Fund review: SBI Magnum Multicap Fund

One of the key challenges facing most investors nowadays is steep valuation of a large number of mid-sized companies. This almost limits the scope for alpha generation across sectors. Therefore, long-term investors should consider multicap schemes. As the valuation gap between largecap and mid-sized companies widens, it makes sense to be with multicap schemes. Going by the nature of multicap schemes, investors get the best of companies of all sizes - large or small.

Among multicap schemes, SBI Magnum Multicap Fund has distinguished itself over a long period of time by recording consistent performance in most cycles of markets. The scheme invests 50-90 per cent in largecap stocks, 10-40 per cent in midcap stocks and up to 10 per cent in smallcap stocks. This diversification has worked for the scheme. In the past three- and five-year periods, the scheme has delivered 19.7 per cent and 21.4 per cent returns, while its benchmark, S&P BSE 500, has given 12.7 per cent and 14.3 per cent returns during the same period.

In the past six months, the scheme's fund manager, Anup Upadhyay, has bought stocks that reflect his focus on value and growth themes. In selecting these stocks, he has zeroed in on large-sized companies by balancing it with a reasonably good exposure to mid- and small-sized companies. A few prominent companies which are part of the scheme's portfolio include ONGC, ICICI Bank, NTPC and Yes Bank. Investors with at least three years of investment horizon may consider investing in the scheme.