SIF or Specialized Investment Fund is launched in India. Mutual Funds are the goto investments for most of the people because the entry is quite low and it actually helps people to get wealthy slowly and steadily. Next is PMS or Portfolio Managemmt Service which is for high end people where you will invest more than 50 lakhs. It is like a mutual fund itself but there would be a fund manager who will be handling much less money and can take better decision. The good PMS can earn you more than Mutual Funds.
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Now there is a new entry which is SIF which is in between mutual fund and PMS. The entry barrier is little less, that means you have to invest 10 lakhs or more in the fund. Now the good thing about the SIF is that it can invest in anything equity, derivatives and even real estate. Along with that the fund manager can use it for derivatives, long, short, leverage and what not. So it is mainly for the investors who wants to go out from the traditional investment and try to create an alpha and that's where the SIF comes into picture.
And that's why only those people should invest in it who are HNIs or who are OK to withstand higher volatility. The things is SIF is actually aims to create that alpha in both bull and bear market and thus it would be nice to see how it actually works. This is still work on progress and we will see how much alpha it can generate once it starts the operation.
The fee will also be higher, might be around 1-2% portfolio management fee. So the SIF manager have to generate more than 2% alpha to actually beat the mutual fund. Otherwise people would be happy to invest only in mutual fund. It will be safe because it would be handled by the SEBI itself. So if you are HNI and ok for the volatility, then I guess you can invest in this fund.
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