Specialized Investment Fund

What is a key purpose of a Specialized Investment Fund (SIF)?

• To serve general retail investors with low risk tolerance.

• To offer standardized investment schemes to the masses.

• To bridge the gap between traditional mutual funds and portfolio management services (PMS).

• To eliminate all market risk for investors.

As per SEBI's framework, what is the typical minimum investment threshold for a Specialized Investment Fund (SIF)?

• ₹500

• ₹10,000

• ₹1 lakh

• ₹10 lakh

What is a key risk associated with investing in Specialized Investment Funds (SIFs)?

• Lack of access to niche markets.

• Higher liquidity compared to traditional mutual funds.

• Lower potential for returns due to stringent regulations.

• Lower liquidity and potential lock-in periods.

Which type of investor is best suited for Specialized Investment Funds (SIFs)?

• Beginners or new investors seeking simple strategies.

• Investors with a low risk appetite and who need daily liquidity.

• Experienced or high-net-worth individuals (HNIs) who can tolerate higher risk.

• Investors who require guaranteed, fixed returns.

What is a common investment strategy allowed for Equity-Oriented Specialized Investment Funds (SIFs)?

• Investing only in government bonds.

• Taking long and short equity positions using derivatives.

• Only investing in the top 100 stocks by market capitalization.

• Keeping 100% of the portfolio in cash and money market instruments.

What is the rule regarding leverage for Specialized Investment Funds (SIFs) in India?

• SIFs are permitted to use unlimited leverage.

• SIFs are not permitted to use any leverage.

• SIFs can take unhedged short exposure up to 25% of their NAV, but are not permitted to use additional leverage beyond this limit.

• The use of leverage is mandatory for all SIFs.

When can an Asset Management Company (AMC) require an investor to exit a SIF?

• When the fund's NAV experiences a passive breach due to market movements.

• When the investor's total investment actively falls below the minimum threshold.

• When the fund's overall AUM drops below a certain level.

• When the investor's SIP payments cease.

How can investors in interval or closed-ended SIFs gain liquidity?

• Through daily redemption options.

• By selling their units on a recognized stock exchange where the funds are listed.

• By requesting a direct, immediate withdrawal from the fund manager.

• Through a fixed-interest, bond-based system.

What is the minimum average Assets Under Management (AUM) an experienced AMC must have to be eligible to launch Specialized Investment Funds (SIFs)?

• ₹1,000 crore

• ₹5,000 crore

• ₹10,000 crore

• ₹25,000 crore

Which of the following best describes the tax structure for Specialized Investment Funds (SIFs)?

• SIFs are taxed at the fund level, like Alternative Investment Funds (AIFs).

• Gains are taxed in the investor's hands, similar to traditional mutual funds.

• ll gains are fully tax-exempt.

• SIFs have a higher tax rate than other investment options.