For MFDs, SIFs offer an opportunity to go beyond mutual funds and deliver greater value to clients

SIFs — What You Need to Know

Mutual funds are long-only products — they rely on markets going up, making returns linear and correlated. SIFs can use derivatives to create differentiated outcomes, participate in rising markets while limiting downside, and deliver returns less dependent on overall market direction. This makes them a genuine portfolio diversifier.

Early Winners: Conservative Hybrid Strategies

In the early phase, simpler strategies are likely to gain traction first. Conservative hybrid SIFs use derivatives to enhance yield and manage downside risk — maintaining a familiar risk profile investors already understand, but with potentially better outcomes. That familiarity makes them easier to explain and scale.

SIFs vs Cat III AIFs — Why This Time Is Different

Category III AIFs faced challenges due to high fund-level taxation and limited transparency from their private structure. SIFs address both issues through cleaner taxation and the transparency, disclosures, and governance standards associated with the mutual fund framework.

Derivatives — From Fear to Tool

Derivatives often carry a perception of risk because of their association with leverage. However, regulators have not permitted leverage in SIFs. Here, derivatives are primarily used as a risk management tool — helping limit losses and build more predictable return profiles.

Mirae Asset's Approach

Rather than rushing to market, Mirae Asset is focused on building genuinely differentiated strategies backed by strong conviction — designed to perform across both rising and falling markets, instead of simply chasing short-term trends.

This is a brief summary of SIFs and their potential benefits for investors and MFDs. To know more in detail, click here .