Whalesbook
Specialised Funds See Surge in Activity
The Specialised Investment Fund (SIF) market is buzzing with activity as an increasing number of fund houses prepare to launch their maiden schemes. Bandhan Mutual Fund entered this nascent segment on Friday with its hybrid long-short fund, operating under the Arudha brand. Meanwhile, ICICI Prudential Mutual Fund, via its iSIF division, and 360 ONE Mutual Fund, under Dyna SIF, have submitted draft scheme documents to the Securities and Exchange Board of India (Sebi).
Market Adoption and Performance
To date, seven SIFs have been launched by five different fund houses within the mutual fund universe. Quant Mutual Fund has emerged as the leader in launches, introducing three schemes. SBI Mutual Fund, Edelweiss Mutual Fund, ITI Mutual Fund, and Tata Mutual Fund have each launched one scheme. By November 2025, five of these schemes had completed their initial launch phases, collectively managing over ₹2,900 crore.
Hybrid Long-Short Category Dominates
Industry observers anticipate a pickup in SIF launches, though activity is expected to remain concentrated in specific categories. The hybrid long-short fund category has garnered the most interest from fund houses, offering a distinct product differentiation opportunity. Currently, four out of the seven operational SIFs fall into this category. Bandhan's Arudha Hybrid Long Short fund, launched Friday, is the latest addition, with ICICI Prudential Mutual Fund also filing for a product in the same space.
Investor Appeal and Strategy
Most SIFs in this category are designed for investors seeking absolute returns or stable income streams. These schemes leverage the flexibility to employ short-selling and complex strategies, aiming to outperform traditional hybrid funds like arbitrage and balanced advantage funds. Crucially, they strive to achieve this while maintaining a comparatively lower risk profile and offering enhanced tax efficiency.
Bandhan MF's Debut Offering
"Arudha Hybrid Long-Short Fund has been designed for sophisticated investors such as high net-worth individuals, institutional investors and family offices looking for optimal returns with optimal tax efficiency that can be achieved through the uniquely structured SIF," stated Vishal Kapoor, CEO of Bandhan AMC. The fund plans to allocate up to 65 per cent to short- to medium-term debt and money market instruments. A minimum of 35 per cent will be maintained in fully hedged, market-neutral equity positions.
SIFs: A Flexible New Vehicle
Specialised Investment Funds represent a new category within mutual funds, granting fund managers enhanced flexibility. This includes the ability to utilize long-short strategies and derivatives. Sebi introduced this new pooled investment vehicle in April 2025, with the first SIF launch occurring in September 2025. Several other fund houses, including HDFC MF, Union MF, DSP MF, and The Wealth Company, hold SIF licenses but have yet to announce their specific offerings.