SBI Magnum Multicap Fund Review: the quiet performer!

This is a performance review of SBI Magnum Multicap Fund vs Nifty 500 TRI and category peers like HDFC Equity and Kotak Multicap

Published: March 1, 2020 at 11:27 am

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SBI Magnum Multicap Fund is an open-ended Equity Scheme investing across large cap, mid cap, small cap stocks with some exposure to debt and money market instruments. In this review, we compare its performance with Nifty 500 TRI and category peers.

Launched in Sep 2005, the fund currently has an AUM of Rs. 8758.28 Cr as on 31 Jan 2020. Just three years ago, in Dec 2016, the AUM was only Rs 1,429.64 Crores! The SEBI categorization rules did not affect the fund significantly other the removal of individual market cap limits.

Prior to May 2018, the fund invested 50% of its equity portfolio in largecap (max 90%), min 10% in midcap ( max 40%) and a max 10% smallcap exposure. These self-imposed restrictions were lifted as SEBI did not require it!

This is the asset allocation history of SBI Magnum Multicap Fund since July 2017 The fund has maintained a large cap heavy portfolio. Aside from its meagre small cap exposure, it has so far been a large and mid cap fund.

Asset Allocation History of SBI Magnum Multicap Fund
Asset Allocation History of SBI Magnum Multicap Fund

Let us now evaluate the fund’s performance with Nifty 500. We consider 2333 five-year returns between Oct 2005 and Feb 2020. Notice that the fund (regular plan) has fared reasonably well after Dec 2014.

SBI Magnum Multicap Fund Rolling Returns five years
SBI Magnum Multicap Fund Rolling Returns five years. Data for Nifty 500 is also shown for comparison.

We only have 1082 ten-year return data points for the above-mentioned period. While most funds have struggled to beat the benchmark in the recent past with a much better history, the opposite seems to be true for SBI Magnum Multicap!  It has managed to keep its nose above the benchmark since mid-2017 and has outperformed in the last year or so. The direct plan should have done a touch better.

SBI Magnum Multicap Fund Rolling Returns ten years
SBI Magnum Multicap Fund Rolling Returns ten years

SBI Multicap vs HDFC Equity vs Kotak Multicap

Next, we look at how the SBI fund has fared against HDFC Equity and Kotak Multicap. Over five years, Kotak Multicap (highest AUM among active funds) and SBI Multicap have performed almost identically! The outperformance of HDFC Equity wrt Nifty 500 has gone down dramatically over 5 years (see below)

SBI Multicap vs Kotak Multicap vs HDFC Equity rolling returns over five years
SBI Multicap vs Kotak Multicap vs HDFC Equity rolling returns over five years

Over ten years too, the SBI fund has fared better since mid-2017. Kotak does not have much of a history. HDFC Equity has managed to outperform the NIfty 500 over the entire investment window considered.SBI Multicap vs Kotak Multicap vs HDFC Equity rolling returns over ten years

SBI Multicap vs Kotak Multicap vs HDFC Equity rolling returns over ten yearsUnlike most other funds we have reviewed recently, where the outperformance has dropped in recent years, SBI Magnum Multicap has managed to overcome its unremarkable past and do well in the last few years.  Existing investors can continue to hold. New investors who prefer a multicap mutual fund can also consider it.

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About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com
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