‘People think SIFs are multibagger machines, but…’: Radhika Gupta of Edelweiss MF breaks down the hype on SIFs

Specialised Investment Funds, or SIFs, have quickly become the buzziest new product in India’s investment circles. Over the past few months, social media has been overflowing with excitement, with many investors assuming SIFs are the next big thing—high-return engines capable of delivering multibagger-style gains. But in her typically clear and grounded style, Radhika Gupta, MD & CEO of Edelweiss Mutual Fund, says the narrative needs a reality check.

Speaking on Mutual Fund Ki Baat, Gupta reminded investors that SIFs are not magic-return products. “At the end of the day, an SIF is still a mutual fund,” she said. What makes it different is not the promise of extraordinary returns, but the flexibility it grants the fund manager, particularly the ability to use shorting, derivatives and other tools that standard mutual funds cannot. And crucially, she emphasised, these tools exist mainly to reduce risk, not increase it.

According to Gupta, the best way to understand an SIF is to see it as a “middle path”—a product that sits comfortably between simple mutual funds and more complex alternatives like PMS or AIFs, which require much higher minimum investments of Rs 50 lakh to Rs 1 crore. In contrast, SIFs require a minimum ticket size of Rs 10 lakh, but they behave like a pooled, regulated vehicle. Investors don’t get customisation or concentrated, high-risk portfolios. Instead, they get a professionally managed product with a slightly richer toolkit.

Setting the right expectations is essential, Gupta stressed. An SIF equity fund, if run well, will likely behave like a flexi-cap fund—aiming for healthy long-term returns while offering better downside protection. A hybrid SIF may resemble a Balanced Advantage Fund but with more sophisticated levers to manage volatility. Even an SIF income fund can deliver stable returns by tapping into a wider set of fixed-income opportunities.

One area Gupta is particularly optimistic about is the Ex-Top-100 equity category. She believes that, with the right execution, SIFs operating in this space can potentially outperform mid-cap and small-cap indices, while using risk controls more thoughtfully than traditional funds. This is where, in her view, the extra flexibility of SIFs can genuinely shine.

The conversation also touched on the renewed excitement around gold and silver, both of which have rallied recently. Gupta cautioned investors against judging any asset class purely by its latest performance. Gold, she explained, plays a unique role in a portfolio—more like a “joker card” that protects during periods of equity stress. Silver, she added, behaves like gold’s mid-cap cousin: more aggressive, more volatile and capable of sharper swings.

For investors considering SIFs, Gupta offered a simple checklist. These products are meant for those who already understand mutual funds, appreciate the value of advanced strategies, and can comfortably invest ₹10 lakh or more. They are not suitable for investors chasing instant results or dramatic outperformance. Liquidity is better than PMS or AIF structures, taxation mirrors mutual funds, and risk is moderated—not amplified.

SIFs: What investors should know

SIFs are poised to reshape how affluent investors build portfolios. They combine the tax efficiency and regulatory simplicity of mutual funds with the strategic flexibility of sophisticated investment vehicles like PMS and AIF. In practical terms, this means fund managers can use long–short equity, structured credit and tactical hybrid allocations—strategies standard mutual funds cannot access.

Because of these tools, SIFs offer a deeper layer of diversification. They help portfolios reduce reliance on traditional equity-and-debt cycles, smooth volatility and aim for more consistent returns. They also serve as a strong “fixed-income plus” solution, targeting higher yields than traditional bonds without the full risk of equities.

As Gupta emphasised, SIFs are not about chasing extraordinary returns—they are about building smarter, more resilient portfolios.