Quant Mutual Fund, Edelweiss Mutual Fund, and SBI Mutual Fund have introduced specialized investment funds, which are designed to cater to specific investment objectives and strategies.These funds are tailored to meet the unique needs of investors, offering exposure to particular asset classes, sectors, or themes. Investors should carefully evaluate the features, benefits, and risks associated with these funds before investing.Key aspects to consider include the fund’s investment objective, asset allocation, risk profile, and fees associated with the investment. It is essential for investors to assess their own financial goals, risk tolerance, and investment horizon to determine if these specialized funds align with their overall investment strategy.Investors should also review the fund’s historical performance, management team, and investment process to make an informed decision. Additionally, understanding the tax implications and any potential exit loads is crucial to avoid any unexpected surprises.Ultimately, investors should consult with a financial advisor or conduct their own research to determine if these specialized investment funds are suitable for their investment portfolio and goals.

The Securities and Exchange Board of India (SEBI) has recently cleared Specialised Investment Funds (SIFs) for affluent investors seeking strategies beyond traditional equity and debt. SIFs are being launched by leading asset managers under separate branding across equity, debt, and hybrid categories. Quant Mutual Fund was the first to launch a SIF in September 2025, followed by Edelweiss and SBI Mutual Fund on October 1.

SIFs differ from other products in that they allow participation with a minimum investment of Rs 10 lakh, or Rs 1 lakh for accredited investors. They also offer the ability to take naked short positions of up to 25% of assets, enabling SIFs to potentially profit in falling markets. Edelweiss Altiva Hybrid Long-Short Fund is one of the first SIFs to be launched, with a blend of equity, debt, arbitrage, and derivative strategies. The fund has a conservative portfolio construction, with nearly 50% of assets in debt and the rest divided between arbitrage, unhedged equity, and derivative strategies.

The taxation advantage of SIFs is that long-term gains are taxed at 12.5% after two years, compared to higher rates applicable to debt or conservative hybrid funds. However, SIFs come with risks, and investors should be cautious. Long-short strategies require asset managers to make accurate calls on market direction, allocation, and derivative positions, and missteps can amplify volatility and erode returns.

Experts suggest that investors wait and watch how SIFs perform before committing significant capital. SIFs may best suit seasoned investors comfortable with higher risk in pursuit of differentiated strategies. Traditional mutual funds remain the preferred route for long-term wealth creation and portfolio simplicity. It is essential for investors to consult with a qualified financial advisor before making any investment decisions.

Industry watchers expect several other fund houses to follow suit, making SIFs one of the most closely tracked product launches in the asset management industry this year. With the introduction of SIFs, Indian investors now have access to a new range of investment strategies that were previously unavailable to them. As the market for SIFs grows, it will be interesting to see how they perform and whether they will become a popular choice among Indian investors.