The SBI Magnum Midcap Fund is an equity-based open-ended fund that primarily invests in the mid-cap sector of the capital market. The fund looks to provide investor long-term capital appreciation and income through investments in a diversified basket of stocks across sectors of the economy. The fund was launched on March 29, 2005, and is ranked 5th in the mid-cap mutual fund category by CRISIL. This fund has a large exposure to equity and is, therefore, prone to volatility.
The SBI Magnum Midcap Fund has been performing moderately and has been trailing its benchmark closely over a 5-year investment horizon. The fund under-performs in investment horizons of up to 3 years and marginally outperforms its category in a 5-year investment horizon. The annualized returns of the fund against its category have been shown in the chart below.
The SBI Magnum Midcap Fund follows a blend of value and growth style of investment, this causes the fund to aim to get maximum returns while mitigating market volatility risks. The fund adopts a bottom-top approach to stock selection and invests in companies across market sectors to maintain a diverse portfolio. The asset allocation of the SBI Magnum Midcap Fund according to its mandate has been provided in the table below.
Min Asset Allocation
Max Asset Allocation
Equity and equity related instruments of midcap*companies (including derivatives)
Other equities and equity related instruments
Units issued by REIT/InVIT^
Medium to high
Debt instruments (including securitized debt)
Money Market Instruments
The present asset allocation of this scheme has been provided in the chart below:
The SBI Magnum Midcap Fund endeavours to maintain a highly diversified portfolio across market sectors. Presently, the fund is heavily investing in mid-cap stocks in the Finance, Healthcare, Engineering and Construction sectors. As this fund is open-ended the Fund Manager has the freedom to dynamically change the composition of the portfolio depending on the prevailing market conditions. The present sectoral allocation of the fund against the NIFTY Midcap 150 TRI has been provided in the chart below.
As the SBI Magnum Midcap Fund focuses on the highly volatile mid-cap sector of the market it is affected by market fluctuations. These fluctuations can lead to a loss in capital. The fund’s liquidity can also be affected by Trading volumes, transfer procedures and settlement periods.
The SBI Magnum Midcap Fund invests nominally in debt and other money market instruments to provide the fund with a level of stability, but these instruments also carry their own set of associated risks. The issuer of a debt instrument can default in the payment of fixed income security, this risk is termed as “credit risk”. Changes in interest rates have a drastic effect on long-term debt and can, in turn, have adverse effects on the Net Asset Value (NAV) of the fund.
Risk Mitigation Measures
The SBI Magnum Midcap Fund endeavours to mitigate risks in both equity and debt investment. It tries to mitigate the volatility of the fund by having a diversified portfolio across sectors, this helps mitigate concentration risk which is usually sector-specific. The fund also strives to maintain an asset-liability balance to ensure payments during redemption of units are done in a timely manner.
The Fund Manager times the maturity of the scheme according to expected interest rate changes to mitigate interest rate risks on long-term debt instruments. The fund also carefully selects high ranking debt instruments which have been ranked by SEBI Registered credit rating agencies to mitigate Credit Risks associated with debt instruments.
Ms. Sohini Andani
Ms. Andani has served as a Fund Manager at SBI Funds Management Private Limited since May 2010, and has been its Head of Research since joining the firm in October 2007.She previously served as a Senior Analyst at ING Investment Management Pvt. Ltd. Ms. Andani is a certified Chartered Accountant and holds a B.Com degree.