Three products above a regular scheme, one table, and the four checks we run before suggesting any of them.
Three products sit above a regular mutual fund scheme in India, each with a SEBI-set minimum ticket. The minimum is the easy part; the harder question is whether your plan needs what the product offers. Here is the comparison we walk clients through.
| Specialised Investment Fund (SIF) | Portfolio Management Services (PMS) | Alternative Investment Fund (AIF) | |
|---|---|---|---|
| Minimum | ₹10 lakh (across a fund house's SIF strategies) | ₹50 lakh | ₹1 crore |
| Run by | Mutual fund houses (AMCs) under SEBI's SIF framework | SEBI-registered portfolio managers | SEBI-registered AIF managers, by category |
| Where the money sits | Units in the fund, like a scheme | Your own demat account | Units in a pooled fund |
| Liquidity | Per the strategy's redemption terms; some are interval-based | Usually redeemable with notice; exit loads in early years | Locked in for the fund's term (typically several years) |
| What it can do that a scheme cannot | Long-short positions, more concentration, derivatives within limits | Concentrated, manager-specific strategies; direct stock ownership | Private credit, unlisted, structured, long-short with leverage |
| Fees | Expense ratio, capped like mutual funds | Fixed and/or performance fee per agreement | Management + performance fee; set-up costs |
| Tax | As applicable to the underlying fund type | You are taxed on each stock transaction as if you traded it | Category II pass-through; Category III taxed at fund level |
SIF suits an investor who already has a diversified mutual fund core and wants a strategy — a long-short or a more concentrated equity book — without the PMS ticket size. It is new; track records are short. PMS suits someone with ₹50 lakh they can commit to a single manager's approach for five years or more, who wants direct ownership and can accept the tax friction of stock-level churn. AIF suits a large, already diversified portfolio that can lock away ₹1 crore for the fund's term and absorb a loss on that slice without touching the plan.
First, whether the mutual fund core is complete — most portfolios that ask about PMS have gaps a good hybrid or index fund would fill more cheaply. Second, the fee against what the product is expected to add, in writing. Third, liquidity: nothing in these products should be money you might need within five years. Fourth, concentration: how much of the family's total sits with one manager or one strategy.
Distribution note: PMS distributors are required to be registered with APMI, and SIF distribution requires an additional NISM certification.
The first conversation is free. Request a call back and bring your current holdings; we will tell you whether any of these three has a place in the plan — and, quite often, that none of them does yet.
Seed Investments is an AMFI-registered Mutual Fund Distributor (ARN-136455) and does not provide investment advice. This guide is educational; it is not a recommendation to buy or sell any scheme. Mutual fund investments are subject to market risks; read all scheme related documents carefully before investing. Tax rules change — check the position for your year with your tax consultant.
Thirty minutes. You leave with a written summary — whether or not you become a client.