SIFs could eventually account for 40-50% of active equity product: Quant’s Sandeep Tandon

Sandeep Tandon, Founder and CIO, Quant Mutual Fund

The newly introduced Specialized Investment Fund (SIF) structure could reshape India’s mutual fund industry, eventually accounting for as much as 40–50% of the country’s active equity mutual fund space, according to Quant Mutual Fund’s CIO and founder Sandeep Tandon. He was speaking at a panel in Moneycontrol’s Mutual Fund Summit, held in Bangalore on October 27.

Calling SIFs a “very innovative product”, Tandon said the framework combines “the huge tech efficiency and transparency of mutual funds” with far greater flexibility in managing risk. He described it as a powerful new tool for fund managers. “The regulator has given us an important weapon,” he said. “It’s up to us how we use it — whether aggressively or conservatively.”

Tandon explained that SIFs allow portfolio managers to use derivatives not for leverage, but for risk control and return stabilization. “You can control at least some dimensions of risk,” he said, calling SIFs “a better beta management product” than traditional equity schemes.

He emphasized that SIFs should not be viewed in isolation but as a complement to existing mutual funds. “Don’t look at this product in isolation,” Tandon said. “You look at this product in combination — mutual fund and SIF put together. That is a better way of handling this product.”

Placing the new category in a broader context, Tandon said similar “wealth preservation products” have already gained prominence globally under names such as “market neutral,” “data neutral,” and “absolute return.” As India transitions toward becoming a $10-trillion economy, he believes such risk-managed strategies will become integral to wealth management.

“If I were to take a very big call in the next 10 years,” he said, “I think it has the potential to be 40–50% of the active mutual fund equity product — that’s the potential based on global trends.”

Quant has already rolled out its initial SIF offerings and expects to have five funds in place by December. Tandon said investor adoption would likely build gradually. “It takes time gradually,” he said. “Initially two or three years will be a slow process, and maybe third year onwards, it will start picking up when some traction is there.” He encouraged investors to test the concept before committing larger allocations. “(I tell people) Just put Rs 10 lakh only, experience this product,” he said. “Once you experience it, you will understand its importance — and then the traction will start.”

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