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MUMBAI: A new class of high-ticket investment products, positioned for higher-risk investors, is drawing participation from cities beyond the top 30, early data shows.
SIFs, introduced by the Securities and Exchange Board of India (Sebi) in February 2025, were pitched as products for investors with a higher risk appetite than mutual funds, with a minimum ticket size of ₹10 lakh.
About 53% of investors in Specialised Investment Funds (SIF) are from beyond the top 30 cities, or B30 locations, according to an analysis by Computer Age Management Services (CAMS). These regions account for roughly 33% of total SIF assets. By contrast, B30 locations contribute 18.9% of overall mutual fund assets, as per the Association of Mutual Funds of India (Amfi).
The data, which covers CAMS-serviced asset management companies representing nearly 60% of SIF assets, refers to individual investors. SIFs managed ₹10,620 crore in assets across 11 schemes with 28,754 investors as of March-end. By comparison, India’s mutual fund industry had ₹73.73 trillion in assets under management (AUM).
In industry parlance, B30 locations refer to cities outside mutual fund hubs such as Mumbai, Kolkata, Ahmedabad, and Delhi.
Much of the early traction appears to be tied to how some distributors are framing hybrid long-short strategies as relatively conservative options offering slightly higher returns than fixed-coupon products.
Hybrid funds, in particular, are being pitched as conservative products with different classes of investors based on their risk appetite, making them well-suited for investors in tier-3 cities and beyond, said DP Singh, joint chief executive at SBI Mutual Fund.
“In our case, we are conveying hybrid funds as conservative products rather than aggressive ones. These are aimed at investors who can stay invested for 2-3 years and expect fixed-coupon type returns,” Singh added.
SBI Mutual Fund’s SIF scheme managed ₹3,314 crore in assets as of February-end.
This positioning is reflected in the product mix. Hybrid strategies account for about 75% of total SIF assets under management as of February-end, helping explain the stronger uptake of relatively conservative structures in smaller cities.
An assessment of risk profiles shows five of the six hybrid long-short funds fall in the low-risk category. The exception is the QSIF hybrid long-short fund managed by Quant Mutual Fund, which is categorized as higher risk.
Initially perceived as risky, SIFs, especially its long-short hybrid variant, have emerged as a relatively conservative option that cushions volatility while delivering 2–3% returns even in falling markets, said Syed Hassan, chief programme officer at CAMS.
Hybrid SIFs have been able to limit the downside in falling markets. Quant QSIF hybrid long-short fund returned 2.39% in the last three months, while SBI’s Magnum hybrid long-short fund fell 0.93% and Edelweiss Altiva hybrid long-short fund gained 1.2%, according to data from Value Research. In comparison, the Nifty 50 declined 5.76% over the same period.
The tilt towards conservative positioning is also visible in investor demographics. Nearly 30% of SIF investors are in the above-60 age bracket, according to CAMS.
At the same time, the breadth of participation may be influenced as much by distribution reach as by underlying demand.
The increased inflows from B30 cities may also reflect the role of large bank distributors and their branch networks, which can make participation appear broader than it is, according to Sirshendu Basu, head of product management and strategy at Bandhan AMC.
For Bandhan AMC, T30 cities contribute more than 95% of SIF AUM, Basu said. Its SIF schemes managed about ₹55 crore in assets as of February-end.
“In tier 2 and tier 3 cities, distributor acceptance has been stronger, which has helped drive SIF adoption. Distributors are able to effectively explain the need for portfolio hedging, especially during periods of heightened market volatility,” said Laukik Bagwe, fund manager and head, fixed income, ITI Mutual Fund, which managed ₹377 crore in assets as of February-end.
Early trends also show that distribution is being led largely by individual intermediaries rather than institutional platforms.
About 56% of regular SIF assets come from individual mutual fund distributors, according to CAMS. Registered investment advisers account for about 14%, while national distributors and public-sector banks contribute 13% each.
“The participation from institutional distributors remains low for most of them… their platforms are getting ready, there is limited staff who have cleared the exams, and onboarding of sub-brokers is taking some more time,” said Hassan of CAMS.
Anup Bhaiya, founder at Money Honey Financial Services Pvt Ltd and a SIF distributor, said that for an individual distributor, they just need to clear the exam and register.
“For banks, they need to build systems, define processes, and ensure compliance approvals. They also need clarity on who will handle this across branches. Until compliance signs off, they cannot onboard the product,” Bhaiya added.
Basu of Bandhan AMC said clearing the National Institute of Securities Markets certification remains a key challenge, with many distributors requiring multiple attempts. While interest is high across banks, wealth firms and independent distributors, they are at different stages of certification, he added.
Despite these constraints, the distributor base is expanding. The number of SIF-certified distributors has risen from about 4,800 in January to around 6,200 in March, according to CAMS.
Srushti is a markets reporter at Mint. She writes on equity markets, and her areas of coverage range from brokers and exchanges to mutual funds and the fast-evolving alternatives space, including GIFT City, from the financial capital of India. She has an experience of over three years in journalism, and has previously worked at Moneycontrol. She has an undergraduate degree in mass communication and a postgraduate diploma in business and financial journalism from Asian College of Journalism, Chennai.Srushti prefers meeting people from the industry over making calls. Her work aims to drive impact—her story on illegal gold imports, for instance, caught the government’s attention and contributed to a policy shift. She specialises in turning complex market data into clear, engaging stories so even her grandmother could understand futures and options.Outside of the newsroom, she enjoys spending money on jewellery and watching thriller films—especially the kind that keep her awake at night. She spends 1.5 hours a day commuting in Mumbai locals, listening to horror podcasts on her way to work. She’s also very talkative—so reach out only if you have lots of time.