SIF Categories & Taxation Explained: How They Compare To Mutual Funds, Equity & Debt

Specialised Investment Funds (SIFs) are creating new possibilities for investors looking beyond traditional mutual funds. In this conversation, we break down how SIFs are structured, the three core categories (Equity, Debt and Hybrid), and the seven strategy types allowed under SEBI rules - including long-short, sector rotation and multi-asset allocation. The key differentiator is flexibility: SIFs can use derivatives and hedging tools to manage risk and capture opportunities in both rising and falling markets. On taxation, SIFs are treated just like mutual funds, with equity-oriented SIFs taxed like equity funds and debt/hybrid taxed accordingly based on asset mix. For investors exploring smarter, more tactical allocation beyond standard MF products, SIFs offer a regulated and structured pathway.