Why SBI Magnum Multicap Fund - Regular Plan - Growth Option Is the Best Diversified Equity Fund for You? Find Out

Why SBI Magnum Multicap Fund - Regular Plan - Growth Option Is the Best Diversified Equity Fund for You? Find Out

Feb 26, 2018

Equity funds diversified make investments in companies across market capitalisations. And how much money gets investment in which company is something decided on by the fund manager. The allocation of funds in the market caps varies from scheme to scheme. While some schemes keep the allocation static across companies, others change it as per market conditions.

Although there are many benefits of investing in equity funds diversified, here you find some of the most important ones. Check out -

1. You get the benefit of diversification

One of the most important benefit is that your funds remain diversified across stocks belonging to different companies and sectors. If you are going to invest in a multi-cap fund, then your money will remain parked across companies having different market capitalisations. By investing in such funds, you protect yourself from risks that arise from making sector specific investments.

2. The funds are professionally managed

You invest in equity funds diversified and not directly in stocks because you want your money to grow. Being someone not familiar with the tricks of the trade, you can’t time the market or make good investment choices. And that is why you look up to mutual funds to make your money grow. Equity funds diversified are professionally managed by fund managers who understand all the nitty-gritty involved in the world of investment. Fund managers, with their skills and years of experience, manages your fund portfolio in the best possible manner, which is rarely possible when you make investments on your own in direct equities.

3. The entry level fee is not high

Most big companies sell their stocks at high prices. And that is why you can’t invest in them directly if you are constrained in the financial aspect. When you invest in equity funds diversified, you include a lot of big and renowned companies in your portfolio by simply spending very low amounts of money.

Interestingly, the market is full of so many products in this category that it’s obvious for you to feel overwhelmingly confused regarded which options to choose. And that is why we present to you a name that has been performing consistently well for the past five years- SBI Magnum Multicap Fund – Regular Plan -Growth Option. Want to know more about this scheme? Read on -

SBI Magnum Multicap Fund – Regular Plan -Growth Option is an open-ended growth fund launched on 29-09-2005. The money in this scheme remains invested in equities and equity linked instruments of companies spread across the spectrum of market capitalisation. About 50-90 percent of the corpus remains parked in large-cap stocks, about 10-40 percent in mid-cap stocks, and up to 10 percent in small cap stocks. If you want to invest in this fund, you can start investing with an amount as low as INR 1000.

Let’s briefly look at how SBI Magnum Multicap Fund – Regular Plan -Growth Option performed over the past five years.

Source: Swaraj Wealth Research

In the first year, it offered a return of 30.3% against 29.41% offered by other comparable funds available in the market, and 29.68% of S&P BSE 500 benchmark.

In the third year, the return given by the scheme was 14.63% as opposed to 10.88% offered by other comparable funds in the market, and a benchmark of 9.24%.

In the fifth year, the scheme gave 20.51%, while the return percentage recorded by other comparable funds in the same category was 16.58%. The benchmark that year stood at 13.72%.

So, it’s evident from the table above that the scheme has outdone other diversified equity funds in the market as well as the index fund by huge margins. So, it’s definitely a great scheme to park your money in.

Now, let’s have a look at the yearly performance of the scheme. And we have taken the time span of 2012-2016 into consideration for the purpose of evaluation. In almost all the years, the SBI scheme has outperformed S&P BSE 500 benchmark and other comparable equity funds diversified in the market, with the best performance being displayed against the 2014 mark on the bar graph below.

Source: Swaraj Wealth Research

If you look at the rolling returns offered by the scheme in the last 5 years, you will see that the figure touched by SBI is 20.57%, while it’s only 16.64% for other comparable funds.

Source: Swaraj Wealth Research

From the discussion above, it may be inferred that there is no better way to invest your money than in SBI Magnum Multicap Fund – Regular Plan - Growth Option, especially if you want to benefit from the equity market.

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