Syed Hassan, Chief Program Officer, Computer Age Management Services (CAMS) reveals that out of the total SIF AUM of Rs. 6,215 crore, around Rs. 4,381 crore, or 70.5%, has come through regular plans, compared to Rs. 1,833 crore, or 29.5%, through direct channels.
This underlines the central role that the MFDs can play in the growth of the category, said Hassan.
Hasan further said that mutual fund distributors (MFDs) looking to enter the Specialized Investment Funds (SIF) space must first focus on understanding the product, identifying the right investors and building credibility before aggressively selling the category.
Speaking at the Cafemutual SIF Summit 2026, Hassan said SIFs are now moving from innovation to adoption stage but distributors need to approach the category with caution and clarity rather than treating it as another conventional mutual fund offering.
Credibility is the first currency
Outlining what distributors need to know before recommending these products to clients, Hassan said, “Credibility is the first currency for MFDs to sell SIFs. Traditional MFs are like cars with only forward gear while SIFs come with a reverse gear and a brake also in the form of shorting and derivative use, respectively,”
Because of this additional sophistication, Hassan stressed that MFDs need to first educate themselves thoroughly about the nuances, risks and portfolio behavior of SIF products before introducing them to investors.
Start small
He advised distributors not to rush the process and begin cautiously by allocating only 5 – 10% of client portfolios initially. He also advised them to be careful in selecting AMCs and fund managers, and closely monitoring costs and performance over time.
Suitable client base
According to Hassan, SIFs may not be suitable for investors who have accumulated around Rs. 10 lakh primarily for financial goals or emergencies, are uncomfortable with volatility, have not witnessed a complete market cycle or the investors who are unwilling to stay invested beyond five years.
Syed said that suitable SIF investors can be those who understand market cycles, can tolerate volatility and are looking for sophisticated portfolio construction and tax-efficient strategies. He pointed out that India’s mutual fund industry already has a sizeable base of affluent investors who could potentially become SIF investors.
Hassan said there are over 50 lakh investors with more than Rs. 50 lakh invested in a single AMC, while over 20 lakh investors already hold more than Rs. 10 lakh in mutual funds. Additionally, around 10 lakh investors have invested more than Rs. 10 lakh through lumpsum investments over the last three years.
These investors could become the natural target audience for SIFs, Hassan added.
Different conversations with different set of clients
He also highlighted that MFD conversations with clients would now need to evolve beyond traditional return-based discussions. He claimed that the MFDs need to hold two different sets of conversations with two different type of potential clients.
The first should focus on wealth preservation and tax efficiency for affluent investors, while the second should revolve around sophisticated investment strategies for investors seeking advanced portfolio solutions.
Hassan added that tax efficiency could become one of the strongest selling points for the category among HNIs and UHNIs. “Sales is vanity, profit is sanity and cash is reality,” he remarked while discussing why affluent investors may increasingly consider SIF structures.
Cross-selling opportunity
He also highlighted a major cross-selling opportunity for distributors by noting that 95% of SIF investors currently invest through only one AMC, while just 4.9% investors have folios in multiple AMCs.
At the same time, Hassan said, SIFs are attracting a broader mix of investors than initially expected. These include F&O traders, direct equity investors, investors from physical asset classes such as gold and real estate, as well as Gen Z and millennial investors looking for more sophisticated investment products.
Interestingly, 1,497 investors have entered the mutual fund ecosystem for the first time through SIFs, contributing Rs. 214 crore in assets. And of these, 97 investors entered directly through exchange platforms, which Hassan suggested may indicate participation from active F&O traders moving into regulated investment structures.