Investors looking for something more advanced than mutual funds but less expensive than Portfolio Management Services (PMS) now have a new option.
Kotak Mahindra Asset Management has launched its first fund under SEBI’s new Specialised Investment Fund (SIF) category.
The new fund, called Kotak Infinity Hybrid Long-Short Fund, opened for investment on June 15 and the New Fund Offer (NFO) will remain available until June 29.
What Is SIF and Why Is It Different?
SEBI introduced the SIF category to fill the gap between traditional mutual funds and PMS.
Mutual funds are simple and accessible, while PMS products offer more flexibility but require a much higher investment.
SIFs aim to provide some of the advanced investment strategies used in PMS while remaining more affordable.
Kotak’s new fund will invest in a mix of equities, arbitrage opportunities, and derivatives. The fund manager can increase or reduce market exposure depending on market conditions.
One key difference is that SIFs are allowed to take limited short positions. This means the fund may be able to generate returns even when markets are falling, something regular mutual funds generally cannot do.
Minimum Investment Starts at ₹10 Lakh
Investors need to invest at least ₹10 lakh in SIFs.
This places SIFs between mutual funds and PMS products:
Mutual Funds: Start from around ₹500
SIFs: Minimum ₹10 lakh
PMS: Usually require ₹50 lakh or more
Because of the higher investment requirement and more complex strategies, SIFs are mainly designed for experienced investors.
What Kotak AMC Says About the Fund
According to Nilesh Shah, Managing Director of Kotak Mahindra AMC, mutual funds have helped investors create wealth through long-term investing.
The SIF category adds more flexibility by using long-short strategies that can better handle market volatility.
Fund manager Kalpesh Jain said the Infinity Hybrid Long-Short Fund will actively use equity, arbitrage, and derivative strategies to reduce downside risk during volatile market conditions.
However, the company has also clarified that there is no guarantee that the fund will achieve its investment objectives.
Tax Rules Remain Investor-Friendly
One of the biggest advantages of SIFs is their tax treatment.
They are taxed similarly to equity mutual funds:
Long-term capital gains (LTCG) tax of 12.5% after one year
No tax at the fund level
This makes SIFs more tax-efficient than some alternative investment products, including certain Category III AIF structures.
Should You Invest?
Kotak’s launch marks another important step in the growth of the SIF category, which was introduced by SEBI in 2025. More asset management companies are expected to launch similar products in the coming months.
However, investors should remember that SIFs are more complex than regular mutual funds and carry the risk of capital loss.
Before investing, carefully read the scheme documents, understand the strategy being used, and make sure the product matches your risk profile and financial goals.
