The Hindu Business Line : Magnum Global: Invest

The fund's lacklustre performance of four years ago is behind it, and it boasts an impressive annualised return of 50 per cent over the past few years.

Notable stock selection in the mid-cap space has paid off well despite phases of underperformance witnessed in mid-cap indices over the past year.

Given its relatively high-risk profile, Magnum Global should only be an addition to a portfolio that has diversified funds such as HDFC Equity, Magnum Contra and Franklin Bluechip. An allocation of about 10 per cent of your assets (set aside for equity) to this fund is likely to perk returns.

Being a mid-cap tilted fund, Magnum Global has already benefited from the re-rating witnessed in this space over the past couple of years.

A longer time frame of holding and tempered return expectations, therefore appear to be the preferred investment strategy.

Performance: Magnum Global's one year-return of 116 per cent places it among the top of the ranking charts, next only to Sundaram Select Midcap, which follows a more aggressive style of portfolio churning. The former, however, possesses a longer track record that places it at the top of the three-year performance category.

The preferred sectors in the portfolio — engineering, construction and consumer goods — hold promise over the medium term. The fund has also consistently outperformed its Benchmark BSE-100.

Magnum Global has so far been successful identifying stocks at the early phase of their rally.

About 20 of the 48 stocks as of April have stayed on with the portfolio and returned well over the past year.

Jaiprakash Associates, Infotech Enterprises and Nagarjuna Construction have not only delivered returns but continue to have bright future prospects on the back of strong fundamentals.

Over the six months ended April 2006, Magnum Global's asset base has more than doubled, to Rs 667 crore.

The huge expansion may have prompted the fund to increase the number of stocks in its portfolio to about 50.

Suitability: Magnum Global has a higher risk profile than most diversified funds due to its concentrated exposure to sectors.

The active management strategy has so far ensured that returns compensate for the risks involved.

Investors can consider exposure in small lots using a 12-month systematic investment plan (SIP).

This route will enable them to take stock of performance periodically before committing more funds.

The current volatility in the market will enable averaging of rupee cost.

Stability in the fund management team may be a key for funds such as Magnum Global. The fund did see a change in November 2005 when Mr Sanjay Sinha replaced Mr Sandip Sabharwal as the fund manager. The investment approach and performance, however, remain encouraging.

Portfolio overview: 65 per cent of assets are invested in stocks with market cap of less than 200 crore.

The top ten stocks account for close to 40 per cent of the fund's assets. KEI Industries, Kajaria Ceramics and Cosmo Films are some of the small-cap stocks in the portfolio.

Fund facts: Magnum Global was launched in September 2004. Minimum investment under the SIP is Rs 500 per month.

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