Magnum Global has emerged a star with a change in its fortune in 2004. This fund has put the stock market rally of these stocks in the last few years to good use to generate huge returns.
The fund has generated better returns as compared to its category in every quarter since 2004 only to buck the trend in the last quarter. Magnum Global was ranked the first and second in its category in 2004 and 2005, respectively.
Its five-yearly returns of 52 per cent (annualized) rank it at fourth place in the category of diversified equity funds.
Funds were allocated in 2006 to cash in on the infrastructure boom with the top sector allocations going to basic and engineering and construction companies. Especially in the mid-cap space these companies have seen runaway success with a rally in cement and infrastructure stocks over 2006. In the recent past, the fund has maintained a high allocation to cement stocks at upwards of 6.6 per cent.
Magnum Global's record of outperforming the category over the past 15 quarters was finally broken at the end of the March 2007 quarter when the fund lost 6.93 per cent compared to the category loss of 5.93 per cent. One of the reasons for this under performance has been the increase in interest rates which has affected infrastructure companies as well as the new budget which hasn't been too favourable to both infrastructure and cement companies. Nevertheless, it still managed to cling on to its 5-star status assigned by Value Research. Over the past six months, the fund has increased allocation to automobile, basic engineering and financial sectors to a great extent.
To sum it up, the fund is skillfully managed with a judicious balance of good stock picking, diversification and timely sector shifts. This one is a worthy choice for mid-cap admirers.
This article was originally published on June 13, 2007.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
