SBI Mutual Fund, the country's largest mutual fund house, is now entering the world of Specialized Investment Funds (SIFs). This entry will be under its popular 'Magnum' brand, which has already gained a good reputation among investors. The company recently received a license to operate in this segment.
Information from the DMD and Joint CEO of SBI Mutual Fund
D. P. Singh, Deputy Managing Director and Joint CEO of SBI Mutual Fund, stated that the fund house is considering launching SIF products in the equity and hybrid segments. He mentioned that the 'Magnum' brand is associated with the company's existing schemes, therefore, the new SIF products will be launched in the market under the same brand name.
Gaurav Mehta appointed to lead the SIF venture
SBI Mutual Fund has selected Gaurav Mehta to lead the SIF venture. He has been working as the Chief Investment Officer – Alternatives (Equity) at SBI Funds Management since October 2021. The company plans to leverage the expertise of its existing investment team to operate these new funds.
SBI becomes the fifth fund house to enter SIF
SBI Mutual Fund has become the fifth fund house in the country to enter the SIF segment. Previously, Edelweiss, ITI, Mirae Asset, and Quant have received licenses for this area. Additionally, Axis Mutual Fund and Nippon India also plan to enter this segment.
What is SIF, i.e., Specialized Investment Fund?
SIF, or Specialized Investment Fund, is a new and specialized product segment within the mutual fund structure. The structure of this fund differs from traditional mutual funds. It offers investors the option to invest with new strategies and greater flexibility.
The minimum investment amount in SIF is set at ₹10 lakh. These funds can be launched in all three categories: equity, debt, and hybrid. Their aim is to target informed investors who better understand market complexities and strategic investment.
Open freedom in investment strategy
Fund managers get more freedom and flexibility under SIF. They can experiment with various complex strategies, from long-short strategies to sector-based rotation. This is different from traditional funds where the rules and scope of fund management are limited.
Benefit of SBI MF's old 'Magnum' identity
SBI Mutual Fund has chosen to use the 'Magnum' name for the new SIF products because this brand name has already become a symbol of trust among investors. Several old schemes like ‘Magnum Equity’, ‘Magnum Taxgain’ etc. are already present in the market. This will make it easier for investors to connect with this new product.
What will be the options in SIF? Know the structure set by SEBI
Currently, a maximum of seven products can be launched under SIF. These are:
In the Equity Category:
- Equity Long-Short
- Equity X-Top 100 Long-Short
- Sector Rotation Long-Short
In the Hybrid Category:
- Active Asset Allocator Long-Short
- Hybrid Long-Short
In the Debt Category:
- Long-Short
- Sector Long-Short
Through these categories, fund managers can strategize according to market trends by taking long and short positions together in various sectors.
Competition is increasing in the SIF segment
As mutual fund companies enter this specialized segment, competition is also intensifying. Only fund houses with large investment teams, in-house research, and a b distribution network will be able to survive in this segment.
