|Time Period||1 year||3 years||5 years|
(Data as on 14th October 2019, Source: Value Research)
SBI Monthly Income Plan is a hybrid scheme of SBI Asset Management Company (SBI Mutual Fund). It was renamed as SBI Debt Hybrid Fund after the SEBI fund classification rules of October 2017 went into effect. Monthly Income Plans (now called Conservative Hybrid Funds) invest predominantly in debt. According to SEBI rules they are required to invest 75-90% of their assets in debt and 10-25% in equity.
In 2018, as interest rates rose and stock markets struggled, these mutual funds were hit by a double whammy. Interest rate hikes negatively affected debt, hitting the returns of the debt component of these funds. Stocks market corrections hurt the equity component of such funds. In this difficult market, the fund has done worse than the category average, in contrast to its out performance against the category over the past 1, 3 and 5 years.
Its manager, Dinesh Ahuja has been at the helm since 2013. Their performance has been a mixed bag with out-performance in 2011, 2015 and 2016 paired with under-performance compared to the category average in 2012, 2013, 2014 and 2017. However, in 2019, the fund has clearly out-performed the benchmark over 1, 3 and 5 years.
SBI Debt Hybrid Fund has accrued 8.62% returns since the year of its inception. According to the portfolio aggregates, the fund has invested in 26 securities. The fund has 34.62% of its assets in AAA rated securities, 33.62% in AA rated and the balance 20.63% in SOV. In its equity component, the fund goes for large cap growth stocks. The fund currently has moderate risk and below average risk grade.
SBI Debt Hybrid fund has successfully outperformed its benchmark over the last 5 years. This shows the consistent improvement in the performance. The fund’s relatively higher exposure to lower rated paper may give investors a boost in term of yield. A lot depends on whether the fund managers are able to pull up their socks and demonstrate out-performance once again. Investors should exercise great caution while investing in this fund.