SBI Magnum Balanced Fund aims to provide long-term capital appreciation as well as the liquidity of an open-ended scheme through investments made into a mix of debt and equity options. The scheme would balance the risk factors by investing a majority of its assets in potentially high-growth equity and equity-related investments, while the rest would be invested in a comparatively safe debt portfolio. The fund would make an investment in across equity and equity related instruments, debt instruments and money market instruments to balance capital appreciation with risk.
As the name suggests balanced funds such as the SBI Magnum Balanced Fund, also commonly known as hybrid funds, mainly invest in both equity and debt instruments. It provides diversification to an investor’s portfolio by combining the growth capability of equity with the relative stability of debt investments. Balanced funds are suitable for those investors who are seeking safe investments, fixed income and modest capital appreciation over the medium to long term.
SBI Magnum Balanced Fund intends to provide long-term appreciation as well as the liquidity of an open-ended scheme by making investments into both debt and equity. The scheme would invest into a diversified portfolio of equities of high growth companies. SBI Magnum Balanced Fund is ideal for those investors who wish to invest in a mix of debt and equity through investments in stocks of high-growth companies to get capital appreciation and liquidity. The fund also aims to provide a suitable investment opportunity to investors who are seeking benefits from the growth potential of equity without getting completely exposed to the potentially high-risk equity markets.
The securities which are collected under the SBI Magnum Balanced scheme will be invested according to the scheme objective. The investment strategy would be to primarily maximize the profits on investments through profit booking, portfolio mixing and through investing in primary market issues. This mutual fund will also invest in foreign equities and might also use hedging techniques which subject to the discretion of RBI & SEBI guidelines and approval.
|Investment Option||% of net allocated assets||Risk profile|
|Equity and equity related instruments||At least 50%||Medium|
|Debt instruments such as debentures, bonds, certificates, leases, mortgages etc.||Up to 40%||Low|
|Securitized Debt||Not more than 10%||Low|
|Money Market instruments*||Balance||Very Low|
* Money Market instruments would include commercial bills, commercial paper, treasury bills, bills certificates of deposit, bills rediscounting, government securities, repos which have an unexpired maturity of less than 1 year. The above-mentioned instruments may change at the discretion of fund manager.
About Fund Manager
Mr. Rama Iyer Srinivasan is a post-graduate in Commerce and Financial Management from Bombay University. He has investment experience of around 22 years in the equities market. Before he joined SBI Mutual Funds, he was heading Public Markets in Future Capital Holdings, an erstwhile asset management and financial services unit of the Future Group. Prior to that he also worked with several renowned organisations including Motilal Oswal Securities, Imperial Investment Advisors, Principal PNB AMC, Indosuez W. I. Carr Securities, Sunidhi Consultancy and Capital Market Publishers. At present, he is the Fund Manager of the SBI Magnum Global Fund, SBI Emerging Businesses Fund, SBI Magnum Equity Fund, SBI Magnum Balanced Fund (jointly with Dinesh Ahuja), SBI Contra Fund as well as the SBI Small and Midcap Fund.
Top Portfolio Holdings
The following is a short list of the top portfolio holdings of the fund*.
|PROCTER & GAMBLE HYGIENE AND HEALTH CARE LTD.||7.68% CGL 2023 1.16|
|HDFC BANK LTD.||7.59% CGL 2026 4.72|
|INFOSYS LTD.||8.27% CGL 2020 3.55|
|INFOSYS LTD.||REPCO HOME FINANCE LTD. 1.36|
|ECLERX SERVICES LTD.||8.12% CGL 2020|
|ALSTOM T&D INDIA LTD.||ICICI BANK LTD. 1.43|
|ICICI BANK LTD.||JANALAKSHMI FINANCIAL SERVICES PVT. LTD. 1.46|
|ECLERX SERVICES LTD.||SBI PREMIER LIQUID FUND 4.19|
|HDFC BANK LTD.||ADANI PROPERTIES PRIVATE LTD. 1.85|
|BAJAJ FINANCE LTD.||NATIONAL HIGHWAYS AUTHORITY OF INDIA 2.42|
|STATE BANK OF INDIA|
|PROCTER & GAMBLE HYGIENE AND HEALTH CARE LTD.|
|KOTAK MAHINDRA BANK LTD.|
*The above list is indicative and subject to periodic change.
Key sectors SBI Magnum Balanced Fund is invested in is as follows
- Financial services
- Industrial manufacturing
- Consumer goods
- Cement & Cement products
- Healthcare services
The following are the key risk factors that investors should consider before they decide to invest in SBI Magnum Balanced Fund:
- The value of the investment may go up or down because of the fluctuations in the value/ interest rates/price of the securities in which the scheme invests.
- Past performance of the Mutual Fund/Sponsor/ AMC does not give any guarantee or assurance of the future performance of the scheme.
- State Bank of India, the Trustees, AMC, Mutual Fund, sponsor or directors are not responsible or cannot be held liable for any loss or tax consequences that might arise from investment into the fund.
- The Net Asset Value of the Units of the schemes may be affected by a change in key factors such as market conditions and forces which affect the interest rates, capital markets and trading volumes in the equities market.
- As SBI Magnum Balanced Fund invests in both equity and equity related instruments which carry both company-specific and market risks, the investor cannot be given any kind of guarantee or assurance of returns from the investments.
Investment in Mutual Fund Units includes investment risks such as settlement risk, trading volumes risk, default risk, liquidity risk as well as possible loss of principal.
Type of the Scheme:
SBI Magnum Balanced Fund is an open-ended balanced scheme, which is open for subscription and redemption/switch as per the investor’s requirement.
Minimum Application Amount:
The minimum first-time investment application amount of SBI Magnum Balanced Fund is Rs.5000 and thereafter it can be increased in the multiples of Re.1.
Additional Purchase Amount:
The additional purchase amount of SBI Magnum Balanced Fund is Rs.1000 and thereafter it can be done in the multiples of Re.1
The limits on repurchase are either unit worth Rs.1000 or total account balance or 100 units of the fund - whichever is lower.
Minimum SIP amount:
- For weekly investments- a minimum amount of Rs.1000 and multiples of Re. 1 thereafter for minimum 6 weeks.
- For monthly investments - a minimum amount of Rs.1000 and thereafter it can be done in multiples of Re. 1 for minimum 6 months or a minimum Rs.500 and in multiples of Re. 1 thereafter for a min. 1 year.
- For quarterly investments – a minimum amount of Rs.1500 and thereafter higher amounts can be done in multiples of Re. 1 for minimum one year.
Entry Load: Entry load is charged when an investor purchases the units of the scheme. In the case of SBI Magnum Balanced Fund, entry load is NIL as per SEBI mandate.
Exit Load: Exit load is the amount which is charged at the time when an investor exits or leaves the scheme. In the case of SBI Magnum Balanced Fund, exit load is charged on the following conditions:
- If an investor switches out or redeems no more than 10% of the units which were initially purchased or switched-in from another scheme within a 1 year period from the date of allotment then no Exit Load is levied.
- If an investor redeems more than 10% of the units of the scheme within 1 Year from the date of allotment then 1% of applicable net asset value (NAV) will be levied as an Exit Load.
In case an investor redeems or switches out the units purchased after 1 year from the date of allotment then no exit load will be levied.
Any investor who wishes to invest in SBI Magnum Balanced Fund can invest through two plans which are the direct plan and regular plan.
The Direct Plan is suitable for those investors who wish to purchase or subscribe for the units in a scheme directly with the Mutual Fund Company. It is not available for those investors who route their investments through an advisor, broker or third party distributor. No additional charges or portfolio management fees is charged when an investment is made through the direct plan of SBI Magnum Balanced Fund. Therefore, it has lower expense ratio and higher NAV due to lower management costs.
Regular Plan is suitable for those investors who wish to purchase or subscribe units of SBI Magnum Balanced Fund in a scheme through a distributor/ advisor/ broker. Choosing the regular plan option for investment might lead to levy of management fees or brokerage charges on the investor. Therefore, the expense ratio is higher for investments made through regular plans. However, regular plan investment can be made with ease through the Paisabazaar.com investment account as we do not charge you any brokerage or portfolio management fees. Both the plans offer Growth Option and Dividend Options. Dividend Option offers multiple variations - Reinvestment, Pay-out and Transfer facilities.
By choosing the growth option, the profits of an investment scheme are invested back into the fund itself. This results in an increasing of the Net Asset Value (NAV) of the scheme. Hence, if the scheme gains profit then NAV rises and if the scheme faces a loss then the NAV decreases. Investors can sell or redeem the units of their investments to make a profit.
By choosing the dividend option, an investor does not have to manually re-invest his/her profits back into the scheme. In this case, the profits or dividends declared are distributed to investors from time to time. However, the amount or the frequency of the dividend payouts is never guaranteed. Dividends are paid out of the NAV of the SBI Magnum Balanced Fund units and these are distributed at the discretion of the fund manager. It can be declared only in the cases when scheme makes profits.
How to apply
If you wish to invest in SBI Magnum Balanced Fund, you have two options - the offline route and the online route. In online investment option, the investor can visit their Paisabazaar.com investment account where he/she can choose the SBI Magnum Balanced Fund which is available on the list of balanced funds offered by State Bank of India Mutual Funds. In order to make an investment through the offline route, the interested investor can consult a broker or visit one of SBI Mutual Fund’s registered offices and provide them the key details/documents needed to complete the investment.