Specialised Investment Fund: New Rs. 10 Lakh Investment Scheme Review! Good or bad?

Looking to boost your returns? High-return investment options like Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs) are available, but they come with hefty minimum investment requirements.

Unlike PMS and AIF, which require minimum investments of Rs. 50 lakhs and Rs. 1 crore respectively, SIF funds in India allows investments starting at Rs. 10 lakhs, making it more accessible while maintaining a lower risk profile.

If you’ve been looking for a 10 lakh investment plan that offers higher returns without jumping straight into high-risk territory, this could be it.

Table of Contents:

• The Middle Ground: Introducing the Specialized Investment Fund (SIF)
• Clear Distinctions in Branding and Advertising
• Cost and Fund Management: What You Need to Know
• Types of SIFs: What’s Best for You?
• Where Does the Money Go?
• Risk and Suitability: Is SIF the Right Fit for You?
• What You Should Do
• Final Takeaway

The Middle Ground: Introducing the Specialized Investment Fund (SIF)

So, what’s the alternative for those seeking a middle ground between equity mutual funds and these premium investment options? The Securities and Exchange Board of India (SEBI) has introduced a new scheme designed to fill this gap.

A Specialized Investment Fund (SIF) is a new investment option introduced by SEBI, designed for investors seeking higher returns with a manageable risk profile.

It requires a minimum investment in SIF of Rs. 10 lakhs and provides opportunities in equity, debt, REITs, and InVITs.

What’s more, SEBI has already granted approval to mutual fund companies that are currently operating to launch this SIF investment fund in India.

Is this the right opportunity for you to step up your investment game with a specialised investment fund in India?

Clear Distinctions in Branding and Advertising

While there’s no need to separate the operations of regular mutual funds and the new specialized fund, SEBI has emphasized that clear distinctions should be maintained in branding and advertising between the two.

This move ensures that the SIF plan stands out and doesn’t get confused with regular SIPs or mutual fund schemes.

But, why stop there? SEBI also requires that a dedicated website be created exclusively for this special investment fund, through which the schemes must be launched.

But, what about the cost?

Cost and Fund Management: What You Need to Know

The Total Expense Ratio (TER) for this fund will be similar to that of regular mutual fund schemes. This means that as the assets under management grow, the expense ratio will decrease.

Also, mutual fund companies can only launch this fund after obtaining approval from SEBI. But who will manage these funds? The fund manager must be a qualified professional.

Is this the kind of structured approach you expect when investing in something as critical as a specialized investment plan?

Types of SIFs: What’s Best for You?

Mutual fund companies can launch this fund as one of three types:

• Close-Ended Fund with a fixed maturity period
• Open-Ended Fund allowing investments and exits at any time
• Interval Fund, combining the benefits of both close-ended and open-ended structures
  For interval funds, investors will only be allowed to exit at specific intervals.

But what does that mean for investors? In an interval fund, investors will only be allowed to exit at specific intervals.

So if you’re considering how to invest in SIF in India, knowing the type of fund becomes crucial to your investment strategy.

Where Does the Money Go?

In this SIF scheme, up to 20% of the investments can be allocated to money market and debt market instruments.

But when it comes to equity investments, the SIF can only invest a maximum of 10% in any single company. Additionally, SIFs can invest up to 20% in REITs and InVIT, making them attractive for those looking for real estate-linked returns without buying physical property.

This allocation model makes SIF investment in India a smart option for diversification, offering a mix of equity, debt, and real estate exposure.

Risk and Suitability: Is SIF the Right Fit for You?

SSIFs are ideal for upper-middle-class investors who:

• Seek better returns than mutual funds.
• Are comfortable with the ₹10 lakh minimum.
• Understand the moderate risk associated with such investments.

However, this is not for small investors due to the higher entry barrier and risk involved.

If you’re comparing SIF vs SIP, remember that SIF is not a monthly plan like SIP, but rather a lump-sum special investment fund model with broader asset class exposure

Does this sound like the right fit for you?

Exciting, But Don’t Rush in!

While the idea of SIFs is exciting, jumping in without preparation can be risky.

What You Should Do

1. 1. Wait for Launches: Study the strategies and past performance of SIF schemes in India once available.
   2. Review Liquidity Constraints: Unlike mutual funds, some SIFs (especially interval and close-ended ones) have limited exit options. Make sure you’re comfortable with the investment lock-in period.
   3. Compare Options: Look at how SIFs stack up against other investment avenues like equity funds, PMS, or AIFs.

And if you’re still wondering how to invest in a Specialized Investment Fund (SIF) in India, it’s best to consult a Certified Financial Planner.

They can guide you through the suitability, structure, and strategy of SIFs based on your financial goals and risk appetite.

Final Takeaway

The Specialized Investment Fund (SIF) could be the perfect middle ground for investors who seek higher returns than traditional mutual funds but aren’t ready for the hefty minimums required by PMS or AIFs.

With a minimum investment of Rs. 10 lakh and a managed risk profile, top SIF Funds in India provide a unique opportunity for investors to diversify into equity, debt, REITs, and InVITs, while enjoying a structure approved and regulated by SEBI.

However, keep in mind that, The SIF is intended for upper-middle-class investors.

It is not suitable for small investors due to its higher minimum investment and associated risks.

Always weigh the SIF fund returns against your personal risk appetite.