Indian Markets Might Soon See A Slew Of SIFs — All You Should Know About This New Asset Class
Can you invest? Yes, if you have Rs 10 lakh, which is the minimum investment amount from an investor, as per SEBI regulations.
After Axis and Nippon AMC's recruitments before they launch their SIF, Edelweiss AMC said that it had received SEBI approval for its SIF on Thursday.
So, what's an SIF? Over the years, a gap has emerged between mutual funds and portfolio management services in terms of portfolio flexibility, creating an opportunity for a new investment product. To bridge this gap, the regulator has amended the SEBI (Mutual Funds) Regulations to introduce the broad regulatory framework for a new investment product—Specialised Investment Fund, that will offer investors exposure to advanced investment strategies and include exposure to equity, debt, derivatives like futures and options etc.
Can you invest? Yes, if you have Rs 10 lakh, which is the minimum investment amount from an investor, as per SEBI regulations.
The markets regulator permit equity, debt and hybrid investment methods under SIFs.
Equity Long-Short Fund
Minimum investment in equity and equity related instruments: 80%.
Maximum short exposure through unhedged derivative positions in equity and equity related instruments: 25%.
Equity Ex-Top 100 Long-Short Fund
Minimum investment in equity and equity related instruments of stocks excluding top 100 stocks by market capitalisation: 65%.
Maximum short exposure through unhedged derivative positions in equity and equity related instruments of other than large cap stocks: 25%
Sector Rotation Long-Short Fund
Minimum investment in equity and equity related instruments of maximum four sectors: 80%.
Maximum short exposure through unhedged derivative positions in equity and equity related instruments: 25%.
Debt Long-Short Fund
Investment in debt instruments across duration, including unhedged short exposure through exchange traded debt derivative instruments.
Sectoral Debt Long-Short Fund
Investment in debt instruments of at least two sectors, with maximum investment of 75% in a single sector.
Maximum short exposure through unhedged derivative positions in debt instruments: 25%.
Active Asset Allocator Long-Short Fund
Dynamic investment across following asset classes: Equity, debt, equity and debt derivatives, REITs/InVITs and commodity derivatives.
Maximum short exposure through unhedged derivative positions in equity and debt instruments: 25%.
Hybrid Long-Short Fund
Minimum investment in equity and equity related instruments: 25%.
Minimum investment in debt instruments: 25%.
Maximum short exposure through unhedged derivative positions in equity and debt instruments: 25%.
A registered mutual fund may establish an SIF, provided they meet the SEBI eligibility criteria pertaining to track record, assets under management and/or requisite appointments.
The subscription and redemption frequency of investment strategy under SIF may be based on the nature of investments, including daily, weekly, fortnightly, monthly, quarterly, annually, fixed maturity, or other suitable intervals.
The AMC shall ensure that the SIF has distinct identification, separate from that of the mutual fund, to maintain clear differentiation between the offerings of the SIF and that of a mutual fund.
