The Hindu Business Line : SBI Magnum Global: Invest

AN investment may be considered in SBI Magnum Global, as its aggressive fund management style could offer attractive returns over a two- to three-year period.

Investors could use a systematic investment plan to take exposures; they could phase out their investment over a twelve-month period, as it will provide different entry points; they will also be able to capitalise on any weakness in the broad market and especially in the mid-cap space, which is the focus of this fund.

The fund has left behind years of lacklustre performance by riding on the several bouts of re-rating in mid-cap stocks. Its sector and stock selection have ensured that it has stayed well clear of the BSE 100, its benchmark, as well as most peer funds during the past three years.

The magnitude of difference in the returns does inspire confidence. The fund has turned in annual returns of about 75 per cent over the past three years; its NAV has almost doubled over the past twelve months.

SBI Magnum Global's resurgence is in line with the performance of equity-linked funds from SBI Mutual. In this backdrop, stability in the fund management team is of critical importance.

Suitability: The fund has a higher risk profile than those of most diversified equity funds. Its returns have, however, more than adequately compensated for the risk element. Investors who have exposures to funds such as Prima, Bluechip, Magnum Contra and HDFC Equity can consider allocating 10-20 per cent of their assets to this fund.

They could opt for the dividend option and also re-investment of the dividend. As mid-cap stocks have risen many times in recent years, investors must have a longer time-frame and more moderate expectations of return than the fund has managed over the past three years.

Portfolio overview: The fund has a tilt towards sectors that could benefit from growth in infrastructure services. Engineering, construction and construction materials account for about 30 per cent of assets. It has also sizeable exposures in IT and pharmaceuticals.

The fund has stayed with stocks such Crompton Greaves, Havell's India, Thermax, Jaiprakash Associates, Sintex and Shree Cement, which have been instrumental in propelling performance.

Offbeat choices such as KPIT Cummins, Infotech Enterprises and Dishman Pharma, to name a few, are also part of the portfolio. The asset base, at about Rs 335 crore, provides for a high degree of flexibility in fund management; this is important for a fund that focuses on mid-cap stocks. The expansion of stocks in this space also augurs well for the fund.

: SBI Magnum Global Fund was launched in September 1994. The minimum investment amount is Rs 2,000. The entry load is 2.25 per cent. There is no exit load. The fund manager is Mr Sandip Sabharwal.

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