SBI Magnum Balanced Fund – An old-timer in the balanced category, this fund alternated between bad and good patches until 2011. However, it has come back with a consistent performance since 2012. This has enabled a strong climb in the rankings, from two to five stars recently.
SBI Magnum Balanced Fund maintains a steady-state 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 68-70 per cent equity portion, with the rest in debt. Large caps make up about 50-55 per cent the equity portion. The fund invests in a mix of both defensives and cyclicals.
In the debt portion, the fund invests both in G-secs and corporate bonds for higher accrual income. The corporate exposure does feature some AA minus bonds, though the major chunk is in AAA and gilts. The fund rebalances on a daily basis and caps cash calls at 7.5 per cent.
SBI Magnum Balanced Fund has kept ahead of both the benchmark and the peers over three and five years, beating the index by 5-6 percentage points and peers by 1-3 percentage points. Trailing one-year returns though have lagged behind the benchmark and category returns marginally.
SBI Magnum Balanced Fund long track record suggests that this fund 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 could help it weather bear phases better now.
This is an aggressive balanced fund meant for risk takers.
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