SBI Magnum Equity Fund

SBI Magnum Equity Fund is one of the better performing funds in its category. This fund is managed by R Srinivasan who has over 18 years experience. He has been managing the fund from May 2009. This fund has performed well through the years. Its return has been above average in its category. You can continue your investments in this fund. No more than 30% of your total investment portfolio must be allocated to this fund.

Where does SBI Magnum Equity Fund invest your money?

SBI Magnum Equity Fund is a large cap fund which means most of your money will be invested in giant and large companies.  And just to give kicker returns the fund has some exposure in mid cap companies as well. Large cap companies tend to be stable compared to mid cap and small cap companies. This fund has about 94% exposure to stocks of large cap companies.

Suitable for what?
  • Child's Education
  • Child's Marriage
  • Planning for Retirement
  • Buying a house 
Not suitable for what?
  • Creation of wealth
  • Short term Needs
How much to invest?

Minimum one time investment is Rs 1000 and minimum SIP is Rs 500 per month. Do not make SBI Magnum Equity Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. SBI Magnum Equity Fund can be part of your satellite portfolio. Do not do the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

Our recommendation for fresh investment
Our recommendation for existing investment.
How has SBI Magnum Equity fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Jan 1991, your value of investments would be around Rs 4.8 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.33 lakhs. The performance has been better or similar to other mutual funds in this category. The fund has been giving at around 6% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in SBI Magnum Equity through SIP for the past 5 years today you would have around Rs 8.20 lakhs.

How will SBI Magnum Equity fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to de well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 9% then you can expect top performing mutual funds to give you returns in excess of 15%. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What charges apply?

A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of SBI Magnum Equity Fund is 2.15%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to exit?

Withdraw when your goals are closer to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. SBI Magnum Equity Fund does not qualify for sec 80C ELSS benefits.

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