Speaking to CNBC-TV18, Radhika Gupta, MD & CEO of Edelweiss Asset Management, described the launch as a “welcome step” in the evolution of Indian investing.
“For the consumer, it brings the best of both worlds,” Gupta said. “What PMS and AIF offered was flexibility in investments, redemption, and use of credit and derivatives. What mutual funds offered was comfort, tax advantages, SIPs. SIFs combine both.” She added that the lower minimum investment threshold of ₹10 lakh significantly broadens investor access. “With AIFs, you were talking about ₹1 crore minimum. SIFs open the door to a much wider group.”
Swarup Mohanty, Vice Chairman & CEO of Mirae Asset Investment Managers, agreed that SIFs represent a step forward for both asset managers and investors. “We are graduating into a more evolved space,” he said. “It’s a great platform for asset managers to express differentiated styles, and for investors to develop a better understanding of risk.”
A key differentiator with SIFs is their approach to derivatives. While mutual funds have always been allowed to use derivatives, Gupta explained they were limited to hedging purposes. SIFs allow the use of derivatives to take active positions, including negative views, up to 25% of the portfolio. “You can now express a view, not just hedge a position,” she said, pointing out this opens up new long-short strategies that were previously unavailable.
SIFs also allow greater flexibility in credit exposure. Gupta noted that while most conversations focus on equity, the real opportunity may be in debt. “There are larger relaxations for credit. Maybe you’ll see the revival of credit funds post-2018, in some format.”
Redemption norms are another departure from traditional mutual funds. Unlike the daily liquidity model of MFs, SIFs may offer weekly or biweekly redemption depending on the category. Gupta emphasised the importance of reading the fine print: “It will not be the same as regular mutual funds. It’s important to understand the risks.”
Mohanty stressed that investor education will be key to adoption. “This is a product for the slightly evolved investor—someone who’s been in mutual funds for 20–25 years. You don’t have to go the full distance with risk. Each fund house will take its own approach. It’s not rocket science—just a bit of reading can go a long way.”
Calling this “probably the best phase” for Indian capital markets, Mohanty underlined that SIFs are not just another product but a tool for more nuanced investing. “This offers a far more evolved position for the investor,” he said. “A better understanding of risk leads to a better approach to investing.”
Watch accompanying video for entire conversation.
