SBI Mutual Funds, one of the largest Asset Management Companies in India, offers investors with the SBI Magnum Multicap Fund. This is an open-ended equity fund, which focuses on equity investments across companies of various market capitalizations. The SBI Magnum Fund is deemed to be suitable for investors who are seeking capital appreciation over the long term through equity investments. By focusing on equities of different market capitalisation, the SBI Magnum Multicap Fund attempts to strike a balance between liquidity and growth opportunities that may be available to the fund.
Investment objective of SBI Magnum Multicap Fund
SBI Magnum Multicap Fund operates as an open-ended growth scheme, which is designed to provide the fund’s investors with the opportunity to pursue long-term growth of their investment, while ensuring sufficient liquidity of the scheme. The fund manager and team are expected to actively manage the fund in order to ensure diversity of investments that include both debt and equity instruments. Additionally, in case of equity investments, the SBI Magnum Multicap Fund would include investments irrespective of market capitalisation – small, mid or large.
In order to ensure implementation of these objectives, the fund expects to invest an estimated 70 to 100% of its portfolio in the potentially high return equity investments. The remainder, if any, would be invested in foreign securities, floating/fixed debt investments as well as money market instruments. Among these, the foreign securities are comparatively high risk investments, whereas, debt and money market instruments would feature either medium or low risk. In terms of capitalisation, large cap shares would comprise between 50 to 90%; mid-cap between 10 to 40%; and small cap would comprise 10% or less of the portfolio.
Investment Strategy Overview of SBI Magnum Multicap Fund
As the SBI Magnum Multicap fund is classified as an equity fund, a majority of its portfolio i.e. no less than 30% would be invested in various equity stocks. Additionally, derivatives available for investment in the scheme would include a maximum of 50% of the portfolio of the SBI Magnum Multicap fund. This exposure to derivatives adds to the equity exposure of the scheme and therefore the fund would make these investments only for the purpose of portfolio balancing and hedging.
Risk Profile of SBI Magnum Multicap Fund
The SBI Magnum Multicap fund is prone to a number of risks just like any other equity mutual fund investment. Some of the notable risks of the plan are as follows –
- The scheme feature chances of loss of principal amount invested as the investment is market-linked with high equity exposure.
- The liquidity available in the scheme may be restricted as a result of settlement periods and trading volumes.
- In extraordinary circumstances such as in case of an exceptional number of redemption requests or portfolio restructuring, the redemption period may be significant.
- There might also be cases when redemptions would be temporarily suspended or limited as a result of exceptional market stresses.
SBI Magnum Multicap Fund Information and Statistics
- Launch Date: SBI Magnum Multicap Fund was launched in September 2005 and since then it has emerged as one of the leading equity funds to invest in.
- Fund Type: This multicap fund is an open-ended equity scheme hence any individual investor can invest in the fund or redeem existing investments in the scheme at a time of their choice.
- Minimum Investment: The minimum amount for initial investment in the scheme as a lumpsum is Rs.1000 with higher amounts as multiples of Re. 1. An additional investment in the scheme subsequent to the initial investment can be made for Rs. 1000 and higher amounts in multiples of Re. 1. Repurchase is restricted to the lowest among account balance, 100 units of the fund or total investments worth Rs. 1000.
- Risk Category: Due to the high exposure of the fund to potentially high risk equity investments, the risk level of the SBI Magnum Multicap Fund is considered to be moderately high. However the scheme doe have some exposure to relatively low risk debt and debt-related investments, which provide a higher degree of liquidity and lower the overall risk of the fund.
- Entry/ Exit Load: As per SEBI directive, SBI Mutual Funds does not levy an entry load on any investments made into the scheme. In terms of Exit Load, if an investor exits the scheme within 6 months of investing, an exit load of 1% will be charged. For investments in the fund that are switched or redeemed between 6 months and 12 months, the exit load would be 0.5%. No exit load is applicable in case the switch or redemption of SBI Magnum Multicap Fund units is made after completion of 1 year.
- Fund Manager: The SBI Magnum Multicap Fund has been managed by Mr. Anup Upadhyay since February 2017. He has been working with SBI Mutual Funds since 2007. Mr. Upadhyay is an IIT Kharagpur and IIM Lucknow alumni while also being the holder of a Charter from the CFA Institute, USA. In the past 8 years, while working with SBI Mutual Funds, Mr. Upadhyay has emerged as one of the leading fund managers of the AMC.
As with other equity mutual fund investments, investments made in the SBI Magnum Multicap Fund are subject to short term capital gains taxation rules. As per the present day taxation rules, if units of the SBI Magnum Multicap Fund are redeemed within 12 months of the units being allocated, a 15% rate of capital gains tax will be deducted from the amount redeemed. If held from over a year, the proceeds from redemption of the mutual fund units will be tax free.
Plans and Options Available with SBI Magnum Multicap Fund
- Direct Plan: In this case, the individual investor can opt to buy the mutual fund units directly from SBI Mutual Funds. In this case, there are no brokerage or portfolio management fees to contend with and the NAV tends to be higher in case of the direct plans due to a lower expense ratio. Direct plans can be opted for with both growth and dividend options.
- Regular Plan: The regular plan of SBI Magnum Multicap Fund can be invested in either through SBI Mutual Funds or through various other 3rd party routes such as brokers. Most features of the regular and direct plans of SBI Magnum Multicap Fund are the same, however, the NAV of the regular plan tends to be slightly lower as a result of the higher expense ratio as compared to the direct plan. Under the regular plan, both the growth and dividend options are available for subscription.
- Dividend Option: Just like shares, mutual funds also declare dividends in case they make profits. In case dividends are declared, they may be either paid out to the investor’s registered bank account (dividend payout option) or the dividend may be converted into units of equivalent value through the dividend re-invest option. However, it must be noted that dividends or returns from investments made into the SBI Magnum Multicap Fund are not guaranteed.
- Growth Option: In case of the growth option, any profits generated by the SBI Magnum Multicap Fund are invested back into the scheme, which leads to an increase in the NAV of the funds resulting from an increase in the fund’s AUM. The benefits of growth options are reaped in the form of capital appreciation that is available when the units of the SBI Magnum Multicap Fund are redeemed for a profit.
Eligibility for Investment in SBI Magnum Multicap Fund
Any Indian national who has completed 18 years of age and can complete the SEBI-mandated KYC criteria is eligible to invest in the SBI Magnum Multicap fund. In recent times, the KYC requirements have moved to the Aadhaar-based e-KYC system, which ensures ease of completing the process at a swift pace and makes it easy for individuals to start investing in mutual funds of various types. Additionally, in case of the SBI Magnum Multicap Fund, an investor may choose to either open an investment account with SBI Mutual Funds and start investments in direct plans or open a third-party investment account that provides access to regular plans of multiple mutual funds available in India irrespective of fund house or type.
Top Holdings of the SBI Magnum Multicap Fund
The following are the top sectoral holdings of the SBI Magnum Multicap Fund*:
|Investment Sector||Top Holdings|
|Banking/Financial Services||HDFC Bank Limited, IndusInd Bank, State Bank of India, Kotak Mahindra Bank, Mahindra and Mahindra Financial Services, RBL Bank, etc.|
|Consumer Goods||ITC Limited, CBLO, Nestlé India, Hindustan Petroleum Corporation, Jubilant Foodworks, etc.|
|Energy/Oil and Gas||IndianOil Corporation Ltd., Petronet LNG, etc.|
|Internet Technology||HCL Technologies, Infosys, Motherson Sumi Systems, etc.|
|Automobiles||Tata Motors, Maruti Suzuki India, etc.|
|Construction||Equitas Holdings, Hindalco Industries, Strides Shasun, Sagar Cements, etc.|
|Pharmaceuticals||Laurus Labs, Aurobindo Pharma, Sun Pharma, Divi’s Laboratories ltd., etc.|
|Metals/Mining||Coal India Ltd., Hindustan Zinc, etc.|
|Miscellaneous||Titan Company, Voltas, Birla Corporation, Greenply Industries, etc.|
*The list is for illustrative purposes and investments mentioned above are liable to change as per market conditions and fund objectives.
How to Invest in SBI Magnum Multicap Fund through Paisabazaar.com
Paisabazaar.com offers a cutting-edge easy to use mutual fund platform to prospective investors interested in various funds of SBI Mutual Funds including the SBI Magnum Multicap Fund. To get started, an individual has to open a free mutual fund investment account on the Paisabazaar.com platform. Signing up is easy and works similar to opening a new email account and KYC can also be completed from the convenience of the prospective investor’s home or office. The Paisabazaar.com platform integrates the e-KYC through Aadhaar platform in order to ensure that the KYC requirements are completed in minutes and the investor can choose the funds of his/her choice to invest in.
Once sign up and eKYC are completed, the investor can log into their free investment account and start investing without having to pay any brokerage or portfolio management fees. In fact, if an investor decides to transfer his/her portfolio from an existing 3rd party broker or brokerage house to Paisabazaar.com, there will be no charges for that transfer either. Once logged on to the dashboard page, the investor can use the conveniently placed search box at the top of the page to search for funds from a specific fund house or a specific fund by name.
The prospective investor can easily type the name “SBI Magnum Multicap Fund” and get directed to the fund’s main page which shows key statistics such as current AUM, most recent NAV, risk level, fund performance since inception/the past 5 years and more. The buying process can be initiated by clicking on the “Buy Now” button and in successive pages, the investor can input the investment amount, plan choice – growth, dividend reinvest or dividend payout. The investor can complete his/her payment through the Internet Banking system of their registered bank.
About Equity Mutual Funds
Equity mutual funds are named as such as they mainly focus on investing in equities or equity-related investment options. However, contrary to popular belief, a much smaller portion of the portfolio of equity funds are usually invested into debt investments and money market instruments to provide liquidity and lower the overall risk inherent to the equity investment portfolio. In case of a multicap fund, these equity investments are made in companies of various market capitalisation i.e. large, medium and small. This would insure that the scheme would feature a combination of growth and liquidity, which is essential for the successful capital appreciation in the long term.