FUND PICK: SBI Magnum Multiplier Fund

Well-diversified, consistent performance

Launched on February 28, 1993, SBI Magnum Multiplier Fund is classified under the diversified category of the CRISIL Mutual Fund Ranking. It has been ranked in the top 30 percentile over the past four consecutive quarters ended December 2015.

The aim of the scheme is to provide its investors long-term capital appreciation/dividend. The fund has been managed by Jayesh Shroff since June 2007 and had quarter average assets under management (QAAUM) of Rs 1,419 crore at the end of the March quarter.

Superior performance
SBI Magnum Multiplier Fund has outperformed the category (funds ranked under the diversified category in December 2015 CRISIL Mutual Fund Rankings) and the benchmark, S&P BSE 200 across time frames, except over seven years when it underperformed the category marginally (see chart).

The fund outperformed the category and the benchmark in various market phases since July 2013. In the post-European crisis (July 2014-February 2015), the fund returned 45.83 per cent vis-a-vis the category's 42.55 per cent and the benchmark's 31.12 per cent. An investment of Rs 1,000 in the fund on May 25, 2005 (inception of the fund's growth plan) would have grown to Rs 6,341 (compounded annualised returns of 18.52 per cent) on April 5, 2016. A similar investment in the category and the benchmark would have grown to around Rs 5,116 (16.20 per cent) and Rs 3,667 (12.70 per cent), respectively.

Similarly, a systematic investment plan (SIP) of Rs 1,000 per month in the fund has delivered higher returns than the benchmark across various time frames (see table).

Portfolio analysis
Over the past three years, the fund held 95.69 per cent of its portfolio in equities and remaining in fixed deposits and cash and cash equivalents. The fund follows a diversified market-cap strategy, with an inclination towards large-cap stocks (top 100 in terms of National Stock Exchange market capitalisation). Over the past three years, the fund's exposure to large-cap stocks has been 62.02 per cent, on average.

The fund had exposure to 90 stocks over the past three years. It held 45 stocks, on average, in any given month, of which 18 stocks were held consistently. Among the consistently held stocks, HDFC Bank had the highest allocation (6.53 per cent) followed by Infosys (3.93 per cent) and Lupin (3.84 per cent). As on February 2016, the fund had 42 stocks in its portfolio. HDFC Bank (seven per cent), Infosys (5.86 per cent) and Reliance Industries (5.81 per cent) were the top three.

Over three years, the fund had exposure to 23 sectors, with the top five sectors constituting 64.22 per cent of the portfolio. The top sectors were banking (16.28 per cent exposure on average), information technology, pharmaceuticals, automobile, and consumer non-durables. Exposure to banking stocks augured well for the fund in 2014, when Nifty Bank returned 64.57 per cent compared with Nifty Midcap 100's 37.82 per cent. But, the sector underperformed in 2013 and 2015.