Specialised investment funds (SIFs) should usually be treated as small satellite holdings rather than the core of an investor’s portfolio, Morningstar CEO Kunal Kapoor said, cautioning that the flexibility offered by long-short strategies, derivatives and active asset allocation also brings greater complexity, costs and a wider range of outcomes.
With most SIFs only months old, early performance data offers limited insight into their long-term potential, Kapoor said. While the new category could expand India’s managed-investment market and intensify competition, investors should prioritise simplicity, diversification and cost discipline.
