SBI Magnum Midcap

AUM Rs 184.70 crore ...................................................... as on December 31, 2013
NAV Rs 30.85 ................................................................... as on Jan 31, 2014

Sohini Andani,
Fund Manager,
SBI Mutual Fund

If you have started with Rs 1000 SIP in SBI Magnum Midcap Fund in the month of February 2009, then your investment of Rs 60000 would now stand at Rs 90204. This might not look exciting as it has given you a return of mere 50 per cent in the span of five years. Nonetheless, if we calculate the scheme yield after considering the time value of money, the yield comes out to be 15.32 per cent compare to 2.91 per cent by its benchmark. This shows the inherent strength that this fund has. If we calculate the fund performance point to point the fund has performed in both long and short-term basis. In the last five years the fund has yielded a return of 25.72 per cent. In the three year and one year period the fund had generated returns to the tune of 11.58 per cent and 13.04 per cent respectively. In the last three months the performance of the fund stands strong at 14.06 per cent.

The fund has been able to outperform its benchmark as well as the Sensex. The benchmark index of the fund, CNX Midcap has generated a negative return of 5.12 per cent for calendar year 2013, while this fund has given a return of 13.04 per cent. It has also outperformed the Sensex by 456 basis points in the last one year.

The fund works with the objective of investing around 65 per cent in the midcap space. The reason that can be attributed for the outperformance of the fund is higher exposure to the healthcare sector. Almost 20 per cent of the total portfolio comprises of the stocks from the healthcare sector. Just to give a heads up all the pharma companies that it holds do not have any risks as far as alerts from USFDA are concerned and all the stocks like Aurobindo Pharma, Divi’s Laboratories, Alembic Pharmaceuticals have performed well generating huge returns in the last one year.

The top five sectors comprises of 62 per cent of the total assets. The other sectors apart from health care that forms the part of the portfolio are Automobile (12.09 per cent), Services (10.80 per cent), Financial (10.18 per cent) and Textiles (9.03 per cent). The better performance can also be attributed to the strong performance witnessed in sectors like IT and textiles. Currently the fund has invested 96.28 per cent in equities and the rest in debt. In equities Midcap and Small cap comprises 100 per cent of the portfolio of 38 stocks.

Better performance of the fund has not come at a cost of taking risk. This statement can be supplemented by looking at the sharp ratio which stands at 0.24. The alpha of the fund stands at 6.19, which is one of the highest among its peers. Alpha represents the excess return that fund has generated at a given level of risk.

The fund is managed by Sohini Andani since July 2010. The asset under management (AUM) of the fund as of December 31, 2014 stands at Rs 184.70 crore.

The fund can be an ideal candidate to form a part of the mutual fund portfolio of a risk taking investors. However, an SIP route for investor seems to be the best way to invest in this fund scheme.