Financial Daily from THE HINDU group of publications
Sunday, May 22, 2005
Financial Daily from THE HINDU group of publications Sunday, May 22, 2005 |
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Investment World
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Mutual Funds Markets - Mutual Funds SBI Magnum Global: Invest in small lots S. Vaidya Nathan
INVESTORS can consider exposures in SBI Magnum Global Fund as it could deliver attractive returns even if the broad market remains flat. The prospects for the preferred sectors in the portfolio — electrical engineering, textiles, IT and chemicals — appear bright. This could enable the fund to outperform its benchmark BSE-100 as well as peer funds. The fund had been languishing for several years. Only over the past three years has it got its act together and performed impressively. This is reflected in the annual returns of about 60 per cent during this period. The fund has benefited from the several re-ratings in mid-cap stocks. This recovery is line with trends in other funds from the SBI Mutual stable Over the past year, the NAV has doubled, even though mid-cap stocks as a class have not posted gains of such a magnitude. This points to impressive stock selection and timing of buy/sell decisions. Investors could, however, phase out their exposures using a systematic investment plan, which would enable them capitalise on any weakness in the broad market. Suitability: The fund is appropriate for investors with an appetite for higher risk; the returns have more than adequately compensated for the associated risks. We would not, however, recommend it as a core holding. It could account for 10-15 per cent of your investment in equity funds. Portfolio overview: The fund focuses mostly on mid-cap stocks. It also has exposures to a few small-cap stocks such as Alok Industries, Gujarat NRE Coke, Amtek Auto and Man Industries. The fund places a high degree of faith in stocks such as Crompton Greaves, Arvind Mills, Shree Cement, Thermax, KEC International and Sintex Industries, which have remained in its top ten holdings for several months now. The fund still has a small asset base of about Rs 150 crore. Most of the stocks in the portfolio have posted gains even as the market remained wobbly this year. This should provide a high degree of flexibility in management. Fund facts: The SBI Magnum Global Fund was launched in September 1994. The minimum investment is Rs 2,000. The entry load is 2.25 per cent. There is no exit load. The fund manager is Mr Sandip Sabharwal.
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