Jio BlackRock is preparing to expand beyond domestic mutual funds, with plans to offer Indian investors access to global BlackRock ETFs through its newly approved GIFT City platform. CEO Sid Swaminathan said the venture aims to provide international exposure across global equities and other asset classes, with products likely to be offered through ETFs, fund-of-funds, or other investment structures.Edited excerpts from an exclusive chat with Swaminathan:How exciting is the opportunity for you as well as for investors in SIFs?We see the category itself as a really interesting one. It fulfills a certain need for a certain segment of investors. Let me explain a bit more.If you've got a more affluent type of investor who already has the more vanilla exposures to equity and debt markets, and is looking for more outcome-oriented solutions — some of them could be, for example, a higher level of total return but with much lower risk than equities. These are the kinds of outcomes you can construct using a SIF.The fact that derivatives are allowed, and you can mix and match different asset classes, makes it super interesting for us as manufacturers to create differentiated outcomes.When you put all of that inside the mutual fund wrapper — which I think is the big value proposition here — it becomes even more attractive. The wrapper is well-known, it's transparent, there are governance processes in place, there's liquidity, and there's tax efficiency as well. So for that affluent population looking for differentiated exposures, this is a really strong value proposition on a tax-adjusted basis.Once we made the analysis of where within the different categories we think we can provide the most value, we landed on the hybrid category. The Hybrid Long-Short strategy is where we believe the value is strongest. That's the first one we're launching. Once we do that, we'll expand and launch other strategies as well.We've already got a pretty strong platform to do that. We have the investments team in place. Our active equity process — Systematic Active Equity — is data- and AI-driven, powered by our technology platform Aladdin, and it's already been rolled out in the mutual fund space. We have a Flexicap Fund, a Large Cap Fund, a Sector Rotation Fund. The equity sleeve within the SIF is also going to employ those strategies, with derivatives enabled on top for risk management — which is really the key goal for the use of derivatives. Then you mix and match that with fixed income and REITs, and you can construct some really interesting return streams from a total return perspective.How would your SIFs be different?The framework is the same — the same overall people, platform, and process. But the fact that this asset class allows you to do more means we're going to be leveraging our insight and expertise on the options side. We have that in-house; we have the capabilities and the technology to do that.Rather than applying it in a static manner — which I think some others are already doing — we want to be a lot more dynamic. If you look at our active equity strategy, we use a lot of data points, we're pretty nimble, we use faster-moving data, and we can rebalance our portfolios every week if we want to. We want to bring that same dynamic approach to our options strategy as well. The dynamic asset allocation within the SIF, driven by our systematic process, is going to be a key differentiator.Do you think SIFs can become as big as mutual funds in 5-10 years?I think the potential is there. "As big as or bigger" is a big number, but if you look at the global setup, a good benchmark is the liquid alts industry in the US. Liquid alts became a thing in the early 2000s, and in a very similar way to SIFs here, they were being offered inside the mutual fund wrapper. People said, "Retail doesn't really need liquid alts — it's too complex, why do you need derivatives inside mutual funds?" Today, liquid alts in the US are a $300 billion industry.Mutual funds are in the trillions, so it's still not the biggest, but it's still a huge component. I don't necessarily see SIFs outshadowing all of mutual funds, because mutual funds cater to a much, much bigger universe — people who just need to start investing. The mutual fund wrapper will always be the primary protocol for them. SIFs will always be for the more informed, advanced investor — someone who has already made the initial mutual fund journey, accumulated a certain level of wealth and mutual fund assets, and is ready for the next step. So it's going to be a very important part of the ecosystem, even if it's not the single largest component.Do you think SIFs will need distributors? Will they work in a direct format?We believe — and that's why we're launching with regular plans and distribution — that the newness and complexity of SIFs, the greater number of variables with derivatives, and the higher minimum ticket size of ₹10 lakhs will all require more guidance. Some investors will still be comfortable going direct — we've seen that in our own digital model, which has gone really well. In the first nine to ten months, we've had over 5,000 crores of retail AUM and 11.5 lakh investors, and within that we've seen investors make large ticket investments completely on their own.But more and more people will need guidance, especially in an early category like this. Even within hybrid SIFs, there's a lot of variability — some strategies may be more conservative, some may use more credit risk. The dimensions are a lot higher than in a regular mutual fund, so the value of a distributor who can provide guidance and advice is going to be super important.After the Hybrid Long-Short Fund, what other plans do you have within SIFs?We'll be going through the categories. We haven't set exact dates yet. The hybrid long-short fund has been approved and we're going through the final consultation phase — within the next few months it will be up and running.And SIFs are just one part of our expansion. We received our approval for our GIFT City entity, so we're setting up there to offer international exposures for Indian investors through the outbound channel, and Indian exposures to international investors through the inbound channel.We also plan to launch ETFs in the next few months, starting with gold. So there's a lot happening in the next two to three months, and within each of these verticals we have an individual expansion plan.Let's talk about your shift to distribution. What's the logic behind it, and how has the direct experience been?We're very happy with the direct experience. Eleven-and-a-half lakh customers, over 5,000 crores of AUM in ten months — very happy with that progress.But expansion into distribution was always part of the plan. Phase one was focused on mutual funds and the digital/direct channel, because that's where the DNA from a Jio perspective already existed. We wanted to make sure we didn't dilute our offering too much when we came to market.Now that we have fourteen mutual funds, and more complex products like SIFs and GIFT City international offerings coming, now is the right time to add — not substitute, but add — the physical distribution component. And that's why we believe now is the right time to partner with the distribution community.Was "distribution" always a "when" and not an "if"?It was always a "when." Some people may have interpreted our early focus as "direct only, forever" — but it was always a question of when. I've said that myself in interviews: as we expand, our objective is to be a full-service investment solutions provider for more and more people in India. Many people are choosing to access that digitally, and that will keep growing. But there will always be segments of the population that need that final physical interaction — whether it's after crossing a certain AUM threshold or before they even invest at all. So it was always a "when," not an "if."Will you bring international BlackRock ETFs to India?That's coming through GIFT City. We're agnostic to the wrapper — it can be through ETFs or through a mutual fund. The objective is to provide access. For some kinds of exposures a mutual fund might make more sense; for others, an ETF. So both will be available over time.We're taking a phased approach, though. First, getting the core international exposures right — broad global equities, emerging market equities — is important. Think S&P 500-type exposure or global diversification. That itself is a missing piece. Then, once we have the core in place, we'll expand into more specific exposures like commodities and sectors that don't exist in India.Will international BlackRock ETFs be available in India by next year?There will be the ability to access them — in what shape or form, the structure is TBD (to be decided). Whether it's an ETF, a wrapped fund, or a fund of funds. Our goal is to offer access in whatever is the most efficient structure. That could be through GIFT City, or through a fund-of-funds route, though the fund-of-funds option is subject to the overall mutual fund limits.