SIF AUM jumps over fivefold in six months: Should mutual fund investors consider a switch? Experts weigh in

Specialised investment funds (SIFs) have gained traction since their debut in October 2025. Their AUM rose from ₹ 2,010 crore to ₹ 10,620 crore by March 2026, a more than five-fold increase in six months, according to the latest AMFI -Crisil Factbook 2026.

“Initial adoption is being led by affluent investors , HNIs and wealth-management clients, but the category can gradually become much broader,” said Tushar Bopche, Co-Founder and CEO, InvestValue.

“The ₹ 10 lakh minimum means affluent and sophisticated investors will naturally be the early adopters,” said Sougata Basu, Founder and CEO, CashRich. He added that SIFs offer greater flexibility within a regulated mutual fund structure.

Nitin Agrawal, CEO, Mutual Funds by InCred Money, said the category’s growth coincided with a sharp equity-market correction, when investors were seeking strategies offering greater downside management.

“A mutual fund SIP can start with even ₹ 100. An SIF needs a ₹ 10 lakh minimum. The real advantage is downside management inside the fund,” explained Basu.

“Traditional mutual funds operate within tight SEBI-mandated category boxes. However, this flexibility in SIFs comes with additional risks,” Agrawal noted. Investors need to consider derivatives, counterparty and liquidity risks in SIFs.

“SIFs sit between conventional mutual funds and PMS, combining a pooled and regulated structure with greater strategic flexibility,” said Chinmay Sathe, CIO and Head SIF, The Wealth Company Mutual Fund.

Harish Krishnan, CIO-Equity, Aditya Birla Sun Life AMC, said SIFs may make sense for existing mutual fund investors if they add a distinct return driver or downside-management strategy rather than duplicate existing equity exposure.

Hybrid long-short strategies accounted for 75.48% of SIF AUM in March 2026, while hybrid strategies overall accounted for 76.71%, according to AMFI data.

“The dominance of hybrid SIFs is positive because it shows investors are increasingly focusing on risk management, portfolio construction and differentiated outcomes,” Bopche said.

These strategies typically combine long positions in equity and debt with short positions through derivatives such as index or stock futures. The short positions can reduce net equity exposure during market stress, while debt can provide stability, Agrawal explained.

“It suits a conservative lump-sum investor who wants equity participation with smaller drawdowns,” Basu added.

SIF net inflows accelerated sharply, with February 2026 recording a record ₹ 3,127 crore. “These flows are not from first-time investors, and new investors should build a simple SIP-led mutual fund portfolio first,” Basu added.

“Increasing awareness, a wider choice of strategies and the growing sophistication of Indian investors are supporting this trend,” Sathe noted.