Key Takeaways
- • According to an Ionic Wealth study, equity long-short SIFs were down 1.8% year-to-date as of 15 October 2026, versus a 6.9% decline for large-cap mutual funds and a 11.7% fall in the Nifty 50.
- • Equity long-short SIFs recorded a downside capture ratio of 59% during the 2 January to 30 March 2026 selloff, when the Nifty 50 fell 15.2%, compared with 92% for large-cap mutual funds and 90% for flexi-cap funds.
- • During the 30 March to 3 August 2026 recovery, when the Nifty 50 gained 10.9%, equity long-short SIFs posted an upside capture ratio of 117%, below 133% for large-cap funds and 170% for flexi-cap funds.
- • SIFs are a SEBI-regulated product introduced in 2025 with a minimum investment of ₹10 lakh, and their ability to take short positions is the key structural difference from mutual funds.
- • Ionic Wealth suggests SIFs could serve as a satellite allocation alongside a diversified core mutual fund portfolio, suited to investors who understand derivatives and short-selling risks.
Summary
According to a study by Ionic Wealth reported by Livemint, Specialised Investment Funds (SIFs), a SEBI-regulated product introduced in 2025 with a minimum investment of ₹10 lakh, delivered mixed year-to-date results against conventional mutual funds as of 15 October 2026. The study covered only the seven schemes with track records dating back to 1 January 2026, given the products' recent launch. The first SIF was launched on 25 September 2025.
Year-to-date, hybrid long-short SIFs returned 9.6%, equity ex-top 100 long-short SIFs gained 13.1%, and equity long-short SIFs declined 1.8%. Over the same period, the Nifty 50 fell 11.7% and the Nifty 500 fell 6.9%. Among mutual fund categories, large-cap funds were down 6.9%, flexi-cap funds down 1.6%, balanced advantage funds down 1.5%, mid-cap funds up 1.9%, small-cap funds up 11.4%, and multi-asset allocation funds up 0.2%.
The study measured downside and upside capture across two market phases. Between 2 January and 30 March 2026, when the Nifty 50 fell 15.2%, large-cap and flexi-cap mutual funds recorded downside capture ratios of 92% and 90%, while equity long-short SIFs recorded 59%, indicating stronger downside protection. During the recovery from 30 March to 3 August 2026, when the Nifty 50 gained 10.9%, equity long-short SIFs captured 117% of the index's gains, compared with 133% for large-cap funds and 170% for flexi-cap funds. The findings suggest SIFs limited losses in the decline but participated less fully in the rebound.
Ionic Wealth attributes the difference to SIFs' ability to take short positions, allowing managers to reduce net market exposure when they expect declines. Mutual fund managers cannot take direct short positions and, in many categories, must maintain minimum equity allocations. The study suggests SIFs need not replace existing mutual fund holdings and could serve as a satellite allocation for investors who understand derivatives and short-selling risks and can tolerate volatility and potential capital losses. The article notes that suitability depends on individual goals, risk appetite and time horizon, and recommends consulting a SEBI-registered advisor.
Year-to-date, hybrid long-short SIFs returned 9.6%, equity ex-top 100 long-short SIFs gained 13.1%, and equity long-short SIFs declined 1.8%. Over the same period, the Nifty 50 fell 11.7% and the Nifty 500 fell 6.9%. Among mutual fund categories, large-cap funds were down 6.9%, flexi-cap funds down 1.6%, balanced advantage funds down 1.5%, mid-cap funds up 1.9%, small-cap funds up 11.4%, and multi-asset allocation funds up 0.2%.
The study measured downside and upside capture across two market phases. Between 2 January and 30 March 2026, when the Nifty 50 fell 15.2%, large-cap and flexi-cap mutual funds recorded downside capture ratios of 92% and 90%, while equity long-short SIFs recorded 59%, indicating stronger downside protection. During the recovery from 30 March to 3 August 2026, when the Nifty 50 gained 10.9%, equity long-short SIFs captured 117% of the index's gains, compared with 133% for large-cap funds and 170% for flexi-cap funds. The findings suggest SIFs limited losses in the decline but participated less fully in the rebound.
Ionic Wealth attributes the difference to SIFs' ability to take short positions, allowing managers to reduce net market exposure when they expect declines. Mutual fund managers cannot take direct short positions and, in many categories, must maintain minimum equity allocations. The study suggests SIFs need not replace existing mutual fund holdings and could serve as a satellite allocation for investors who understand derivatives and short-selling risks and can tolerate volatility and potential capital losses. The article notes that suitability depends on individual goals, risk appetite and time horizon, and recommends consulting a SEBI-registered advisor.
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