Magnum Multiplier Plus was amongst the most criticised in the 2000-2001 meltdown. After delivering an astounding 218.91 per cent in 1999, the fund lost (-) 50.31 per cent in 2000 and followed it up with another disastrous (-) 41.58 per cent loss in 2001. The culprit for this abysmal performance was lack of ample diversification and highly concentrated bets taken in the IT space. But the fund managed to pull out of this trench.
A look at the most recent bearish quarters' ending June 2006 (April-June) and March 2007 (January-March) shows that the fund has learnt to manage the downside better than before, and has lost only as much as the category average. This has been done by reverting to the time tested strategy of diversifying holdings. As a result, the fund has managed to progressively deliver a much better risk- adjusted return compared to the average peer. With assets evenly divided between large and mid caps and a small exposure to small caps, the fund steers clear of a capitalisation bias.
But old habits die hard. It had a rather high 26 per cent allocation to the basic-engineering and another 9.67 per cent in the construction space (as on July 31). Now construction is 17.36 per cent and basic-engineering 16.34 per cent (September 30). Its IT sector exposure went down to 2.05 per cent (July 31) to rise to 8.05 per cent (September 30). The fund will sit well with investors who are willing to take on slightly higher risk than the category average.