An old timer in the category, this fund has managed a consistent improvement in performance since 2012. This has enabled a strong climb in the rankings, from two to four stars recently.
SBI Magnum Balanced Fund maintains a steady state 75-25 equity-debt mix. The equity part is multi-cap, with a higher exposure to mid-cap stocks than that of the peers. The portfolio over time has featured a 68 to 70 per cent equity portion, with the rest in debt. Usually half of the equity portfolio is large caps and the rest is mid and small-caps. But the proportion has climbed to two-thirds in favour of large-caps lately.
In the debt portion, the fund invests both in G-secs and corporate bonds for higher accrual income. A portion of the debt portfolio is deployed in high-yielding credits (minimum rating of A-) with an aim to provide stability and increase the overall portfolio yield. The balance is managed more dynamically having exposure to government bonds and liquid AAA rated credits, keeping in mind the view on interest rates. The average maturity was at about seven years as of January 2018.
SBI Magnum Balanced Fund has kept ahead of both the benchmark and the peers over three and five years perod, beating the index by 1 to 4 percentage points and just about matching peer performance. After a slip-up in relative returns in 2016, the fund was back with a bang in 2017. The fund's long track record suggests that it has been a big outperformer in bull markets but trailed the indices in bear phases, with the NAV taking a sharp knock in 2008 and 2011. But the change in strategy since 2012 could help it in the future.
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