India’s Specialised Investment Funds have scaled to ₹38,224 crore in assets by September 2026. While these funds offer advanced strategies like derivative hedging and active asset allocation, their complex nature requires investors to understand specific risks, including potential lock-in periods and strategy volatility.
Specialised Investment Funds (SIFs) in India have seen rapid adoption, with assets under management (AUM) climbing to ₹38,224 crore by the end of September 2026. This marks a significant jump from the ₹31,175 crore level recorded just a month earlier, signaling strong demand for investment products that bridge the gap between traditional mutual funds and Portfolio Management Services.
A New Middle Ground for Investors
Introduced by the market regulator SEBI in 2025, SIFs are designed to offer more flexibility than standard mutual funds. While traditional schemes are generally restricted to long-only equity or debt positions, SIFs allow fund managers to use derivatives for hedging, short selling, and active asset allocation. This shift toward nuanced strategies has attracted investors looking for diversification beyond the simple 'buy and hold' approach.
The entry barrier for these funds is set at a minimum investment of ₹10 lakh per investor, calculated at the PAN level for each asset management company. This requirement positions them above standard retail products but more accessible than traditional PMS, which often require much higher capital thresholds.
Market Concentration and Key Players
Despite the growth of 17 asset management companies offering these products, the sector remains highly concentrated. The top three platforms—Edelweiss Mutual Fund, ICICI Prudential Mutual Fund, and SBI Mutual Fund—collectively manage a significant majority of the industry's total AUM. Edelweiss Mutual Fund’s Altiva platform, for instance, held ₹13,221 crore in assets as of September 30, 2026, highlighting the current dominance of early movers in the category.
Understanding the Risk Profile
While the growth figures are high, investors need to look closely at the strategy risks involved. Because these funds use derivatives to execute complex ideas like long-short equity or directional bets, they do not behave like standard equity funds. In volatile markets, the ability of a manager to execute these strategies correctly becomes the primary factor for returns.
Liquidity is another area that requires attention. Unlike standard mutual funds, which often offer daily liquidity, SIFs may include specific lock-in periods, notice periods, or interval-dependent redemption windows. Furthermore, the use of derivatives introduces operational risks, such as counterparty and rollover exposure, which are not typically associated with traditional long-only schemes.
As the category matures, the main monitorable for investors will be how these funds perform during different market cycles. Investors should examine the track record of fund managers in executing complex strategies and be clear about the specific liquidity terms attached to their chosen scheme before committing capital. The regulatory framework continues to evolve, and keeping track of any changes in disclosure or investment limits will be essential for those participating in this segment.