SBI Magnum Income Fund This product is suitable for investors who - - PowerPoint PPT Presentation
SBI Magnum Income Fund This product is suitable for investors who are seeking: Investment in debt and money- market securities Regular income for medium term Moderate risk SBI Magnum Income Fund Disclaimer: Investors should consult
Disclaimer: Investors should consult their financial advisors if in doubt whether this product is suitable for them. SBI Magnum Income Fund
Data as on March 31, 2017
Past performance may or may not be sustained in future. Returns (in %) other than since inception are absolute, calculated for growth option of regular plan and in INR are point-to-point (PTP) returns calculated on a standard investment of 10,000/-. Additional benchmark as prescribed by SEBI for long-term debt schemes is used for comparison purposes.
31-Mar-2016 to 31- Mar-2017 31-Mar-2015 to 31-Mar-2016 31-Mar-2014 to 31-Mar-2015 Since Inception Absolute Returns (%) CAGR Returns (%) PTP Returns (INR) SBI Magnum Income Fund 12.71 5.86 13.09 7.86 40,132 Crisil Composite Bond Fund Index (Scheme Benchmark) 11.09 8.24 14.59 N.A. N.A. Crisil 10 year Gilt Index (Additional benchmark) 11.87 7.97 14.57 N.A. N.A. 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 31-Mar-2016 to 31-Mar-2017 31-Mar-2015 to 31- Mar-2016 31-Mar-2014 to 31-Mar-2015 Since Inception SBI Magnum Income Fund - Reg Plan - Growth Scheme Benchmark: - Crisil Composite Bond Fund Index Additional Benchmark: - Crisil 10 Yr Gilt Index
Type of Instrument % of Total Corpus Risk Profile
Corporate debentures & Bonds / PSU / FI / Govt. Guaranteed Bonds / Other including securitized Debt Upto 90% Low to Medium Securitized debt No more than 10% of the investment in debt Medium to High Government securities Upto 90% Low Cash and call money^ Upto 25% Low Money-market instruments* Upto 25% Low Units of other mutual funds Upto 5% Low
^ Pursuant to RBI Guidelines, presently Mutual Funds are not allowed to participate in Call Money.
* Money Market Instruments will include Commercial Paper, Certificates of Deposit, Treasury Bills, Bills Rediscounting, Repos, short term bank deposits, short-term Government securities (of maturities less than 1 year) and any other such short-term instruments as may be allowed under the regulations prevailing from time to time.
Data as on: April 30, 2017
Interest Rate Sensitivity Credit Quality
High Medium Low High Medium Low
The 10 year government bond yield hardened during the month while those of SDL’s, UDAY Bonds and AAA corporate bonds rallied leading to spread compression. We had built positions in these assets during March 2017 with a view of spread compression. Currently the portfolio has 16% exposure to SDL’s and UDAY and 13% to Government bonds while maintain a 6.33 year of average maturity with a portfolio yield of 7.88%.
Gsec, 28.94 NCD, 63.31 ZCB, 1.41 CBLO/Reverse Repo, 6.58 NCA, -0.24 Below AA+, 31.86 AA+, 14.50 SOV,AAA and Equivalent, 47.30 NCA(Incl. Cash,Deposits and Equity), 6.34
Source: Reuters/Bloomberg as on April 30, 2017
Due to favourable spreads available in AAA rated Corporate Bonds, funds have been deployed in
that segment to benefit from the carry. The rest of the portfolio will be tactically deployed to Gsec to play with duration and earn capital gains.
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60
Percentage
3 Year Spread 5 Year Spread 10 Year Spread
India Rates Snapshot for April 2017
continues to stay high relative to the start of the year.
issuance of CMBs.
Source: Bloomberg, PPAC, SBIMF Research; NB: **Crude oil price is average $/barrel for the month, rest of the data are % month end; *Corporate bond rate is for AAA rated bonds ,*** Refers to PSU Banks CD rate; # INR and Oil price changes are % change
Feb-17 Mar-17 Apr-17 m-o-m change (in bps) Change YTD (in bps) 1 Yr. T-Bill 6.33 6.17 6.21 31 8 3M T-Bill 6.20 6.20 6.10 40
10 year GSec 6.52 6.41 6.87 28 45 3M CD*** 6.28 6.33 6.38 5 7 12M CD*** 6.63 6.55 6.93 15 13 3 Yr Corp Bond* 7.29 7.07 7.27 16 30 5 Yr Corp Bond* 7.37 7.33 7.54 14 34 10 Yr Corp Bond* 7.58 7.57 7.83 8 32 1 Yr IRS 6.19 6.20 6.42 11 34 5 Yr IRS 6.26 6.32 6.70 18 56 Overnight MIBOR Rate 6.25 6.25 6.05
INR/USD 67.9 67.9 66.7 0.9 5.7# Crude Oil Indian Basket** 52.7 54.2 54.8 2.1
6.25% in its latest meeting on 6th April 2017.
side of the repo rate to 25bps to now. Accordingly, the reverse repo rate stands at 6% (5.75% before) and the rate under the marginal standing facility stands at 6.5% (6.75% before).
benign liquidity conditions which had led short-term rates to fall below the policy rate. The rate on the 3mth T-bill rate had fallen to almost 50bps below the repo rate in March. The narrowing of the band will increase the lower bound of the yield curve to 6% and also lower the volatility in short-term rates.
use its existing bouquet of instruments (LAF, term repos, cash management bills, MSS) to manage the excess liquidity in the near-term.
and believes that achieving the 4% mark will not be easy. Seemingly, the central bank remains wary of upside risks to inflation more even though it highlighted that risks are evenly
FY18 on the back of government spending, higher consumer spending and transmission of earlier rate cuts.
additional policy rate cuts are unlikely in 2017.
Policy Rate Outlook
Source: RBI, CSO, SBIFM Research 4.00 5.00 6.00 7.00 8.00 9.00 10.00 Jun-05 Feb-06 Oct-06 Jun-07 Feb-08 Oct-08 Jun-09 Feb-10 Oct-10 Jun-11 Feb-12 Oct-12 Jun-13 Feb-14 Oct-14 Jun-15 Feb-16 Oct-16 Repo Rate (mth end, %)
its monetary policy stance from accommodative to neutral and has continued to stay elevated there since.
from 6.41% in March. Massive foreign inflow during March and April (due to attractive valuations) also led to the increased demand for Indian G-sec and consequent fall in yields.
inflation is expected to inch up, this attractiveness will likely reduce.
policy stance, the yield curve would remain steeper in the coming months.
government bonds, liquidity situation of the banks once the pace
global outlook will take prominence in guiding the bond markets trajectory.
as average CPI settle lower and government’s measures to widen the tax base leads to structural improvement in the fiscal balance. Accordingly, we keep taking tactical calls in duration at the
Debt Market Outlook
Source: Bloomberg, SBIFM Research 4.00 5.00 6.00 7.00 8.00 9.00 10.00 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 10 year GSec yield (mth end, %) Repo Rate (mth end, %)
Portfolio Tactical Allocation: 50% to 60% Strategic Allocation : 30% - 40 %
The fund manager will actively manage the duration of the portfolio based on the combination of the above two strategies
This portion of the funds is invested in 2-5 years Corporate Bonds
Strategic Allocation : Accruals Tactical Allocation : Long Bonds
The segment currently looks attractive on account of comfortable liquidity outlook. This portion of the portfolio provides stable returns without too much volatility The allocation to the long bonds/ GSecs would provide trading
Long bonds yields may remain volatile in the near term. Attractive absolute yield levels provide an opportunity from a long term perspective. This portion of the portfolio may also be used to take defensive positions as per fund managers outlook
SBI Magnum Income Fund An actively managed fund , maintaining a high quality portfolio while taking active calls on managing the duration of the portfolio. The portfolio switches actively among government and corporate debt depending on the market conditions and the fund managers views. Inception Date 25-Nov-98 Fund Manager
Managing Since Jan-11 Minimum Investment Amount
Additional Investment Amount
Exit Load For exit within 1 year from date of allotment – Nil for 10% of investment & 1.00% for remaining amount For exit after 1 year – Nil Investor Suitability Investors having a investment horizon of minimum 1 year Investors having a reasonable risk appetite.
Economic / Market Analysis
inflows
Credit selection Security allocation Spread Dynamics Sector Allocation
12
Internal Mandate
Tactical Management
Credit Analysis
Duration position Yield curve position
Portfolio Construction Top down Bottom-up
Performance of other schemes managed by Mr. Dinesh Ahuja
Past performance may or may not be sustained in the future. Returns (in %) other than since inception are absolute calculated for growth option and in INR are point-to-point (PTP) returns calculated on a standard investment of 10, 000/-. Additional benchmark as prescribed by SEBI for long-term and short-term debt schemes is used for comparison purposes only. Performance calculated for regular plan.
*Returns for scheme benchmark index I Sec and Li-BEX is calculated using CRISIL Fund Analyser
*Returns for scheme benchmark index Isec and SI-BEX is calculated using CRISIL Fund Analyser Managing since January, 2011
31-Mar-2016 to 31-Mar- 2017 31-Mar- 2015 to 31- Mar-2016 31-Mar- 2014 to 31- Mar-2015 Since Inception
Absolute Returns (%) CAGR Returns (%) PTP Returns (INR)
SBI Dynamic Bond Fund - Reg Plan - Growth 13.62 5.57 13.69 5.65 20,600 Crisil Composite Bond Fund Index 11.09 8.24 14.59 6.75 23,617 Crisil 10 Yr Gilt Index 11.87 7.97 14.57 5.80 20,995
Managing since January, 2011
31-Mar- 2016 to 31- Mar-2017 31-Mar-2015 to 31-Mar- 2016 31-Mar-2014 to 31-Mar- 2015 Since Inception Absolute Returns (%) CAGR Returns (%) PTP Returns (INR) SBI Magnum Gilt Fund
11.96 8.93 13.20 7.97 34,711
I Sec Si-BEX*
8.38 9.06 9.75 N.A. N.A.
Crisil 1 Year T-Bill Index
7.15 7.69 8.74 6.31 26,994
Managing since January, 2011
31-Mar- 2016 to 31- Mar-2017 31-Mar- 2015 to 31- Mar-2016 31-Mar-2014 to 31-Mar- 2015 Since Inception Absolute Returns (%) CAGR Returns (%) PTP Returns (INR) SBI Magnum Gilt Fund
14.74 5.90 21.34 8.36 36,894
I Sec Li-BEX*
12.47 7.26 19.88 N.A. N.A.
Crisil 10 Year Gilt Index
11.87 7.97 14.57 N.A. N.A.
31-Mar- 2016 to 31-Mar- 2017 31-Mar- 2015 to 31- Mar-2016 31-Mar- 2014 to 31-Mar- 2015 Since Inception Absolute Returns (%) CAGR Returns (%) PTP Returns (INR) SBI Regular Savings Fund
13.29 6.67 16.18 8.06 28,221
Crisil MIP Blended Index
12.30 5.67 16.45 8.13 28,483
Crisil 10 Yr Gilt Index
11.87 7.97 14.57 5.72 21,074
Navneet Munot joined SBI Funds Management as Chief Investment Officer in December 2008. He brings with him over 15 years of rich experience in Financial Markets. In his previous assignment, he was the Executive Director & Head - multi - strategy boutique with Morgan Stanley Investment Management. Prior to joining Morgan Stanley Investment Management, he worked as the CIO - Fixed Income and Hybrid Funds at Birla Sun Life Asset Management Company Ltd. Navneet had been associated with the financial services business of the group for over 13 years and worked in various areas such as fixed income, equities and foreign exchange. Navneet is a postgraduate in Accountancy and Business Statistics and a qualified Chartered Accountant. He is also a Charter holder of the CFA Institute USA and CAIA Institute USA. He is also an FRM Charter holder of Global Association of Risk Professionals (GARP).
Dinesh Ahuja joined SBIFM in 2010. Prior to joining SBIFM, Dinesh was a portfolio manager at L&T Asset Management and Reliance Group for four years. Dinesh started his career in 1998 as a fixed income dealer
side in 2006. Dinesh is a Commerce graduate and holds his Masters degree in Finance from Mumbai University.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully. This presentation is for information purposes only and is not an offer to sell or a solicitation to buy any mutual fund units/securities. These views alone are not sufficient and should not be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All
Neither SBI Funds Management Private Limited, nor any person connected with it, accepts any liability arising from the use of this information. The recipient of this material should rely on their investigations and take their own professional advice SBI Funds Management Private Limited (A joint venture between SBI and AMUNDI) Registered Office: 9th Floor, Crescenzo, C-38 & 39, ‘G’ Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051 Board line: +91 22 61793000 Fax: +91 22 67425687
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