Ask ET Mutual Funds: Should I stop investing in Magnum Global Fund?

I have been investing in SBI Magnum Global Fund (Rs 1,000 per month) since the last 2.5 years. The fund is not performing up to the mark. Nobody is even talking about it. Should I stop investing in it? Should I switch to some other SBI fund?
- Amit Singh

Tushar Bahl, Certified Financial Planner (CFP), responds:
SBI Magnum Global Fund is a midcap fund which is facing a tough time since the last two years. It is offering returns below the category average because of its overly diversified approach to different sectors. The fund fails to fully reap the benefits of the shining sector/stocks in its portfolio and has to carry the baggage of the under-performing holdings.

Although, a 2.5-year-horizon is too short to judge an equity fund’s performance and assuming that you have not linked this investment to any particular time-bound financial goal, it’ll be advisable to stop the SIPs. Avoid redeeming the entire fund value immediately to save your earnings from1 per cent exit load (on units acquired within last 365 days) and a short-term capital gain tax of 15 per cent, which will further eat into your returns.


Try researching other fund house’s offerings too. They are equally secure. Amongst the mid-cap category, Mirae Asset Emerging Bluechip Fund is a good pick.

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