Time for Di­ver­si­fied In­vest­ment

SBI Mag­num Bal­anced Fund


Post the March mon­e­tary pol­icy re­view, in­ter­est rate cy­cle has re­versed and the di­rec­tional risk in in­ter­est rates is be­hind us. Bonds are ex­pected to pro­vide some sta­bil­ity to port­fo­lio. And even though eq­ui­ties are ex­pected to be volatile in the near term, in the next three years, eq­ui­ties may pro­vide rea­son­ably good re­turns. At such a point, bal­anced funds are a good in­vest­ment op­tion. Among bal­anced funds, in­vestors may con­sider in­vest­ing in SBI Mag­num Bal­anced Fund, which has 75:25 eq­uity-debt ra­tio.

On the eq­uity side, the scheme in­vests close to 50% in large-sized com­pa­nies, while the re­main­ing in the mid-and-small size com­pa­nies. This multi-cap ex­po­sure helps the scheme de­liver su­pe­rior re­turns as it cap­tures growth sto­ries across var­i­ous sizes of com­pa­nies. On the debt side, the scheme in­vests largely in gov­ern­ment se­cu­ri­ties. This has helped the scheme beat its bench­mark Crisil Bal­anced Fund Ag­gres­sive. In the past three and five year pe­ri­ods, the scheme has given 20% and 18% re­turns, re­spec­tively, while its bench­mark in­dex has given 12% and 10%, re­spec­tively, in the same pe­riod.

In the past six months, the scheme’s fund man­agers R Srini­vasan and Di­nesh Ahuja have in­vested in di­ver­si­fied themes where a key bind­ing fac­tor is value in­vest­ment. These com­pa­nies are Aurobindo Pharma, Bharti Air­tel, Gruh Fi­nance, Reliance In­dus­tries and United Spir­its. This gives a proper di­ver­si­fi­ca­tion in terms of themes and mar­ket cap­i­tal­i­sa­tion. Aurobindo Pharma Com­plete Ex­its Tata Power Com­pany In­crease in Al­lo­ca­tion

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