Are SIFs actually better than mutual funds, or are they just a new product category?

Published 19 September 2026

Tushar from Bangalore

SIFs seem to offer more flexibility, long-short strategies and more complex portfolio construction. Does that automatically make them better than regular mutual funds?

Sachin Kabra ex-Director HDFC Private Wealth, Business Head Motilal Oswal AMC LinkedIn

No. SIFs are a useful innovation, but they are not automatically superior to your existing mutual funds.

They bring more flexibility, but with that flexibility comes more complexity, more dependence on the fund manager and a wider range of possible outcomes.

For most investors, conventional mutual funds should continue to form the core part of the portfolio.

An SIF should be added only when it solves a clearly identified portfolio problem.

The right starting question is not “Which SIF has given the highest return?” but “What job will this SIF perform in my portfolio?”

“SIFs are a useful innovation, but they are not automatically superior to your existing mutual funds.”

“SIFs should be added only when they solve a clearly identified portfolio problem.”

This is not personalized investment advice. Your portfolio, goals, liquidity needs and risk tolerance may be different, so assess your own situation and discuss it with your financial advisor.

Ask Sachin

Get your question answered by our advisor.

More from Sachin Kabra

Mohita from Varanashi

If equity has the highest long-term return, why should I hold debt or gold at all?

If I have a 15–20 year investment horizon, wouldn’t I be better off putting everything into equity? What is the point of holding lower-return assets like debt or gold?

Ritik from Mumbai

Won’t diversification reduce my returns compared with just holding 100% equity?

If debt, gold and international equity can underperform Indian equity for years, doesn’t adding them just reduce my overall returns? What am I actually getting in exchange?

Sumit from Pune

I need money in 3 years. Should any of that money be in equity?

I have a financial goal about three years away, but I don’t want the money sitting in a low-return investment. Should I invest some of it in equity and hope for better returns?

Raj from Noida

Does international equity really make sense for an Indian investor?

Most of my income, house and investments are already in India. Is there actually a reason to hold international equity even if Indian markets could outperform global markets?

Sneha from Kochi

How often should I rebalance my portfolio?

If my target allocation changes because equity rallies or crashes, when should I actually rebalance? Should I do it every year or only when allocations move significantly?