SBI Magnum Children Benefit Plan - Regular Plan - Holding Held for <= 1 Year: Best Fund for Child’s Future

SBI Magnum Children Benefit Plan - Regular Plan - Holding Held for <= 1 Year: Best Fund for Child’s Future

Mar 29, 2018

The best investment funds for children focus on providing longer term benefits apart from higher rates of returns. A hybrid or a balanced fund would be able to combine the features of higher returns on equity as well as stability in the longer run. Based on the purpose and the intended benefits from the investment, hybrid equity oriented fund or a Hybrid debt oriented fund can be chosen. A hybrid equity fund provides higher returns on investment but is sensitive to the market movements and hence carries a higher element of risk. Whereas a hybrid debt fund provides more stability to the investment even though the rate of returns are lesser than equity finds. Since, securing the longer term future of a child while meeting any ad hoc expenses is the main criteria for any children, a hybrid debt oriented fund would be the best option.

Investing in SBI Magnum Children Benefit Plan - Regular Plan -Holding Held for <= 1 Year

SBI Magnum Children Benefit Plan - Regular Plan - Holding Held for <= 1 Year is a Hybrid Debt Oriented fund for children. This child benefit plan was launched on 25-01-2002. This scheme is an open ended scheme and the minimum initial investment is Rs. 5000. Subsequent investments can be made into the fund with a minimum amount of Rs. 1000.

The investment portfolio of this child benefit plan is varied and spread across multiple sectors. Finance, construction, media, industrial products, pharmaceuticals, consumer durables and non durables are few of the sectors where the investments are made. Nearly 49 % of the portfolio is spread across various other sectors beyond the ones mentioned, thereby distributing the element of risk. Finance sector is the single major sector into which this fund’s investments are made with a share of 19.85 %. The portfolio holdings of the fund include CBLO, Reliance Home Finance, Manappuram Finance Ltd, Hindalco Industries limited etc.

Fund Performance in the category

SBI Magnum Children Benefit Plan – Regular Plan – Holdings Held for <= I year has been active since more than 15 years and has been a performing consistently in the category of Hybrid Debt Oriented funds (Child plan).

Source: Swaraj Wealth Research

The average 15 year return of the fund is 11.06 percent which is higher than the category’s average of 9.19. The 5-year and 10-year performance of this fund has also been consistently better than the category’s performance. Especially the 3 year returns show a remarkable high performance of 14.37 % returns in comparison to the 3-year category average of 9.02 %. The fund continues with its strong performance even during the last on year with returns of 17.93 %, whereas the average return of the other funds in the category is 10.0 %.

Source: Swaraj Wealth Research

Year on year the performance of SBI Magnum Children Benefit plan has been better than the performance of Hybrid Debt Oriented Funds (Child Plan) category. The fund has nearly outperformed the category even during 2014 where the category has seen a high rate of returns. Even during subsequent years, where the returns in general of the category have been less, this fund has been performing better than the category. The performance in the year 2017 has been especially strong with the investment in the fund attracting a higher rate of returns with 24.28 %.

The investment in high performing finance stocks and the wide spread of investment in different sectors have enabled the fund to perform consistently over a sustained period of time. Investment into this Hybrid debt oriented fund is ideal for the longer term goals related to investments for a child’s future.

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