As conversations around Specialized Investment Funds (SIFs) gather momentum, MFDs\/advisors are focusing on simplifying the category for clients. The Cafemutual SIF Summit saw industry leaders talk about investor concerns, client conversations and the role SIFs could play in portfolios.<\/p>\n
The panel featured Gajendra Kothari, MD and CEO, Etica Wealth, Komal Narang, Chief Client Officer, Jio BlackRock AMC and Vishranth Suresh, Co-founder & CEO, AssetPlus, with the session moderated by Prem Khatri, Founder & CEO, Cafemutual.<\/p>\n
Have you started discussing SIFs with clients yet?<\/strong><\/p>\n Responding to Prem Khatri\u2019s question on whether Etica Wealth has started discussing SIFs with clients, Gajendra Kothari said the firm is still taking a measured approach towards the category.<\/p>\n \u201cWe strongly believe in skin in the game. First, we will invest our own money, understand the strategies deeply and then gradually take it to clients,\u201d he said.<\/p>\n Kothari added that SIFs should not be positioned as products that can generate quick returns overnight and advisors need to first understand how these strategies perform across market conditions.<\/p>\n Are clients themselves asking about SIFs?<\/strong><\/p>\n On the other hand, Vishranth Suresh said younger investors are already showing strong interest in SIFs, with many clients themselves initiating conversations around the category.<\/p>\n \u201cA large part of my clients is in the 28-32 age group and they tend to be early adopters. Many clients themselves have brought up SIFs because they are aware of the product,\u201d he said.<\/p>\n According to Suresh, younger investors are attracted by the idea of accessing advanced strategies and hedge fund-like structures through regulated investment products.<\/p>\n Where do SIFs fit in a client portfolio?<\/strong><\/p>\n Speaking about portfolio positioning, Komal Narang said the starting point should always be identifying gaps in a client\u2019s existing allocation.<\/p>\n \u201cThe first question should be what purpose the product serves in the portfolio. Over the last few years, portfolios have become heavily skewed towards long-only equity and SIFs can help provide uncorrelated strategies and diversification,\u201d she said.<\/p>\n Narang added that SIFs can potentially provide access to areas such as REITs, InvITs, merger arbitrage and IPO-based strategies in a more tax-efficient structure.<\/p>\n \u201cWe see SIFs as complementary strategies rather than core portfolio replacements,\u201d she said.<\/p>\n