This fund house was recently in the news when its CIO, Sanjay Sinha, quit to join DBS Chola Mutual Fund. But if investors will remember rightly, they had the same apprehension years ago when Sandip Sabhwarwal quit.
SBI Fund Management is a wholly owned subsidiary of State Bank of India. It got into the business way back in 1987. In 2004, SBI divested 37 per cent of its stake in SBI Fund Management Pvt. Ltd., its mutual fund business, to French entity Société Générale Asset Management for over $35 million.
Looking at its public sector heritage, it has been a very bold player. Its aggressive fund management during the bull phase served it well. Fund manager Sabharwal made his mark by displaying a knack for identifying hidden gems. After his exit, Sanjay Sinha put to rest apprehensions that he could not fill his shoes. But now questions arise as to what direction the funds will take from now on and if any more of the team members decide to follow Sinha. Sinha was a very hands-on CIO and his exit will hurt the fund since the team there is rather young.
The AMC was initially known for its closed-end funds. Later, its open ended equity funds made their mark. It was the performance of three funds-Magnum Taxgain, Magnum Global and Magnum Contra-that resulted in investors' changing their perceptions. As these funds had a sensational run, their assets grew multi-fold. These three schemes handle Rs 6.008 crore, out of total equity assets of Rs 13,983 crore.
SBI Mutual Fund has seven funds which have a rating of 4- or 5-stars, including a hybrid equity oriented one, Magnum Balanced. On the debt side, this fund family has nothing much to show compared to its excellent performance in equity. Magnum Gilt Short-term is the only debt fund with a 5-star rating (none are 4-stars). This particular scheme had a phenomenal run last year after a poor performance in 2006.
Explanation of the data tables and graphs
This article was originally published on November 28, 2008.
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