The asset class, which completed a year in October, has already grown to nearly ₹40,000 crore. Edelweiss AMC’s Altiva platform accounts for close to ₹14,000 crore, Gupta said.
She attributed the early traction to a combination of the product structure, tax treatment and the ₹10 lakh minimum investment threshold.
SIFs beat benchmarks, but short-term returns may not tell the full story
SIFs have also performed well during a challenging market environment. According to SIF360 data discussed during the conversation, 91% of SIFs across categories beat their benchmarks over the three- and six-month periods.
However, both Gupta and Seth cautioned investors against judging SIFs based on short-term returns.
The key differentiator going forward is likely to be the strategy followed by individual fund managers. Unlike traditional mutual fund categories, SIFs can have significantly different portfolios and risk profiles even within the same category.
Strategies can range from long-only equity exposure to long-short strategies and the use of derivatives.
Investors need to match SIFs with their goals
Gupta said investors should first identify their financial objectives and then choose a product that fits those needs.
“I am a big advocate of something called purpose-driven investing,” she said.
For investors, this means looking beyond recent returns and understanding the product’s risk, portfolio construction, equity exposure and investment horizon.
SIFs could also become more accessible as asset management companies launch more products across categories, giving investors more options to use the products as part of their broader asset allocation.
Seth said the wide variation in strategies would remain an important feature of the segment.
“They are so versatile in nature, and it depends on the fund manager and the fund houses,” he said.
With the category still in its early stages, the next phase is likely to focus on product differentiation, investor education and matching SIF strategies with specific financial goals rather than chasing short-term performance.
For the entire discussion, watch the accompanying video
