SBI Magnum Balanced Fund

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SBI Magnum Balanced Fund is now called SBI Magnum Equity Hybrid Fund

Earlier known as Magnum open-end, the scheme seeks capital appreciation from a balanced portfolio of equity and debt securities.

An old timer in the category, this fund has managed a consistent improvement in performance since 2012. This has enabled a strong climb in the rankings, from two to four stars recently.

SBI Magnum Balanced Fund maintains a steady state 75-25 equity-debt mix. The equity part is multi-cap, with a higher exposure to mid-cap stocks than that of the peers. The portfolio over time has featured a 68 to 70 per cent equity portion, with the rest in debt. Usually half of the equity portfolio is large caps and the rest is mid and small-caps. But the proportion has climbed to two-thirds in favour of large-caps lately.

In the debt portion, the fund invests both in G-secs and corporate bonds for higher accrual income. A portion of the debt portfolio is deployed in high-yielding credits (minimum rating of A-) with an aim to provide stability and increase the overall portfolio yield. The balance is managed more dynamically having exposure to government bonds and liquid AAA rated credits, keeping in mind the view on interest rates. The average maturity was at about seven years as of January 2018.

SBI Magnum Balanced Fund has kept ahead of both the benchmark and the peers over three and five years perod, beating the index by 1 to 4 percentage points and just about matching peer performance. After a slip-up in relative returns in 2016, the fund was back with a bang in 2017. The fund's long track record suggests that it has been a big outperformer in bull markets but trailed the indices in bear phases, with the NAV taking a sharp knock in 2008 and 2011. But the change in strategy since 2012 could help it in the future.

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

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EXCHANGE TRADED FUND VS INDEX FUND

Index fund

It is a type of mutual fund whose portfolio of stocks tracks an exchange index like the Sensex. So it is a passively managed fund with stocks in the same proportion as the index it's tracking and has a low operating cost and low portfolio turnover. However, it may not reflect the same returns as the index due to what is known as `tracking error'. This is because these funds also have a certain percentage of cash and other assets for liquidity.

Exchange traded fund

These are also mutual funds that track an index, commodity or bonds and have stocks in the same weightage as those in the index it tracks. However, the main difference is that these can be traded on the stock exchange during the day like other stocks and, hence, one needs a demat account to operate these. ETFs typically have higher daily liquidity and are more transparent.

Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 10 Tax Saver Mutual Funds for 2018

Best 10 ELSS Mutual Funds to invest in India for 2018

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. ICICI Prudential Long Term Equity Fund

5. Birla Sun Life Tax Relief 96

6. Franklin India TaxShield 

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Birla Sun Life Tax Plan

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Historical Volatility

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Volatility most frequently refers to the standard deviation of the change in value of a financial instrument with a specific time horizon. It is often used to quantify the risk of the instrument over that time period. Volatility is typically expressed in annualized terms, and it may either be an absolute number ($5) or a fraction of the initial value (5%).

For a financial instrument, the volatility increases by the square-root of time as time increases. Conceptually, this is because there is an increasing probability that the instrument's price will be farther away from the initial price as time increases.

Historical volatility is the standard deviation of a financial instrument based on historical returns. This phrase is used particularly when it is wished to distinguish between the actual volatility of an instrument in the past, and the current volatility implied by the market.

Volatility of returns of a fund is measured by standard deviation which is a measure of total risk of a fund. Volatility indicates the tendency of the funds NAV (Net Asset Value) to rise and fall in a short period. It measures the extent to which the NAV fluctuates as compared to the average returns during a period.

A fund that has a consistent four year return of 3 %, for example, would have a mean , or average, of 3 %. The standard deviation for this fund would then be zero because the fund's return in any given year does not differ from its four year mean of 3 %. On the other hand, a fund that in each of the last four years returned -5%, 17%, 2% and 30% will have a mean return of 11%.The fund will also exhibit a high standard deviation because each year the return of the fund differs from mean return. This fund is therefore more risky because it fluctuates widely between negative and positive returns within a short period.

A higher standard Deviation means that the returns of the fund have been more volatile than a fund having low standard deviation. In other words high standard deviation means high risk.                              

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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