The recently launched Specialised Investment Fund (SIF) by the Securities and Exchange Board of India (SEBI) is experiencing significant uptake, with 50% of participants coming from smaller cities beyond the top 30 urban areas. Fund houses are eager to leverage this first-mover advantage, as the minimum investment limit of ₹10 lakh is determined at the fund house level. This structure benefits larger mutual fund houses, as individuals who invest ₹10 lakh in one SIF can subsequently invest ₹50,000 in future offerings from the same fund house.
According to Madhu Nair, Chief Executive Officer of Union Mutual Fund, there is currently no clear distinction between large and small fund houses because the SIF market is still developing, and it is uncertain which entities will emerge as leaders.
Rising Participation from Smaller Cities
Investor demographics indicate that smaller cities represent 30% of SIF asset holdings, compared to just 20% in traditional mutual funds. This shift exemplifies that investment aspirations are not confined to affluent urban areas, Nair remarked, projecting that the SIF category could achieve an Asset Under Management (AUM) of ₹1 lakh crore within three years.
Fund Houses See Strong Growth Potential
Anand Vardarajan, Chief Business Officer at Tata Mutual Fund, expressed enthusiasm for SIF products, highlighting their capacity to address challenges related to taxation, investment sizes, and talent acquisition. “Investors are receiving a superior product at ₹10 lakh. This category has the potential to grow significantly in the coming years. Unlike previous investment models that relied on market upsides, this product allows for continuous participation, regardless of market conditions,” he noted.
AUM and Offerings See Sharp Rise
Recent data from the Association of Mutual Funds indicates that SIF AUM has surged to ₹10,620 crore as of March, a rise from ₹4,892 crore in December. The number of SIF offerings has doubled to 14 over the same timeframe.
Early Movers Gain Ground in SIF Space
SBI Mutual Fund’s Magnum SIF leads the market with an AUM of ₹2,994 crore, significantly increasing from ₹1,181 crore in the prior quarter. Following closely are Edelweiss Mutual Fund’s Altiva SIF with ₹2,366 crore and ICICI Mutual Fund’s iSIF, which has reached ₹1,036 crore. Other notable SIF players include Quant Mutual Fund’s qSIF at ₹867 crore, Tata Mutual Fund’s Titanium SIF at ₹404 crore, and ITI Mutual Fund’s Diviniti SIF at ₹355 crore.
Distribution Remains a Challenge
Despite the growth interest, distribution continues to pose challenges, with only 6,000 distributors having passed the NISM’s 150-mark examination, which covers derivatives basics, trading strategies, risk management, and regulatory considerations. It is important to note that this exam features negative marking: one point is deducted for every four incorrect answers. Additionally, the inclusion of currency derivatives in the syllabus is seen as irrelevant for SIF.
Industry Seeks Changes in Certification Norms
In response to these challenges, the industry is advocating for SEBI to revise certification standards, specifically pushing for the elimination of negative marking and the removal of currency derivatives from examination requirements.
Published on May 2, 2026.
