lower entry point than an AIF.
What is the minimum?
₹10 lakh. Against ₹50 lakh for a PMS and ₹1 crore for an AIF, that is a large drop in the entry ticket for a strategy of this kind.
Two details people miss.
- It is measured at PAN level, across all strategies of that fund. You cannot split ₹10 lakh across two of its strategies.
- Your ordinary mutual fund holdings with the same AMC do not count towards it.
- Accredited investors are exempt from the minimum.
What happens if your balance falls below ₹10 lakh?
It depends on why.
If the value drops because markets fell, that is not your doing and it is not treated as a breach. If you cause it, by redeeming part of your holding, the units are frozen and you get 30 days to rebalance back above the floor.
How is a SIF taxed?
Like a mutual fund, which is the point of the structure.
An equity-oriented SIF is taxed as equity: 20% on gains under 12 months, 12.5% beyond, with ₹1.25 lakh exempt each year. Compare that with a Category III AIF, where tax is generally settled inside the fund at the maximum marginal rate.
For many investors that difference matters more than the strategy.
What should make you cautious?
The category went live in 2025, so track records are short. There is no long-run evidence yet on how these strategies behave through a full cycle in Indian markets.
And hedged strategies trade constantly, so the securities transaction tax increase from April 2026 lands harder on them than on a low-churn portfolio. Ask any manager how that change moved their gross-to-net.