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S. Vaidya Nathan

INVESTORS in SBI Magnum Multiplier Plus can retain their holdings as the fund's performance appears to be encouraging, especially in the highly volatile market of the past year.

It has notched up a fairly good track record that could become more impressive if the pace of improvement is maintained for another year or two. Its portfolio is well placed to capitalise on growth trends in the economy.

Over the past three years, the annual returns have been about 40 per cent. The fund has handled the bullish phases of 2003 and 2004 and the volatile market of 2005 adeptly. It is among the short list of equity funds that recorded positive returns in the first quarter of 2005 and beat the broad-based benchmark S&P CNX-500 comfortably. This points to a successful strategy in stock selection and timing of investment decisions in a choppy market.

Long-term investors (those who had invested in the IPO or in the mid-1990s) in this fund would still be sitting on annual returns of just 10 per cent. For such investors, too, a `hold' strategy would be appropriate.

In line with the considerable improvement in performance of several equity funds from the SBI Mutual stable, SBI Magnum Multiplier, too, has moved away from a long indifferent performance.

Suitability: The risks associated with the fund are typical of what one would expect of a diversified fund. The returns are starting to provide adequate compensation for the risks. The fund still has some distance to go before it can make it into our shortlist of preferred equity funds for fresh investment.

Portfolio overview: The fund is invested in a mix of large-cap and mid-cap stocks. Several of its mid-cap holdings are close to graduating to a large-cap status. Having entered these stocks early in the bullish phase, the fund has benefited from the sharp re - rating in valuation levels.

Exposures such as Arvind Mills, Thermax, United Phosphorus, Nagarjuna Construction and Crompton Greaves have helped perk up performance.

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