SIFs face a bottleneck: Too few hands to sell India’s newest funds

For now, industry leaders are aligned that measured growth is not a weakness but a necessity. By steadily expanding distributor capacity and investing in training, AMCs are laying the groundwork for wider adoption. As funds begin to demonstrate performance, the hope is that, investor confidence too will follow.

Despite a wave of recent launches by AMCs, the success of Specialised Investment Funds (SIFs) has hinged heavily on building a strong distribution capacity. With requirements of exams, training and preparedness slowing down growth, fund houses are now racing to expand capacity before investor demand gathers pace.

Specialised Investment Funds (SIFs), India’s newest investment category, are entering the market but distribution network remains a key constraint. Only 1,500 distributors are currently certified to sell these products, reflecting the steep entry barrier as well as the early stage of the fund category.

AMCs and industry bodies acknowledge the slow start but are pushing ahead with training and support to build a sustainable distribution base.

Distributor pool playing catch-up

Syed Hassan, Chief Program Officer at CAMS said the number of registered distributors has surged from 248 at the end of July to around 1,500 in just 50 days. “We are seeing roughly one new registration per hour,” he said, adding that the base could reach 3,000–5,000 by year-end. Most new sign-ups are individual distributors, though wealth platforms and banks are also entering.

The total number of mutual fund distributors in India stand at nearly 2 lakh, but this may not be a fair comparison, given that mutual fund is a mass market product while SIFs are a sophisticated product targetting high networth individuals (HNIs).

Bhavesh Jain, Co- Head, Factor Investing, Edelweiss MF, said the limited distributor pool must be seen in the context of the target market. “SIFs are designed for ultra-HNIs, HNIs, and family offices, so even a small base can cater to large ticket sizes,” he said.

Quant Mutual Fund, along with SBI MF and Edelweiss, is among the first to bring products to market.

DP Singh, Deputy MD and Joint CEO of SBI Mutual Fund said their initial focus will be on wealth management clients such as family offices, supported by distributor education. “Our goal is to enable decisions on the merits of the product, not just because it’s a new fund launch,” he said.

AMC-led training and support

The complexity of SIFs has meant that certification has become the main bottleneck in expanding the distributor base. Passing the NISM XIII exam is mandatory, but limited slots, subject matter, and costs have slowed uptake. Several distributors are intimidated by the NSIM course that combines modules on equity, interest rate and currency derivatives. To address this, AMCs are rolling out structured engagement, training sessions, and knowledge resources to prepare distributors.

The 'NISM Series XIII: Common Derivatives Certification' examination is designed for professionals working in the securities markets, involving derivatives trading and related activities, such as traders, dealers, and other associated persons working with registered intermediaries in the derivatives market. Mutual fund distributors selling specialized investment funds are also required to obtain it. Even within wealth tech distribution platforms, investor facing support roles (such as client services) and research teams are required to clear the exam.

AMCs are taking steps to address this concern. SBI MF's DP Singh said, “We will provide educational material across platforms so both investors and distributors can understand the products and make informed choices.”  Even Edelweiss Mutual Fund has also conducted physical three-day programs along with online sessions to help distributors appear and clear the derivatives exam. So far, they have trained around 2,000 distributors and are continuing to train as per demand.

Mirae Asset, which is preparing to launch its first SIF, is also prioritising distributor readiness. “Higher standards ensure stronger quality of distribution and ultimately build greater investor trust,” said Suranjana Borthakur, Head of Distribution and Strategic Alliances. “We are focused on structured training, resources, and handholding so distributors can approach investors with conviction.”

AMFI Chair Venkat Chalasani noted that distributor registrations are rising steadily at about 500 a month, and special industry-wide measures could be introduced if required.

Building confidence takes time

Both industry experts and distributors agree that adoption will remain gradual until SIFs establish a performance track record. Santosh Joseph of Germinate Investment Services compared the rollout to the slow and steady rollout of AIFs in 2013-14. Scripbox’s Sachin Jain added that the product's availability will be critical, “Once a ready pipeline exists, the distribution community will follow.”

Ionic Wealth’s Dharmendra Jain said platforms are already enabling SIF investments and collaborating with AMCs through knowledge sessions. “It’s a coming of age for Indian markets and we feel that this category will grow significantly soon,” he said.

For now, measured growth is not being seen as weakness but a necessity. By steadily expanding distributor capacity and investing in training, AMCs are laying the groundwork for wider adoption. As funds begin to demonstrate performance, the hope is that, investor confidence too will follow.

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