Equity mutual funds by definition are proactively engaged in making equity investments in various sectors and across various market capitalizations. The main concern with equity funds has always been the risk of illiquidity and this makes it necessary for such funds to invest a small portion of their capital in various debt/money market investments in order to provide a certain degree of liquidity to the scheme. Equity funds are ideal for investors seeking long-term capital growth however this potential growth does come at the cost of a potentially higher degree of risk.
The SBI Magnum Comma Fund is an open-ended equity fund from the renowned fund house SBI Mutual Fund AMC. This fund is expected to provide the investor with long-term capital appreciation of their investment by investing in equities of various organizations involved in key commodities businesses operating in key sectors such as oil & gas, metal, materials, and agriculture. These are considered the key sectors because they play a significant part in driving growth of the Indian economy and thus the fund can provide consistent returns as the country progresses and prospers.
Investment Objective and Strategy of SBI Magnum Comma Fund
The SBI Magnum Comma Fund will invest in various companies in key sectors such as oil and gas, materials, metals and agriculture which are essential for the long-term growth of the Indian economy as a whole. All of these business deal in commodities, which are essential to ensure rising income levels and increase in prosperity of India. For the investors, this fund is expected to provide an unmatched growth opportunity of their capital investments in the long term.
To achieve the above objectives, the SBI Magnum Comma Fund would feature an exposure of at least 65% to the stocks of the abovementioned four sectors. Additionally, the fund may also have some exposure to companies that provide raw materials that are used by those sectors. The fund would feature no more than 50% exposure to derivatives such as Index options/futures and stock options/futures. Foreign securities investments, if any, will also feature exposure to these 4 key sectors.
Fund Information and Statistics
Launch Date: The SBI Magnum Comma Fund was first available for investment on the 8th of August 2005.
Fund Type: This mutual fund is an open-ended equity fund which an investor can invest in/redeem/switch from at any time depending upon individual requirements.
Minimum Investment: In case the investor selects the option of lump sum investment, the minimum amount is Rs. 5000 and any higher lump sum amount will have to be in multiples of Re. 1. Additional purchase minimum amount subsequent to an initial purchase requires a minimum investment of Rs. 1000. Additionally, the minimum single monthly SIP investment for a period of 12 months in the scheme is Rs. 500.
Risk Category: Due to the high exposure to specific sectors as well as majority exposure to equities and equity-linked investment options, the SBI Magnum Comma Fund is ranked as a high-risk investment option on the mutual fund risk index.
Entry/ Exit Load: In compliance with the RBI mandate, the fund features nil Entry Load in case a new investor wants to invest in the fund. However, the fund does feature an exit load of 1% in case the investor redeems/switches units before completion of 1 year from the date of allocation.
Fund Manager: This equity mutual fund is managed by Mr. Richard D’Souza who has over 19 years of experience in the financial sector. Prior to joining SBI Mutual Funds AMC, he worked with ASK Investment Managers, Alchemy Shares, Sunidhi Consulting, Antique Shares as well as Ajit Vajani Share Brokers.
Plans and Options Available
Direct Plan: Direct plans feature a low expense ratio as they are available directly from the Mutual Fund AMC, SBI Mutual Fund. As a result of this lower expense ratio, the NAV of units availed through this option is slightly higher and so are the potential returns as compared to the regular plan. This is the key reason why many investors prefer to invest in this option.
Regular Plan: This is the most commonly availed option specifically because it is available through various 3rd party mutual fund distributors across the country including Paisabazaar.com. The corpus available to this plan is also larger than the direct plan and thus it is preferred by investors due to the potentially higher levels of liquidity associated with the option.
Dividend Option: Dividends may be declared from time to time by a mutual fund depending on the availability of excess cash/profits earned. Dividends are calculated on a per unit basis and when these are declared, the NAV of the fund’s unit decrease by a proportionate amount. Available variants of this option include dividend payout and dividend reinvest.
Growth Option: This option is availed by investors who are seeking to generate capital appreciation in the medium to long term and are not looking for payouts in the interim period. A growth option fund reinvests its profits back into itself, which leads to an increased NAV as well as an increased AUM for the fund. This allows the investor to book a profit at a later date when redeeming/switching his/her investment in the scheme.
Leading Investments of the SBI Magnum Comma Fund
The following are the notable equity investments of the SBI Magnum Comma Fund*:
|Oil and Gas||Reliance, IOC, IGL, ONGC, HPCL, GAIL, Petronet LNG, BPCL, Oil India, etc.|
|Cement and Construction||Sagar Cement, UtraTech Cement, Birla Corporation, etc.|
|Chemicals||UPL, Sharda Corporation, Bayer Crop Sciences, Vinati Organics, etc.|
|Metals and Mining||Coal India, Hindalco, Vedanta, Tata Steel, Hindustan Zinc, etc.|
|Others||EPC Industries, Grasim Industries, NTPC, TATA Power, CEAT, J K Tyre, and other similar industries, etc.|
|Miscellaneous||Cash/Call, CBLO, Bank Balance, etc.|
*The above table is for illustrative purposes only and not an exhaustive list of the fund’s complete corpus.
How to Invest in SBI Magnum Comma Fund through Paisabazaar.com
As required by SEBI, a prospective investor is required to sign up for a free investment account with Paisabazaar.com in order to get started. At present, paper documents are no longer mandatory for KYC as Paisabazaar.com offers prospective investors with the option of Aadhaar-based e-KYC. The e-KYC procedure is highly streamlined and can be completed from the comfort of the home/office. Once the account is set up, the user can use the handy search box located towards the top of the account dashboard page in order to search for a specific fund such as the SBI Magnum Comma Fund.
Before proceeding to complete the investment, the investor can view the key details of the fund ranging from historic returns and current NAV to fund rank and risk level associated with the investment. On subsequent pages, the investor will have to provide key data including the amount to be invested, option selected, etc. Making the initial investment in the scheme is also easy as the Paisabazaar.com platform is configured to accept payments through Netbanking of almost every national level bank operating in India. Once the transaction is completed, the units of the fund are credited to the Paisabazaar Mutual Fund account as per the applicable NAV depending on the date and time of the transaction.