Lumpsum investors in mutual funds now have a new avenue — specialised investment funds (SIFs). Last month, lumpsum investments in equity funds took a hit, with net inflows into equity schemes declining 40% even as the systematic investment plan (SIP) book remained resilient. Industry experts believe a portion of these lumpsum allocations may have shifted towards the newly launched category.
Introduced last year, SIFs – with a minimum investment of Rs 10 lakh – have gained rapid traction among investors, with assets under management (AUM) rising nearly seven-fold from Rs 2,010 crore in October 2025 to around Rs 13,814 crore in May 2026.
Aditya Agarwal of Wealthy.in said it may be too early to conclude that SIFs are having a significant impact on the broader mutual fund lumpsum market. However, he noted that the category has seen early adoption among high-net-worth individuals (HNIs), especially through hybrid long-short strategies. Distributors are also being trained to offer SIF products to clients.
Hybrid long-short schemes have emerged as the most popular segment within SIFs, accounting for Rs 9,709 crore, or 70% of total SIF assets, as of May 2026. These schemes have also attracted higher average investments per folio compared with other SIF categories. Hybrid long-short schemes recorded an average folio size of Rs 33.86 lakh, compared with Rs 15.64 lakh for equity long-short schemes and Rs 12.77 lakh for equity ex-top 100 long-short schemes.
Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, attributed the popularity of hybrid SIFs to their risk-return profile compared with categories such as income-plus-arbitrage and equity savings funds. Agarwal added that recent performance, with hybrid SIF schemes delivering positive absolute returns during a sharp market correction, has further increased investor interest.
Sandeep Seth of SIF360.com said HNI investors are increasingly allocating to SIFs, particularly hybrid long-short schemes. According to him, investors see SIFs as a way to access long-short strategies, which are otherwise available through Category III alternative investment funds (AIFs) with a minimum investment of Rs 1 crore, at a lower entry point of Rs 10 lakh.
He added that some investors are also using SIFs to diversify across multiple hybrid long-short schemes by balancing defensive and aggressive strategies. Going ahead, affluent investors may use SIFs for lumpsum allocations during flat or volatile markets and selectively increase mutual fund exposure during market rallies, he said.
Experts expect SIFs to attract greater investor interest over the medium to long term. Vishranth Suresh of AssetPlus said fixed income investors seeking higher yields with controlled risk, as well as mutual fund investors looking for better risk-adjusted returns, could drive future growth in the category.
However, he added that wider adoption may take a few years as investor awareness and distributor capabilities improve. He also expects some existing Category III AIF investors in long-short strategies to consider shifting to SIFs due to favourable taxation and lower investment thresholds.
Agarwal said the category will need a longer performance track record, greater investor awareness and stronger distributor capabilities before it becomes a meaningful alternative for a wider base of mutual fund investors.
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