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Useful articles for your finance management by our team of experts

top sbi mutual funds in 2012 remove formatting

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Introduction to SBI Mutual Fund

SBI mutual fund was setup on June 29th, 1987 and incorporated on Feb 7th, 1992. It is a result of joint venture between State bank of India and Societe Generale Asset Management of France. Over the years it has carved a niche for itself through prudent investment decisions and consistent wealth creation for its customers. They offer Mutual Fund products in Equity Funds, Index Funds, Balanced Funds, Debt Funds, etc. The assets under management are Rs. 50,958.8 crores as of Sep, 30, 2012.

InvestmentYogi analyses the best performing SBI mutual funds in the Balanced Fund, Equity Fund, Equity Linked Savings Scheme (ELSS) and Hybrid fund categories.

Best performing “Balanced Fund”

· SBI Magnum Balanced fund: The objective of the scheme is to provide its investors growth through capital appreciation from a balanced portfolio of equity and debt securities. This scheme was launched on Oct, 9th 1995. The top sector allocations are BFSI, automobile and FMCG stocks constitute ~45% of portfolio. This fund has given 16.5% returns from its inception date. The fund managers are Mr. R Srinivasan and Mr. Dinesh Ahuja.

Scheme

Fund Size (in Rs. Crore)

Asset Allocation

Total returns annualized in (%)

Volatility measures

3 months

1 Year

3 Years

Std Dev (%)

Sharpe Ratio

Beta

SBI Magnum Balanced Fund

363.86

Equity = 74.3%, Debt = 25.7%

9.5

29.6

6.1

13.6

0.13

0.9

Source: Value Research Online;

Fund size as on Sep 30th, 2012

Returns as of Dec 14th, 2012

*Returns up to 1 year are absolute and over 1 year are annualized; *Ratios have been calculated taking 1 Year date range

The fund has given healthy returns in last one year led by rally in large cap and mid cap stocks. This fund has ~11% investments into HDFC and ICICI banks which are giving consistent returns to investors over the years. The fund also holds ~2.5% investment in Wockhardt which has given strong returns in last one year contributing to performance of this fund. This fund seems eye-catching investment option in balanced fund category.

Best performing “Equity Funds” in large cap and mid cap categories

· SBI Magnum Equity: The objective of the scheme is to provide capital appreciation through investments in diversified portfolio of equities of high growth companies (mainly large cap). This scheme was launched in Nov, 1990. The benchmark index is S&P CNX Nifty. The top sector allocations are BFSI, energy and information technology constitutes ~65% of portfolio. This fund has given 15.6% returns from its inception date. The fund manager is Mr. R. Srinivasan.

· SBI Magnum Emerging Businesses: The primary objective of the scheme is to invest in emerging business themes (mid cap and small cap stocks), primarily based on the export or outsourcing opportunities and global opportunities of such themes. It also focuses on emerging domestic investment themes. The scheme was launched Sep, 2004. The benchmark index is BSE 500. The top sector allocations are BFSI, FMCG, Energy and automobile constitute ~50% of portfolio. This fund has given ~24.2% returns from its inception date. The fund manager is Mr. R. Srinivasan.

Scheme

Fund Size (in Rs. Crore)

Asset Allocation

Total returns annualized in (%)

Volatility measures

3 months

1 Year

3 Years

Std Dev (%)

Sharpe Ratio

Beta

SBI Magnum Equity

806.7

Equity=98%

Debt =2%

7.7

26.2

8.1

16.6

0.20

0.83

SBI Magnum Emerging Businesses

733.8

Equity=88.3%

Debt =8.8%

Cash=2.9%

15.1

44.5

23.5

18.6

0.96

0.75

Source: Value Research Online;

Fund size as on Sep 30th, 2012

Returns as of Dec 14th, 2012

*Returns up to 1 year are absolute and over 1 year are annualized; *Ratios have been calculated taking 1 Year date range

In SBI’s top performing equity schemes we analyze two diverse investment strategies being followed by same fund manager and giving consistent returns from last 3 years. The investment strategy followed by fund manager in SBI Magnum equity is top down approach by investing mainly in large cap stocks which are safe bets and have strong upside story intent with attractive valuations. Top five picks of this fund are HDFC bank, ITC, HDFC bank, Infosys and ICICI bank.

On the other hand, fund manager follows bottom up approach to pick stocks for investments in the SBI Mangum Emerging Businesses Fund. According to fund manager, following this strategy is a “high-risk, high-return strategy in terms of its concentration and deviation from the benchmark.” However, this fund has outperformed its peers in five years from its existence and gave ~5% annualised returns in last five years. Top performing mid-cap and small-cap stocks in this fund are Page Industries, MGFL, Jubilant Food, Hawkins, Blue Dart, Motherson Sumi, Texmaco, Gillete India and Agro Tech Foods.

Best performing “Equity Linked Savings Scheme”

· SBI Magnum Taxgain: The objective of the scheme is to invest in a portfolio of equities and offering tax benefits to investors. This scheme was launched in March, 1993. The benchmark index is BSE 100. The top sector allocations are BFSI, information technology, energy and FMCG constitute ~55% of portfolio. This fund has given ~17.5% returns from its inception date. This is an open ended scheme. The fund manager is Mr. Jayesh Shroff.

Scheme

Fund Size (in Rs. Crore)

Asset Allocation

Total returns annualized in (%)

Volatility measures

3 months

1 Year

3 Years

Std Dev (%)

Sharpe Ratio

Beta

SBI MAGNUM TAXGAIN SCHEME

4,648.27

Equity=96.8%

Debt =3.2%

7.2

29.9

5.5

16.5

0.11

0.82

Source: Value Research Online;

Fund size as on Sep 30th, 2012

Returns as of Dec 14th, 2012

*Returns up to 1 year are absolute and over 1 year are annualized; *Ratios have been calculated taking 1 Year date range

Best performing “Hybrid: debt oriented conservative fund”

· SBI Magnum Children’s Benefit plan: The objective of the scheme is to appreciate capital by investing in debt funds, money market instruments and equity. This scheme was launched in Jan, 2002. The benchmark index is Crisil MIP Blended. The major investment is into GOI securities, debentures, bonds and NCDs which constitute ~70% of portfolio. This fund has given ~9.5% returns from its inception date. The fund manager is Mr. Rajeev Radhakrishnan.

Scheme

Fund Size (in Rs. Crore)

Asset Allocation

Total returns annualized in (%)

Volatility measures

3 months

1 Year

3 Years

Std Dev (%)

Sharpe Ratio

Beta

SBI MAGNUM Children’s Benefit Plan

24.23

Equity=25.6%

Debt =72.1%

Cash=2.3%

5.9

16.9

9.5

5.7

0.68

0.78

Source: Value Research Online;

Fund size as on Sep 30th, 2012

Returns as of Dec 14th, 2012

*Returns up to 1 year are absolute and over 1 year are annualized; *Ratios have been calculated taking 1 Year date range

The investment in this fund can be made in the name of your child with an objective to generate a reasonable corpus as the child grows up. In equity portion, the fund invests across market capitalization and aims to optimize returns through a well diversified portfolio. The major portion of fund goes into debt funds which is a safe investment option to secure future of children.

There are various schemes under SBI Mutual Funds to invest other than schemes discussed above. Consult a financial planner to analyze your needs and goals. Then take a vital decision of investments into specific mutual fund schemes considering your risk taking ability.

Author

Hiral Thanawala is a PGDM (Finance) graduate and Certified Financial Planner. The views explained by him are personal. He can be reached at hiralthanawala@gmail.com

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