Edelweiss Mutual Fund expects to launch its first product under its new platform for Specialised Investment Funds – Altiva SIF, in the next couple of months, according to the company's Managing Director and Chief Executive Officer Radhika Gupta.
“We're very excited about the brand approval for Altiva... After that, there's a process of product approval… But we're hoping that within the next couple of months, we should see SIF in one of the categories out soon. So, I think that's the timeline that investors have,” she told NDTV Profit on Monday.
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Edelweiss Asset Management Company recently got approval from the Securities and Exchange Board of India for the Altiva SIF platform. It plans to launch the fund in the hybrid category.
“Our likely filing is going to be in the hybrid category…there are a lot of risk-taking solutions out there. It's not that we won't participate there, but between AIFs (Alternative Investment Funds) and PMS (Portfolio Management Services) and equity and mid-cap and small-cap, lots of that is out there. There is a need for more tax-efficient, absolute return, fixed income plus kind of solutions, particularly in the kind of times we are in,” she said.
Gupta explained that SIF is essentially "just a mutual fund scheme with a little more flexibility than traditional mutual fund schemes allow." This flexibility primarily lies in the use of derivatives, the alteration of subscription and redemption frequencies and certain concentration limits.
She emphasised that despite this added flexibility, SIFs operate within the same trust infrastructure as mutual funds and are subject to the same taxation treatment.
The minimum investment threshold for SIFs is capped at Rs 10 lakh.
On being asked about the minimum investment threshold, she explained that the higher entry point reflects the increased complexity of SIFs, particularly in their use of derivatives and potential lack of daily liquidity in some categories.
“Derivatives come with their own sense of understanding and nuance, and I think that requires a savvier investor,” Gupta noted. She highlighted that derivatives can be complex, and the varied liquidity terms differ from the typical daily liquidity associated with mutual funds.
SEBI mandates that SIFs operate under a distinct brand to differentiate them from traditional mutual funds. Hence, the separate brand name ‘Altiva SIF' had to be created, she said. Gupta emphasised that this separation ensures clarity for investors, as SIFs cater to those with a higher risk appetite and greater financial literacy.
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