What is the story about?
ICICI Prudential Mutual Fund has filed draft documents with the Securities and Exchange Board of India (SEBI) to launch its Specialised Investment Fund (SIF) platform, branded iSIF, marking its formal entry into a newly created category of regulated investment products aimed at affluent investors.
Specialised Investment Funds are a recent regulatory innovation by SEBI, positioned between traditional mutual funds and alternative investment funds. The framework allows fund houses greater flexibility in portfolio construction while remaining within a mutual fund–like regulatory architecture. Investments in SIFs are permitted only for investors committing ₹10 lakh and above at the PAN level.
ICICI Prudential’s proposed iSIF platform will be housed within ICICI Prudential Mutual Fund, which is registered under the SEBI (Mutual Funds) Regulations, 1996. However, SEBI mandates a distinct brand identity for SIFs to clearly separate them from the core mutual fund business. In line with this requirement, the fund house has adopted the iSIF brand, with a separate logo and product architecture, even as the strategies continue to be offered by the same asset management company.
Unlike conventional mutual fund schemes, each SIF offering is structured as a distinct investment strategy, supported by a dedicated Investment Strategy Information Document (ISID) detailing objectives, asset allocation and risk factors.
Among the first equity strategies filed is the iSIF Equity Ex-Top 100 Long-Short Fund, an open-ended strategy focused primarily on mid-cap and small-cap stocks, with the flexibility to take limited short positions through derivatives.
The strategy seeks long-term capital appreciation by investing in companies outside the top 100 by market capitalisation. At least 65% of the portfolio will be invested in mid-cap and small-cap stocks, while the balance may be allocated to large-caps. Derivatives may be used selectively for risk management or to take tactical bearish positions.
The fund house has also filed papers for a hybrid long-short strategy, which combines equity and debt exposure and allows limited short positions in both asset classes. Hybrid strategies are designed to dynamically adjust asset allocation in response to market conditions.
Under this strategy, 65–75% will be invested in equity and 25–35% in debt, with unhedged short exposure through derivatives capped at 25%. Given the use of unhedged positions, the equity and debt mix may vary based on market dynamics.
Overall, SEBI permits seven investment strategies under the SIF framework — three equity, two debt and two hybrid. Across all categories, unhedged short exposure through derivatives is capped at 25% of net assets, ensuring leverage remains controlled.
From an investor standpoint, SIFs retain several features familiar to mutual fund investors. Subscriptions are permitted on a daily basis across strategies. Redemption frequencies vary by asset class — daily or lower for equity strategies, weekly or lower for debt strategies, and up to twice a week for hybrid strategies. Taxation and total expense ratio norms are aligned with mutual fund regulations, based on the underlying asset allocation.
A key safeguard is the minimum investment threshold. Investors are required to maintain an aggregate investment of at least ₹10 lakh across all iSIF strategies at all times, although this requirement does not apply to accredited investors. Switching between mutual fund schemes and SIF strategies is not allowed.
Importantly, the same fund management teams that manage ICICI Prudential’s mutual fund schemes will also oversee the iSIF strategies.
With this filing, ICICI Prudential Mutual Fund joins the early movers in operationalising SEBI’s SIF framework, offering investors access to more sophisticated long-short and tactical strategies within a regulated structure.
Specialised Investment Funds are a recent regulatory innovation by SEBI, positioned between traditional mutual funds and alternative investment funds. The framework allows fund houses greater flexibility in portfolio construction while remaining within a mutual fund–like regulatory architecture. Investments in SIFs are permitted only for investors committing ₹10 lakh and above at the PAN level.
ICICI Prudential’s proposed iSIF platform will be housed within ICICI Prudential Mutual Fund, which is registered under the SEBI (Mutual Funds) Regulations, 1996. However, SEBI mandates a distinct brand identity for SIFs to clearly separate them from the core mutual fund business. In line with this requirement, the fund house has adopted the iSIF brand, with a separate logo and product architecture, even as the strategies continue to be offered by the same asset management company.
Unlike conventional mutual fund schemes, each SIF offering is structured as a distinct investment strategy, supported by a dedicated Investment Strategy Information Document (ISID) detailing objectives, asset allocation and risk factors.
Among the first equity strategies filed is the iSIF Equity Ex-Top 100 Long-Short Fund, an open-ended strategy focused primarily on mid-cap and small-cap stocks, with the flexibility to take limited short positions through derivatives.
The strategy seeks long-term capital appreciation by investing in companies outside the top 100 by market capitalisation. At least 65% of the portfolio will be invested in mid-cap and small-cap stocks, while the balance may be allocated to large-caps. Derivatives may be used selectively for risk management or to take tactical bearish positions.
The fund house has also filed papers for a hybrid long-short strategy, which combines equity and debt exposure and allows limited short positions in both asset classes. Hybrid strategies are designed to dynamically adjust asset allocation in response to market conditions.
Under this strategy, 65–75% will be invested in equity and 25–35% in debt, with unhedged short exposure through derivatives capped at 25%. Given the use of unhedged positions, the equity and debt mix may vary based on market dynamics.
Overall, SEBI permits seven investment strategies under the SIF framework — three equity, two debt and two hybrid. Across all categories, unhedged short exposure through derivatives is capped at 25% of net assets, ensuring leverage remains controlled.
From an investor standpoint, SIFs retain several features familiar to mutual fund investors. Subscriptions are permitted on a daily basis across strategies. Redemption frequencies vary by asset class — daily or lower for equity strategies, weekly or lower for debt strategies, and up to twice a week for hybrid strategies. Taxation and total expense ratio norms are aligned with mutual fund regulations, based on the underlying asset allocation.
A key safeguard is the minimum investment threshold. Investors are required to maintain an aggregate investment of at least ₹10 lakh across all iSIF strategies at all times, although this requirement does not apply to accredited investors. Switching between mutual fund schemes and SIF strategies is not allowed.
Importantly, the same fund management teams that manage ICICI Prudential’s mutual fund schemes will also oversee the iSIF strategies.
With this filing, ICICI Prudential Mutual Fund joins the early movers in operationalising SEBI’s SIF framework, offering investors access to more sophisticated long-short and tactical strategies within a regulated structure.
