Derivatives and exposure limits · a SIF concept, explained from SEBI’s rules.
In one line
The total of a strategy's positions across cash securities and derivatives, as a share of its net assets. For a SIF it may not exceed 100%, so a SIF cannot be leveraged.
The cumulative gross exposure through equity, debt, derivatives (including commodity and fixed-income derivatives), repo, credit default swaps, REITs, InvITs and other permitted assets may not exceed 100% of the strategy's net assets (circular para 6.1.5). Total exposure is the sum of exposure in the cash and derivatives markets (para 6.1.3), after the offsetting SEBI permits (para 6.1.4).
Sources: SEBI circular on the SIF framework, 27 Feb 2025
SEBI's illustration. In SEBI's second example portfolio for a ₹100 crore strategy: ₹62.5 crore in equity, ₹10 crore in long futures and options, ₹2.5 crore in cash and a ₹25 crore unhedged short through futures (circular, Annexure A1).
Every SIF strategy type, within each strategy’s own offer document. All 36 live strategies are listed on our tracker; each one’s offer document sets its own limits within SEBI’s.
No. A SIF is a mutual fund product with statutory limits: unhedged short exposure of at most 25% of net assets, and total gross exposure across all holdings and derivatives of at most 100% of net assets, which rules out leverage. Hedge-fund-like strategies in India sit in Category III AIFs, which have a ₹1 crore minimum and different rules.
The 25% caps unhedged short positions; the 100% caps everything the strategy holds, long and short, after the offsetting SEBI permits (circular paras 6.1.1 and 6.1.5).
Explanation only, not a recommendation. Trustner Asset Services Pvt. Ltd. is an AMFI-registered Mutual Fund & SIF Distributor (ARN-286886) and may receive commission from fund houses. Investments in Specialized Investment Fund involves relatively higher risk including potential loss of capital, liquidity risk and market volatility. Please read all investment strategy related documents carefully before making the investment decision.