I have invested in Magnum TaxGain. Its lock-in period is now getting over. It has not given me good returns. Should I start an STP in Magnum TaxGain to other equity funds from SBI MF? I already have a SIP running in Magnum Contra Fund.
- Vijay Zanvar
Understand first that you do not need a systematic transfer plan (STP) to transfer money from one equity fund to another. STP is more effective when you switch between different asset classes, i.e. debt to equity and vice versa. It offers the benefits similar to those of an SIP.
As far as the performance of Magnum Taxgain is concerned, currently it has a 4-star rating by Value Research. It falls in the equity-tax planning category. From 2003-2006 this fund was the best performer within its category. In 2007, the fund broadened its portfolio and shifted its focus from small-and mid-cap stocks to large-cap stocks. These changes did not go in its favor, which got reflected in its performance. However, the fund managed to face the downturn well in 2008. In our view, Magnum Taxgain is a well-diversified fund, which can be a part of your portfolio for the long term.
This article was originally published on March 26, 2010.
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