SBI Mutual Fund AMC is one of India’s leading asset management companies or fund houses and it manages a range of mutual funds targeted at Indians from various walks of life. The AMC is named after the State Bank of India, India’s largest public sector bank, which also happens to be the major stakeholder in the AMC. The fund house itself operates as a joint venture between SBI and AMUNDI, a France-based globally recognized investment firm.
Due to the local expertise and reach brought to this JV by SBI, investors can now easily invest in an SBI mutual fund of their choice no matter what their geographic location is within India. In the following sections, we will discuss five of the leading equity mutual funds scheme offered by SBI Mutual Fund AMC to Indian investors. In order to keep the selection criteria simple, the following funds have been chosen based on their average returns recorded over a period of 5 years. By choosing such a long a time period, you are potentially better placed to shortlist funds capable of delivering future returns under a variety of market conditions.
In the past year or so small and mid-cap funds have definitely been the outliers having posted substantially high returns during the prevailing bullish market conditions. However, the performance of the SBI Small and Midcap Fund has been nothing short of extraordinary when you consider that over the past 5 years the fund has managed to provide its investors with annualized returns of over 35%. Though the ROI of the fund has definitely not been constant each year, which is, in fact, impossible for market-linked investment products, it has definitely managed to contain losses quite well even during bearish market conditions. The fund has focused on making primarily small-cap equity investments which have accounted for nearly 65% of the total capital allocation with midcap investments making up the balance. The large-cap allocation of this fund has historically been around 5%, which is in line with the scheme’s stated objectives.
A majority of investment experts agree that when it comes to equity investments, a multi-cap fund is definitely one of the best value-for-money fund investments out there. If you are an investor in the SBI Magnum Multicap Fund, you are liable to agree considering that the 5 year annual returns offered by this fund have been over 21%. The objective of the SBI Magnum Multicap Fund specifies that maximum small cap allocation is 10%, the midcap allocation would be around 10% to 40%, while large-cap allocation would range between 50% to 90% of the total capital. All this is definitely in line with the run-of-the-mill strategy adopted by a multi-cap fund. But what has really worked in favour of this scheme has been the strategy of mid-cap focused investing which has let it grow a lot faster than most of its peers. After all the past couple of years have witnessed a tremendous increase in midcap returns whereas the returns on large-cap investments have been considerably muted. All in all for investors looking for robust growth potential and reasonable amount of risk to capital, this SBI mutual fund scheme is definitely a top draw.
Probably the most popular SBI equity mutual fund out there, the SBI Bluechip Fund is not just one of SBI’s largest funds in terms of net assets but also one of the largest funds currently open for investments in India. As of 30th September 2017, the fund had net assets worth Rs. 15,654 crore and annualised 5-year returns in excess of 19%, it is definitely one of the best investment choices in the large-cap category. As the name suggests the SBI Bluechip Fund is a large-cap equity oriented and historically around 80% of the scheme’s capital has been allocated to this segment. The balance approximately 20% capital allotment of the fund has historically been made into midcap funds. This midcap allocation has been one of the key reasons for the fund’s exceptional performance in the last couple of years when the mid-cap segment has shown strong performance. All things considered, the SBI Bluechip Fund continues to be one of the best large-cap schemes an Indian investor can choose to invest in.
The SBI Magnum Taxgain Scheme is the ELSS offering from SBI Mutual Fund AMC and is considered to be among the top rated tax saving mutual funds available in India today. The stated objective of the SBI Magnum Taxgain Scheme is to provide capital appreciation to investors along with tax saving benefits under Section 80 C of the Income Tax Act 1961. In order to achieve its objective, the scheme is free to invest in equities, equity-based schemes, preference shares, fully convertible debentures as well as bonds. Historically, however, this scheme has shown a large-cap tilt with around 75% of its capital being invested in large-cap equities, while a major portion of the remaining capital assets of the fund has been invested in mid-cap equities. As a result, investors of this scheme can look forward to potentially low volatility of their portfolio along with commensurate returns and relatively low levels of risk.
The SBI Magnum Multiplier Fund is probably the best-kept secret in this mutual fund company’s catalog of equity funds. With total assets valued at Rs. 1900 crores as on 30th September 2017, this multi-cap fund is only a fraction of the size of the company’s more popular equity offerings such as the SBI Bluechip Fund. However, the long-term performance of this equity scheme has been nothing short of stellar with 5-year returns of the fund recorded at over 20% annually. The SBI Magnum Multiplier Fund follows a strategy of equity-based investments targeted at providing high levels of capital appreciation to its investors. A closer look at the scheme’s current capital allocation reveals that an estimated 55% of the fund’s investments are in large-cap equities. As for the rest of the capital, around 30% is invested in midcaps while the remainder is invested in small-cap equities. This allocation shows that the firm’s robust growth can be attributed to the strong performance of the mid-cap segment, while the large cap allocation has helped the scheme contain losses during bearish market conditions. That is probably one of the key reasons why this is definitely a good choice for an investor seeking an equity mutual fund for long-term capital appreciation.
Table1. Comparison of the key features of the selected SBI Mutual Fund AMC equity scheme*
|Fund Name||1 Year Returns||3 Year Returns||5 Year Returns||Expense Ratio|
|SBI Small and Midcap Fund||43.64%||31.15%||35.29%||2.35%|
|SBI Magnum Multicap Fund||27.12%||17.49%||21.58%||2.05%|
|SBI Bluechip Fund||20.94%||14.02%||19.23%||1.97%|
|SBI Magnum Taxgain Scheme||25.10%||11.84%||17.91%||2.00%|
|SBI Magnum Multiplier Fund||24.66%||15.46%||20.53%||2.11%|
*The data in the table is correct as per data obtained 30th September 2017 and is subject to change depending on market conditions.