SBI Magnum Equity ESG Fund- Direct-Growth: Key Insights, Returns, Risks, and More

Environmental concerns are only rising and it is not restricted to any specific nation or region, but the concern is global. Thus, in recent years, you have seen different companies consciously up their games in ESG matters. This is here to stay as the more businesses adhere to environmental, social, and governance guidelines, the more sustainable future we can see. 

Since sustainability and ESG are two of the following things in recent times, investing in companies, that are following these ESG guidelines, can not only be great from the ROI perspective but also the sustainable and investing perspective. In the ESG space, SBI MAGNUM EQUITY ESG FUND DIRECT GROWTH is one of the top funds that you can consider. 

This article will revolve around the details of SBI Magnum Equity ESG Fund, the process or investment strategy, returns, risks, key metrics, and a lot more. 

Fund Management and Objectives

SBI Magnum Equity ESG Fund- Direct-Growth is an equity fund, which invests in the ESG theme. The fund invests in a diversified portfolio of companies’ stocks, which adhere to Environmental, Social, and Governance (ESG) regulations and criteria thoroughly. The goal of SBI Magnum Equity ESG Fund Direct is to generate capital in the long term via multiple investment opportunities and offer a sustainable investment option. 

The fund is managed by Rohit Shimpi since 1 January 2022. He was associated with JP Morgan’s Offshore Research Centre, CNBC TV18, and HDFC Standard Life Insurance before joining SBI Mutual Fund. He is one of the top fund managers in the SBI mutual fund house managing six funds at present. 

Coming to his educational background, he is a Chartered Financial Analyst (CFA), along with a PGDBM in Finance and a B.com graduate. 

Want to invest in the SBI Magnum Equity ESG Fund? Open your account today with the best Mutual fund App. 

How does the SBI Magnum Equity ESG Fund Work?

The SBI Magnum Equity ESG Fund explores the opportunities in the equity market sticking to the companies following ESG criteria. So, the fund managers have full freedom here to pick any stock however that should be of a company that adheres to ESG norms. The fund manager can allocate funds as per his analysis and can reallocate whenever he feels right and beneficial for the investors. 

Since there is no restriction on market capitalization or any other factor, the fund manager chooses stocks according to their potential. This makes the fund a well-diversified one, as it can invest across market capitalization and across sectors, which is another huge benefit, helps in risk management of the fund, and optimizes returns. 

Performance and Returns 

SBI Magnum Equity ESG Fund- Direct-Growth has offered a consistent return over the years. It has been offering an annualized return of 14.77% since its launch back in 1 Jan 2013. Here is a detailed analysis of the returns generated by the fund – 

Time Frame	SBI Magnum Equity ESG Fund Direct-Growth Return (%) (as of 20 Dec 2024)	BSE 100 TRI Return (%)(as of 23 Dec 2024)	ESG – Thematic Fund Category Average (as of 23 Dec 2024)
10 Year Return	13.31	13.18	–
5 Year Return	15.93	16.89	18.64
3 Year Return	13.73	14.66	13.78
1 Year Return	16.71	15.77	19.79
6 Month	0.88	1.56	3.34
3 Month	-6.71	-8.23	-8.10
YTD	13.68	13.74	17.86

From the above table, it can be understood, that the SBI Magnum Equity ESG Fund is consistent with its return and the volatility is not that high, but it offers a below-average return when compared to its peers and even the BSE 100 index. 

Investment Allocation (As of 30 Nov 2024)

The SBI Magnum Equity ESG Fund Growth currently has 98.34% of its assets allocated into the equities and equity-related instruments, and 1.66% allocated into cash and cash equivalents.  

Market cap-wise asset allocation 

• Giant cap – 69.86%
• Large Cap – 12.11%
• Mid-cap – 18.03%

As of 30 Nov, the fund had an average market cap of ₹ 335056 crore which is spread across a portfolio of 40 stocks in total. The top 10 stocks make up to 53.17%, while the top 3 sectors make up to 60.94%. 

Sectoral Allocation 

The top five sectors in this fund include – 

Sectors	Allocation (%)
Financial sector	34.19
Technology	20.22
Industrials	14.23
Consumer discretionary	13.87
Materials	5.28

Stock-wise Allocation 

Top five stocks – 

Stock	Assets (%)
HDFC Bank	9.02
Infosys	8.64
ICICI Bank	7.80
Tata Consultancy Services (TCS)	4.79
Larsen & Turbo (L&T)	4.69

Key Metrics 

As of 30 November 2024, the fund’s expense ratio stood at 1.31%, which is a bit higher than the category average of 0.85%.

Fund Details	Information
AUM (Assets Under Management)	₹5806 Crore as of 30 November 2024
Category	Equity Fund – Thematic ESG
Fund Managers	Rohit Shimpi
Exit Load	1% for redemption within 365 days
Entry Load	Nil
Minimum Investment	₹1000 (Lump sum)₹ 500 (SIP)
Benchmark	Nifty 100 ESG TRI

The SBI Magnum Equity ESG Fund NAV as of 20 December 2024 stood at ₹252.37. 

Risk and Performance of the SBI Magnum Equity ESG Fund

This fund is classified as a ‘Very High Risk’ fund, which means the fund has the potential for higher returns but the volatility will be high as well. 

1. Standard Deviation (Std Dev %): It shows how much the returns may vary from the average returns of the fund. The higher this number, the more it fluctuates.

SBI Magnum Equity ESG Fund has a standard deviation of 12.75%, which is a bit lower than the category average of 13.98% and even lower than the standard deviation of BSE 100 TRI, which is 12.99%. 

2. Sharpe Ratio: This ratio indicates the return you get for the risk you are taking. A higher number means better risk-adjusted returns.

This fund has a Sharpe ratio of 0.59% while the category average is 0.62% indicating, the fund has bit poor risk-adjusted returns. 

3. Sortino Ratio: It is similar to Sharpe but only looks at downside risk (the risk of losing money).

The Sortino ratio of SBI Magnum Equity ESG Fund Direct plan growth is 1.16 while that of the category is 1.10 on average, which again depicts lower risk-adjusted gains and a bit higher downside risks. 

4. Beta: This ratio indicates the volatility of the fund’s performance, compared to similar funds in the market. The lower the Beta, the more predictable the returns are, and vice versa. It helps in comparing funds. 

SBI Magnum Equity ESG Fund has 0.94% as beta while the category average is 0.97 indicating lesser volatility of the fund.  

5. Alpha: It measures the extra return the fund gives above the market’s average return.

SBI Magnum Equity ESG Fund has a negative alpha of 1.24, which indicates that the fund gives a lower return compared to the market’s average or category average. 

Taxation for SBI Magnum Equity ESG Fund

SBI Magnum Equity ESG Fund’s returns are taxable as per equity funds returns – 

1. Short-Term Gains – If you sell the fund units within 365 days of investment, a 20% tax will be levied on the entire return generated during the period. 
2. Long-Term Gains – If you sell the fund units after one year, a 12.5% tax will be levied on returns over ₹ 1.25 lakh. The same rate will be applicable for any investment tenure above 1 year. 

The longer the tenure better be tax-adjusted returns! Start investing today with our Mutual Fund App. 

3. Taxes on Dividends – Dividends earned if any will be taxable at the hands of investors as per their tax slabs. If the dividend income surpasses Rs. 5000 in a financial year, then the fund house will deduct 10% TDS before disbursing the dividend into the account of the investor. 

Minimum Investment and Lock-in Period

The minimum investment amount in the SBI Magnum Equity ESG Fund is ₹1000 for a lump sum and for SIP, it is ₹ 500. There is no lock-in period for the SBI Magnum Equity ESG Fund Direct-Growth.

How to Invest in SBI Magnum Equity ESG Fund Direct?

You can invest in the SBI Magnum Equity ESG Fund- Direct-Growth plan with Shoonya. 

Shoonya offers a free Demat account, lifetime zero brokerage trading, advanced trading tools, 100+ technical indicators, and much more!

Investing in Lump Sum Mutual Funds through the Shoonya Web Platform

Here’s a quick guide on how to invest in lump sum mutual funds through the Shoonya web platform:

1. First, you must log in to your Shoonya account at trade.shoonya.com. From the “Orders” section, click on “MF order.”
2. Search for the fund you wish to invest in; in this case, the SBI Magnum Equity ESG Fund- Direct Growth plan.
3. Choose “Fresh” for a new investment and enter the amount you want to invest.
4. You can complete your purchase by clicking the “Purchase” button.
5. You will receive a payment link on your registered email. Use the link to make the payment.

After payment, your mutual fund units will be allotted to your Demat account within T+2 days.

Note: You can only make the payment using the bank account registered with your Demat account.

Setting Up an SIP for Mutual Funds

If you prefer a Systematic Investment Plan (SIP) for SBI Magnum Equity ESG FundDirect Plan-Growth plan, you must follow these steps:

1. First, you need to log in to your Shoonya account at trade.shoonya.com. Go to “Orders” and click on “XSIP.”
2. Find the mutual fund for which you want to set up an SIP. In this case, the SBI Magnum Equity ESG Fund- Direct Growth plan.
3. If this is your first SIP with Shoonya, you need to create a Mandate ID. 

For that, you must enter the mandate amount and the validity date (until you want to keep your SIP active).

4. You must submit the details, and you’ll receive a Mandate authentication link via email. Approval generally takes 24 hours.

Once your Mandate is approved, you can follow these steps to set up your SIP:

1. Go to “XSIP,” enter the SIP amount, and select “Fresh” as the transaction type.
2. Choose the date when the SIP will be debited directly from your registered bank.
3. The approved Mandate ID will auto-reflect.
4. Choose “Monthly” for monthly debits and specify the number of installments (e.g., 24 installments for a 2-year SIP).

If you do not want to forget your SIPs and invest systematically, the SIP method can be most suitable for you. 

Why Invest in the SBI Magnum Equity ESG Fund?

The top reasons for investing in the SBI Magnum Equity ESG Fund Direct-Growth can be – 

• A highly diversified portfolio of investments which invest across sectors, and market caps
• The fund’s performance has been consistent over the years, with lower-than-average volatility.
• It is taxed as an equity fund which offers tax benefits

Suitability of this Fund| Who Should Invest?

The SBI Magnum Equity ESG FundDirect is suitable for investors who:

• Interested in sustainable investing 
• Are looking for higher returns and ready to take higher risk 
• Want to diversify their portfolio 
• Looking for long-term capital appreciation, you need to stay invested for at least five years to witness fair and generous returns. 

Conclusion

For long-term sustainable investments, SBI Magnum Equity ESG Fund can be considered as it has been offering a stable return over the years. However, you also need to look at the other factors whether you are a risk taker or risk average, and your investment goals. If you are ready to stay invested and have a good risk appetite, then this fund can be considered. 

FAQs| SBI Magnum Equity ESG Fund Direct Plan-Growth plan

Source: ValueResearch

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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.