What should I actually check before choosing an SIF?
Published 19 September 2026
There are now multiple SIF categories and strategies. Instead of looking at recent performance, what questions should I ask before selecting one?
Start by asking what the fund is replacing in your existing portfolio.
Is it replacing debt, arbitrage or equity savings? Is it competing with your flexi-cap fund? Or are you using it as a higher-risk satellite allocation?
Then ask what the normal net equity exposure and short exposure may be, rather than looking only at the permitted allocation range.
You should also understand where the returns are expected to come from: long equity, debt, arbitrage, covered calls, IPOs, special situations or tactical asset allocation.
Then ask what can go wrong. Could the long and short books both lose money? Is there credit risk? Is there liquidity risk? Can an allocation model remain wrong for a long period?
Finally, check how quickly you can exit, along with TER, brokerage, exit load and tax implications.
The more complicated the return engines, the more important it becomes to understand the fund-management process.
“The first question is: what is this fund replacing?”
“The more return engines the fund has, the more important it becomes to understand the fund-management process.”
This answer is derived from Sachin Kabra’s video on Specialized Investment Funds.
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.
Is it replacing debt, arbitrage or equity savings? Is it competing with your flexi-cap fund? Or are you using it as a higher-risk satellite allocation?
Then ask what the normal net equity exposure and short exposure may be, rather than looking only at the permitted allocation range.
You should also understand where the returns are expected to come from: long equity, debt, arbitrage, covered calls, IPOs, special situations or tactical asset allocation.
Then ask what can go wrong. Could the long and short books both lose money? Is there credit risk? Is there liquidity risk? Can an allocation model remain wrong for a long period?
Finally, check how quickly you can exit, along with TER, brokerage, exit load and tax implications.
The more complicated the return engines, the more important it becomes to understand the fund-management process.
“The first question is: what is this fund replacing?”
“The more return engines the fund has, the more important it becomes to understand the fund-management process.”
This answer is derived from Sachin Kabra’s video on Specialized Investment Funds.
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.