A Guide To Investing In Sbi Magnum Gilt Fund

The SBI Magnum Gilt Fund is a mutual fund that invests primarily in bonds issued by the Government of India. The fund aims to generate returns through investments in government securities, maintaining an average maturity of more than three years. With a moderate risk profile, the fund offers a safe investment option for those seeking long-term investment opportunities. The fund has consistently generated solid returns, with an average annual return of 9.39% since its inception 11 years ago. To invest in the SBI Magnum Gilt Fund, individuals can purchase it directly from the SBI Mutual Fund website or through platforms like MF Central and MF Utility. Alternatively, investors can seek assistance from a mutual fund distributor or their bank.

Where to buy SBI Magnum Gilt Fund

There are several ways to buy the SBI Magnum Gilt Fund. One way is to buy directly from the website of the fund house. In this case, that would be the website of SBI Mutual Fund. Alternatively, you can buy through platforms like MF Central and MF Utility.

If you are uncomfortable buying mutual funds online, you can seek help from a mutual fund distributor, such as a bank.

SBI Magnum Gilt Fund's investment objective

The SBI Magnum Gilt Fund is a gilt mutual fund scheme that aims to generate returns by investing in government securities. The fund typically maintains an average maturity of more than three years and is mandated to invest at least 80% of its assets in bonds issued by the Government of India.

These bonds are considered low-risk investments since the government backs the repayment of investors' money. However, they are susceptible to significant fluctuations due to changes in interest rates. The fund has a moderate risk level and has delivered consistent returns, outperforming other gilt funds in the last 10 years.

The fund has been in existence for over 11 years and has provided average annual returns of around 9% since its inception. It has an expense ratio of 0.46%, which is comparable to other gilt funds.

The SBI Magnum Gilt Fund is suitable for investors seeking stable but slow growth over a period of 1 to 5 years or longer. It is rated as a low-to-moderate-risk investment option.

SBI Magnum Gilt Fund's tax implications

SBI Magnum Gilt Funds Tax Implications

The SBI Magnum Gilt Fund is a moderate-risk investment option that primarily invests in government securities, with a focus on bonds issued by the Government of India. These bonds are considered safe due to the government backing but are susceptible to interest rate fluctuations. When considering tax implications, the timing of your investment matters.

If you invested in the SBI Magnum Gilt Fund before 1 April 2023:

• Selling within 3 years of investment: Any gains will be taxed according to your income slab rate.
• Selling after 3 years of investment: Gains are taxed at a rate of 20% with the benefit of inflation indexation.
• Dividends: Dividends are added to your income and taxed according to your tax slab. If your dividend income exceeds Rs. 5,000 in a financial year, a TDS of 10% is deducted by the fund house before distributing the dividend.

If you invested in the SBI Magnum Gilt Fund on or after 1 April 2023:

Selling after investment: The entire amount of gain is added to your income and taxed according to your applicable slab rate.

Additionally, there is no tax to be paid if you continue to hold the units, and there is no lock-in period for this investment.

SBI Magnum Gilt Fund's performance

The SBI Magnum Gilt Fund is a mutual fund scheme that has been in existence for over 11 years, launched on 1 January 2013. The fund has delivered average annual returns of 9.39% since its inception. As of 26 July 2024, the fund had returned 7.99% since its inception. As of 16 September 2024, the fund's one-year returns were 10.51%.

The fund has delivered consistent returns, doubling the money invested in it every nine years. It has generated an 8.45% annual return in 70% of cases for investors holding for at least five years. The fund has no exit load.

The SBI Magnum Gilt Fund has a moderate risk level. As of 29 February 2024, the fund had invested 99.11% in debt and 0.89% in cash and cash equivalents. The fund's expense ratio is 0.94.

The fund's top holdings are in GOI securities, with 93.69% of its portfolio in GOI securities and 2.55% in GOI securities floating rate bonds.

SBI Magnum Gilt Fund's risk rating

The SBI Magnum Gilt Fund is rated as a moderate-risk investment fund. According to SEBI's Riskometer, the fund has a moderate risk level. While the fund invests primarily in bonds issued by the Government of India, which carry no risk of default, they are susceptible to significant fluctuations due to changes in interest rates. This volatility is further emphasised by the fund's tendency to invest heavily in long-dated instruments, making it sensitive to interest rate changes.

The SBI Magnum Gilt Fund has a credit rating indicative of an extremely strong ability to make timely interest payments and principal repayments. The fund's credit profile is considered very high, indicating that it lends to borrowers of excellent quality. Consequently, the risk of default in this fund is higher than the category average.

In terms of returns, the fund has consistently outperformed other Gilt funds over the last 10 years. It has generated an 8.45% annual return in 70% of cases for investors holding for at least five years. For every unit of risk, the fund produces 20% more returns. Additionally, the fund has delivered average annual returns of 9.39% since its inception 11 years ago.

The expense ratio of the SBI Magnum Gilt Fund is 0.46%, which is comparable to other Gilt funds. There is no exit load for this fund, and it does not have a lock-in period.

Frequently asked questions