How much should investors read into specialised investment fund's early returns?

₹2,010.44 crore at the end of October 2025 (when Amfi released SIF numbers after first launch in September) to ₹9,710.87 crore at the end of February.These will also give sophisticated investors a variety of options in the category, which was dominated by hybrid long-short strategies that use equities, debt, and derivatives to balance risk and returns during the initial phase.Unlike a mutual fund that takes only long positions—buying and holding stocks to benefit when prices rise—SIFs can employ both long and short strategies. In other words, SIFs are not dependent only on upward market movement and can also generate returns in a bearish market.

By using equity derivatives, they can profit even when prices fall. This flexibility allows fund managers to take positions based on whether they expect prices to rise or decline, and earn profits if their market view is correct.Mint spoke to various industry players to understand who these products are built for and whether they should consider their performance during the limited time they have been operational.The early picture shows that these funds have performed slightly better than mutual funds when Nifty 500 fell around 14% from 1 January-31 March as the West Asia conflict escalated at the end of February on top of the constant selling by foreign investors amid high valuations.According to Value Research data, hybrid long-short funds, where most of the current AUM is concentrated, delivered an average negative three-month return of 3.1% as of 31 March.During the same period (1 January- 31 March), their benchmark, the Nifty 50 Hybrid Composite Debt 50:50 index fell 7.8%.