Best SBI Mutual Funds for 2024: SIP, Lumpsum, and Growth Options
Do you know the State Bank of India Mutual Fund (SBIMF) is India’s largest bank-sponsored mutual fund? It has Asset Under Management (AUM) of Rs. 9.14 lakh cr. It was established in 1987 as a joint venture between State Bank of India and Amundi Asset Management, a leading French asset management company. SBIMF offers a wide range of mutual fund schemes across equity, debt, hybrid, and other categories, with a total of around 147 schemes. In this article, let’s look at some of the best SBI mutual funds, how they work, who should invest in the SBI mutual fund, benefits, risks, and how to choose the best sbi mutual fund for your portfolio.
List of Best SBI Mutual Funds in India (2024)
Here are some of the best SBI Mutual Funds in India for 2024 investments. This educational list is meant to ponder on which SBI mutual fund is best:
| Name | Sub-Category | AUM (Rs. in cr.) | Expense Ratio (%) | CAGR 5Y (%) | CAGR 10Y (%) | |
|---|---|---|---|---|---|---|
| SBI Magnum Midcap Fund | Mid Cap Fund | 22,338.38 | 0.77 | 30.64 | 18.98 | |
| SBI Infrastructure Fund | Sectoral Fund - Infrastructure | 5070.57 | 0.95 | 29.42 | 18.84 | |
| SBI Contra Fund | Contra Fund | 41326.63 | 0.58 | 33.20 | 18.59 | |
| SBI Large & Midcap Fund | Large & Mid Cap Fund | 28172.46 | 0.70 | 24.58 | 17.46 | |
| SBI Flexicap Fund | Flexi Cap Fund | 23,488.97 | 0.81 | 19.05 | 16.17 | |
| SBI Healthcare Opp Fund | Sectoral Fund - Pharma & Health Care | 3,202.66 | 0.89 | 32.84 | 15.96 | |
| SBI BlueChip Fund | Large Cap Fund | 51,632.73 | 0.79 | 19.65 | 15.36 | |
| SBI PSU Fund | Thematic Fund | 4,851.11 | 0.72 | 29.04 | 14.07 | |
| SBI Conservative Hybrid Fund | Conservative Hybrid Fund | 10,006.83 | 0.62 | 12.23 | 10.67 | |
| SBI Gold | FoFs - Gold | 2,244.77 | 0.1 | 13.63 | 9.81 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The funds mentioned are taken from Tickertape Mutual Funds Screener on 11th October 2024. They are sorted based on their 10-yr CAGR (highest to lowest) and belong to the Growth Plan.
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Top SBI Mutual Funds
Let us now learn more about SBI mutual funds listed above. Here is a brief overview of the 10 SBI Mutual Funds, listed above as the SBI Best Mutual Funds:
SBI Magnum Midcap Fund
SBI launched the Magnum Midcap Fund on 29th March 2005, focusing on mid-cap companies and offering investors growth opportunities. The fund primarily invests in equities of mid-cap companies, which typically have a market capitalisation between the largest 100 companies and the smallest companies listed on stock exchanges.
The fund currently manages an AUM (Assets Under Management) of Rs. 22,338.38 cr. and has an expense ratio of 0.77%. Over the past five years, the fund has delivered a Compound Annual Growth Rate (CAGR) of 30.64%, and over ten years, it has achieved a CAGR of 18.98%.
SBI Infrastructure Fund
SBI Infrastructure Fund, launched on 5th July 2007, is a sectoral fund. It focuses on companies engaged in the infrastructure sector. The fund invests in businesses linked to infrastructure development, such as construction, engineering, and capital goods.
It manages an AUM of Rs. 5,070.57 cr. and has an expense ratio of 0.95%. Over the last five years, the fund has delivered a CAGR of 29.42%, and over ten years, it has achieved a CAGR of 18.84%.
SBI Contra Fund
SBI launched the Contra Fund on 6th May 2005. It follows a contrarian investment strategy. It means that the fund aims to invest in companies that are currently underperforming or overlooked but have long-term growth potential. The fund identifies and invests in such companies to capitalise on their eventual recovery or growth.
The fund’s AUM stands at Rs. 41,326.63 cr., with an expense ratio of 0.58%. It has provided a 5-year CAGR of 33.20%, while its 10-year CAGR stands at 18.59%.
SBI Large & Midcap Fund
Launched on 25th May 2005, the SBI Large & Midcap Fund aims to offer a balance of stability and growth by investing in a blend of large-cap and mid-cap stocks. This fund provides exposure to companies with different market capitalisations, enhancing diversification for investors.
The fund has an AUM of Rs. 28,172.46 cr. and an expense ratio of 0.70%. Over the last five years, the fund has delivered a CAGR of 24.58%. Over the last ten years, it has achieved a CAGR of 17.46%.
SBI Flexicap Fund
The SBI Flexicap Fund was launched on 29th May 2005. It provides flexibility in its investment strategy by allocating funds across large-cap, mid-cap, and small-cap stocks based on market opportunities. This allows the fund manager to adjust the portfolio as per market conditions, optimising returns.
As of now, the fund has an AUM of Rs. 23,488.97 cr. with an expense ratio of 0.81%. The fund has a 5-year CAGR of 19.05%, while its 10-year CAGR stands at 16.17%.
SBI Healthcare Opportunities Fund
Launched on 31st July 2013, SBI Healthcare Opportunities Fund is a sectoral fund. It focuses on companies in the pharmaceutical and healthcare industries. It provides investors exposure to the rapidly growing healthcare sector, investing in companies across the value chain, from pharmaceuticals to healthcare services.
The fund manages an AUM of Rs. 3,202.66 cr., with an expense ratio of 0.89%. It has achieved a 5-year CAGR of 32.84% and a 10-year CAGR of 15.96%.
SBI BlueChip Fund
SBI BlueChip Fund, launched on 14th February 2006, is a large-cap equity fund. It invests in well-established companies with a proven track record. The fund focuses on companies that are part of the top 100 listed by market capitalisation.
The fund has an AUM of Rs. 51,632.73 cr. and an expense ratio of 0.79%. Over the past five years, the fund has delivered a CAGR of 19.65%, and over ten years, it has achieved a CAGR of 15.36%.
SBI PSU Fund
Launched on 10th July 2010, SBI PSU Fund is a thematic fund that invests primarily in public sector undertakings (PSUs). The fund seeks to capitalise on the growth potential of state-owned enterprises, which are typically involved in key sectors such as energy, finance, and infrastructure.
The fund has an AUM of Rs. 4,851.11 cr., with an expense ratio of 0.72%. The 5-year CAGR stands at 29.04%, and the 10-year CAGR is 14.07%.
SBI Conservative Hybrid Fund
SBI Conservative Hybrid Fund was launched on 24th February 2004. It aims to provide income generation and capital appreciation by investing in a mix of debt and equity. The fund primarily invests in debt instruments while maintaining a small portion of equity to enhance returns.
It manages an AUM of Rs. 10,006.83 cr. and has an expense ratio of 0.62%. The fund has delivered a 5-year CAGR of 12.23% and a 10-year CAGR of 10.67%.
SBI Gold Fund
SBI Gold Fund, launched on 17th September 2011, is a Fund of Funds (FoF). It primarily invests in units of SBI Gold Exchange Traded Fund (ETF). The fund provides investors an opportunity to invest in gold without physically holding the asset. It offers an indirect way of gaining exposure to gold’s price movements.
The fund has an AUM of Rs. 2,244.77 cr. and an expense ratio of 0.10%. Over the past five years, it has delivered a CAGR of 13.63%, while the 10-year CAGR stands at 9.81%.
How to Invest in SBI Mutual Funds?
Investing in SBI Mutual Funds can be a prudent way to diversify your portfolio and achieve your financial goals. Here are two primary methods to invest:
SBI Mutual Fund Online Investment
If you prefer direct control over your investments, online investment is a convenient option:
- Visit the website or app: Navigate to the official website of SBIMF or any of your preferred investment website/app to begin your investment journey.
- Log in or Register: Use your existing credentials to log in, or create a new account by registering with your details.
- Explore Fund Schemes: Browse through the various SBI mutual fund schemes available, considering your investment goals and risk tolerance. Whether you are interested in SBI mutual fund SIPs or a lumpsum investment, there are options like the SBI Bluechip Fund and SBI Magnum Midcap Fund that you might find suitable. However, before investing, it is always worthwhile to consult a financial advisor.
- Invest: Follow the instructions on the platform to complete your investment.
Investing through a Distributor
If you prefer guidance, investing through a distributor might be the best approach:
- Find a Distributor: Locate a trusted distributor who can assist you with the investment process. This can be particularly helpful if you are considering specific funds that require more detailed knowledge and expertise.
- Streamline the Application: The distributor will handle the paperwork and application, making it simpler for you.
- Understand the Costs: Keep in mind that using a distributor may involve higher expense ratios due to commissions, which can impact your overall returns.
Investing through the SBI MF Invest Online platform is straightforward, allowing you to manage your investments easily. You can access your account using the SBIMF login online feature, making it convenient to track the performance of your investments and make informed decisions. While investing directly through the SBI Mutual Fund website provides control, it can be cumbersome. Monitoring investments across multiple mutual fund houses may be challenging.
Alternatively, using a distributor can simplify the process but may result in higher expense ratios, affecting your overall SBI mutual fund returns over the last 10 years. Hence, choosing a method that aligns with your preferences and investment goals can be beneficial. But, before starting your investment journey, it is always worthwhile to consult a financial advisor.
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What are SBI Mutual Funds?
SBI Mutual Fund Trustee Company Pvt. Ltd. oversees the operations of SBI Mutual Fund, which has been a significant player in India’s mutual fund landscape since its inception. The fund was established on June 29, 1987, and officially incorporated on February 7, 1992, making it India’s second mutual fund after the Unit Trust of India, which was founded in 1963.
Historical Background
SBI Mutual Fund was created to provide Indian investors with opportunities to grow their wealth through professional SBI asset management. The fund operates under the sponsorship of the State Bank of India (SBI), one of the country’s largest and most trusted banking institutions. This backing by SBI adds a layer of trust and stability to the mutual fund operations, making it one of the best mutual funds to invest in 2024 for long-term investors.
Partnership with Amundi
In a strategic move in July 2004, SBI sold a 37% stake in SBI Mutual Fund to Amundi, a prominent French asset management company. Crédit Agricole and Société Générale jointly created Amundi. People around the world recognise Amundi for its expertise in asset management. This partnership has been instrumental in enhancing the fund’s global reach and bringing international best practices to its operations, helping it become one of the best performing SBI mutual funds in the market.
Range of Investment Options
SBI Mutual Fund offers a wide array of mutual fund schemes designed to cater to diverse investor needs. These include:
- Equity Funds: These SBI equity mutual funds invest primarily in stocks and aim for long-term capital appreciation. Examples include the SBI Bluechip Fund and the SBI Magnum Midcap Fund. These are considered some of the best SBI mutual funds to invest in 2024.
- Debt Funds: These funds invest in fixed income securities such as bonds and treasury bills. They are suitable for investors looking for stable returns with lower risk.
- Hybrid Funds: These funds invest in a mix of equity and debt instruments, providing a balance between risk and return. The SBI Equity Hybrid Fund is a notable example. Many recommend it as one of the best SIP options in SBI Mutual Funds.
- Other Categories: SBI Mutual Fund also offers thematic funds, index funds, and fund of funds to cater to specific investment strategies and preferences. For instance, those looking for the best SBI mutual fund for SIP long term often explore hybrid and equity options.
Assets Under Management
As of the latest data, SBI Mutual Fund manages assets worth Rs. 9.14 lakh crore. This substantial AUM highlights the fund’s dominant position in the market, with schemes like the SBI high return mutual fund consistently delivering solid performance over time. Additionally, when reviewing SBI mutual fund returns 10 years, these funds have shown remarkable growth, appealing to both SIP and lumpsum investors.
Regulatory Compliance
SEBI registers SBI Mutual Fund, ensuring it adheres to stringent regulatory standards. The fund received its SEBI registration on December 23, 1993, reinforcing its commitment to transparency, accountability, and investor protection. Its adherence to regulatory compliance makes it one of the top mutual funds for safety-conscious investors to invest in 2024.
SBI Mutual Fund leverages technology through its SBIMF platform, enabling investors to access information, track investments, and generate their SBI mutual fund statement or SBI MF account statement with ease. Backed by the State Bank of India and partnered with Amundi, it offers a diverse range of investment schemes. These cater to needs such as high returns and stable income, making SBI funds a reliable choice for both SIP and lumpsum investments. Additionally, many investors consider the best SBI mutual fund for lumpsum investment when looking for long-term financial planning.
Documents Required to Invest in SBI Mutual Funds
The KYC process requires specific documents to verify a client’s identity and address. Acceptable officially valid documents (OVD) include:
Proof of Identity
PAN Card (mandatory)
- Voter ID Card
- Driving Licence
- Passport
- Aadhaar Card
- Any valid identity card issued by the Central or State Government
Proof of Address
- Voter ID Card
- Driving Licence
- Passport
- Ration Card
- Aadhaar Card
- Bank account statement or passbook
- Utility bills (e.g., electricity or gas bills)
How Do SBI Mutual Funds Work?
SBI Mutual Funds operate on the principle of pooled investments, where multiple investors combine their resources to create a diversified portfolio. Investors purchase units of the fund, and the Net Asset Value (NAV) represents the fund’s value per unit. SBI Mutual Fund schemes offer various options catering to different risk profiles and financial objectives, including some of the top 10 mutual funds for both stability and growth.
Fund Management and Strategy
The fund manager plays a crucial role in SBI Mutual Funds. They make strategic decisions on asset allocation to maximise returns within the fund’s defined investment objectives. The team regularly monitors and adjusts the investment strategy to align with market conditions, ensuring its ongoing effectiveness.
Investors can choose from a range of funds, including SBI equity funds, debt, and hybrid funds, each serving distinct purposes. For instance, those seeking high returns might consider the SBI top mutual fund options, while those looking for stability might opt for debt funds. The performance of these funds is subject to market fluctuations, so it’s essential to assess your risk tolerance and investment horizon before selecting a specific fund. SBI offers some of the best mutual funds to invest in for 2024, including equity fund schemes recognised for their strong market performance.
Investment Process
The SBI Mutual Fund AMC and various mutual fund companies facilitate investment transactions, such as buying and redeeming units. The overall functioning of SBI Mutual Funds adheres to regulatory guidelines, ensuring transparency and investor protection throughout the investment journey. Investors can also check the SBI mutual fund interest rate today to understand the potential returns before committing to a fund. Using platforms like SBIMF, investors can easily manage their investments online, whether they’re investing in the best mutual fund of SBI for the long term or exploring short-term opportunities.
Who Should Invest in SBI Mutual Funds?
SBI Mutual Funds cater to a diverse investor base due to their wide range of offerings. Investors seeking stability and credibility may find SBI MFs appealing due to their long track record and the backing of the State Bank of India.
- Conservative Investors: Those looking for stability can explore SBI debt funds or hybrid funds like the SBI Hybrid Equity Fund.
- Growth-Oriented Investors: If you are looking for higher returns and can tolerate more risk, equity funds such as the SBI Bluechip Fund may be suitable.
- Long-Term Investors: Individuals with a long-term horizon might consider funds like SBI Multicap Funds, which provide professional fund management and market exposure.
It’s crucial for potential investors to evaluate their financial goals, risk tolerance, and investment horizon before considering SBI Mutual Funds. The comprehensive suite of funds allows for flexibility, making them potentially suitable for a broad spectrum of investors. However, thorough research and consideration of individual financial circumstances are always crucial to consider before making any investment decision.
Risks Involved While Investing in SBI Mutual Funds
Investing in SBI Mutual Funds, like any financial endeavour, comes with inherent risks. Being aware of potential challenges can help you make informed decisions.
Market Fluctuations
The value of SBI Mutual Funds can be highly susceptible to market volatility. Economic conditions, global events, and market sentiment can lead to significant fluctuations in the fund’s net asset value (NAV), impacting overall returns of even the best mutual fund in SBI. For instance, an economic downturn or geopolitical unrest might negatively affect market performance, subsequently influencing your investments.
Past Performance Not Indicative of Future Results
It’s essential to understand that historical performance does not guarantee future success. The fund’s past achievements may not necessarily predict its future performance. Hence, investors should exercise caution when relying solely on historical data while making investment decisions, even in the case of the SBI mutual fund best schemes.
Economic and Political Influences
Economic and political changes can affect SBI Mutual Funds. Shifts in interest rates, inflation rates, or alterations in government policies can significantly affect the fund’s overall performance. For example, a sudden increase in interest rates could reduce the value of bonds in a debt fund, affecting its returns.
Liquidity Risk
Investors might encounter challenges in selling SBI Midcap Fund assets swiftly at fair market prices, particularly during times of market stress. This liquidity risk can impact the fund’s ability to meet redemption requests efficiently, potentially causing delays or additional costs, even for the best SBI funds.
Credit Risk
SBI Mutual Funds may invest in various securities, each carrying its own credit risk. There’s a possibility of default by issuers of these securities, which could negatively impact the fund’s performance and returns. This risk is particularly pertinent in funds that invest in corporate bonds or other fixed-income instruments.
Specific Fund Risks
Each SBI Mutual Fund has unique risks based on its investment objectives and portfolio composition. Downturns in a specific sector can significantly impact a sector-specific fund since its investments concentrate in that area. Therefore, it’s crucial to thoroughly review the scheme-related documents of the best SBI MFs to understand these specific risks and ensure they align with your risk tolerance and financial goals.
Benefits of Investing in SBI Mutual Funds
SBI Mutual Funds offer a range of advantages for investors seeking a diversified and reliable investment avenue.
Proven Track Record
SBI Mutual Funds, including the best SBI funds for SIP, have a track record of consistent performance over the years, reflecting stability and reliability in managing investments. This history of performance can provide investors with a degree of confidence in the management’s capability.
Diverse Fund Options
With a wide array of funds catering to various risk appetites and financial goals, SBI Mutual Fund investment offers flexibility. You can choose from equity, debt, and hybrid funds, aligning with your specific investment preferences. For example, SBI Large Cap Funds might appeal to those seeking steady growth, while SBI Tax Saving Mutual Funds can offer tax benefits under Section 80C of the Income Tax Act.
Professional Fund Management
Seasoned professionals manage SBI Mutual Funds, using rigorous research and strategic insights to optimize returns and mitigate risks for investors. This professional management ensures that your investments are in capable hands, potentially enhancing your returns.
Transparent Processes
SBI Mutual Funds maintains transparency by providing clear disclosures and regular updates, which builds trust and keeps investors well-informed about their investments. Regular updates and detailed reports help investors track their investments’ performance effectively.
Cost-Efficient Solutions
SBI Mutual Funds aim to provide cost-efficient investment solutions, minimising expenses and enhancing overall returns for investors. Lower expense ratios can make a significant difference in net returns over the long term.
How to Choose the Best SBI Mutual Funds for Investing?
When selecting SBI Mutual Funds for your investment portfolio, adopting a strategic and thorough approach is crucial. Here are some detailed steps to guide you:
Define Your Investment Goals
Start by clearly identifying your financial objectives. Are you seeking capital appreciation, regular income, or a balanced mix of both? Different SBI funds cater to various goals. For example, if you’re looking for long-term wealth creation, you might explore equity funds. Alternatively, if you need a steady income stream, debt funds could be more appropriate for your needs.
Assess Your Risk Tolerance
Understanding your risk tolerance is essential. Equity funds typically offer the potential for higher returns but come with greater volatility. If you can withstand short-term market fluctuations for the chance of higher long-term gains, equity funds might be suitable. Conversely, if you prefer stability and lower risk, debt funds may be a better option, although they generally offer lower returns.
Analyse Historical Performance
It’s important to review the historical performance of SBI Mutual Funds, but do so with caution. While past performance and MF account statements can provide insights into how a fund has been managed, it doesn’t guarantee future results. Look at both the short-term and long-term performance to understand the fund’s consistency and resilience in different market conditions.
Evaluate Expense Ratios and Fees
Consider the costs associated with each mutual fund, such as expense ratios and management fees. Lower expenses can enhance your net returns over time. Comparing the expense ratios of similar funds can help you choose a more cost-effective option.
Diversify Your Portfolio
Diversification is key to managing risk. By spreading your investments across equity, debt, and hybrid funds, you can reduce the risk of losses. This strategy helps mitigate the impact of poor performance in any one investment. SBI Mutual Funds provide a range of options. These options allow you to diversify based on your risk tolerance and goals.
Stay Informed
Keeping up-to-date with market trends and economic indicators can be vital. Regularly review the performance of your chosen funds and be prepared to make adjustments as market conditions change. Staying informed can help you make timely decisions that may optimise your returns or reduce risks.
Consult a Financial Advisor
Finally, it’s always beneficial to consult with a financial advisor. They can provide personalised advice based on your specific financial situation, goals, and risk tolerance. An advisor can help you navigate the complexities of investing in mutual funds and ensure your investment strategy is aligned with your long-term objectives.
By carefully considering these factors, you can make more informed decisions when choosing the best SBI Mutual Funds for your portfolio. Remember, each investor’s situation is unique, so what works best for one person may not be suitable for another.
Top SBI Fund Managers
Meet the driving forces behind SBI Mutual Fund’s success in a highly competitive market- the managers handling SBI fund management. Here are the top SBI mutual fund managers at SBI Funds Management Pvt Ltd:
Mr. R. Srinivasan – Chief Investment Officer (CIO) – Equity
Mr. R. Srinivasan has over 30 years of experience in the financial services space. He has been with SBI Funds Management Limited since 2009, where he directly manages several equity funds. Previously, he was the Head of Equity. Mr. Srinivasan holds a postgraduate degree in Commerce and an MFM from the University of Mumbai.
Mr. Rajeev Radhakrishnan – Chief Investment Officer (CIO) – Fixed Income
In 2008, Mr. Rajeev Radhakrishnan joined SBI Funds Management Limited as a fixed income portfolio manager. He currently heads the Fixed Income desk at the AMC. Before joining SBIMF, he was Co-Fund Manager for Fixed Income with UTI Asset Management for seven years. Rajeev holds an engineering degree and a master’s in finance from Mumbai University. He is also a charter holder of the CFA Institute, USA.
Mr. Denys de Campigneulles – Deputy Chief Executive Officer
Mr. Denys de Campigneulles has over 35 years of extensive experience in financial services. He has been the Deputy Chief Executive Officer of SBI Funds Management Limited since March 2020, deputed from Amundi Group. His prior roles include CIO of LCL Bank Paris, Head of Fixed Income Business Development at Amundi Paris, and Deputy CEO Asia at Amundi Hong Kong.
Mr. D.P. Singh – Chief Business Officer
Mr. D.P. Singh has been with SBI Funds Management since 1998, holding over 30 years of experience in banking and financial services. As the Chief Business Officer, he oversees all business verticals and segments of the organisation. His extensive background includes roles in retail banking, corporate credit, and information technology initiatives.
Mr. Srinivas Jain – Chief of Strategy, Digital & Technology
Mr. Srinivas Jain has 29 years of experience in the financial services industry, with over 22 years in investment management companies. He has been with SBI Funds Management since 2001. As Chief of Strategy, Digital & Technology, he oversees strategic initiatives, including heading the Digital and Technology teams and international business development.
Ms. Aparna Nirgude – Executive Director & Chief Risk Officer
Ms. Aparna Nirgude has been associated with SBI Funds Management Limited for over 26 years. She has been heading the Risk function since 2005. Ms. Aparna has held various responsibilities within the company’s Investment Management and Research teams. She holds a degree in Management from Jamnalal Bajaj Institute of Management Studies.
Mr. Ganesan Sonaimuthu – Chief Operating Officer
Mr. Ganesan has over 42 years of experience in key areas such as finance, credit, and investment management. Before joining SBI Funds Management Limited (FML), he worked at SBI for 35 years. At SBI, he held several important positions, including General Manager of Associates and Subsidiaries. His expertise spans administration, performance monitoring, planning, and HR.
What are the Returns on SBI Mutual Funds & How are They Calculated?
Understanding the returns on SBI Mutual Funds is essential for making informed investment decisions. These returns are typically computed using the Compound Annual Growth Rate (CAGR), which accounts for compounding effects, offering an accurate representation of annual growth over a specified period.
The Net Asset Value (NAV) is pivotal in calculating returns. NAV represents the per-unit market value of the mutual fund scheme and is determined by dividing the total market value of assets by the total number of units outstanding. Changes in SBI mutual fund NAV directly impact returns.
Factors Influencing Returns
- Market Fluctuations: Returns on SBI Mutual Funds are subject to market fluctuations and are influenced by the performance of the underlying assets and mutual fund company in the fund’s portfolio. Economic conditions, interest rates, and global events can all affect market performance, thereby impacting NAV and overall returns.
- Fund Performance: The historical performance of a fund can offer insights but should not be the sole basis for future expectations. Evaluating both short-term and long-term performance is essential.
Formula For Calculating Returns
CAGR = [(Ending balance/beginning balance)^1/n] – 1
Here, n = number of years.
For example, if the NAV of a mutual fund increased from ₹100 to ₹150 over three years:
CAGR = [(150/100)^⅓] – 1
This will come approximately 0.1447 or 14.47%. In this way, you can calculate returns for all SBI mutual funds.
Investors should note that returns on SBI Mutual Funds are subject to market fluctuations. These fluctuations are influenced by the performance of the underlying assets in the fund’s portfolio. It’s advisable to refer to official fund documents for detailed information. Additionally, seeking professional financial advice is recommended to understand the nuances of return calculations. This will help in making well-informed investment decisions that align with individual financial goals.
Taxation on SBI Mutual Funds as per Union Budget for 2024-25
The Union Budget for 2024-25 was presented by Finance Minister Nirmala Sitharaman on 23rd July 2024. Significant changes to the capital gains taxes were declared in this presentation. Investors interested in SBI mutual funds can find it beneficial to learn more about these revisions that may apply to their investments in the future. Here are some of the significant changes made in the taxation on capital gains for equity, debt and hybrid funds:
Equity Mutual Funds
- Short-Term Capital Gains (STCG): The gains from equity mutual funds held for less than 12 months are now taxed at 20%. This is an increase from the previous tax rate of 15%.
- Long-Term Capital Gains (LTCG): For equity mutual funds held for over a period of over 12 months, gains are classified as long-term capital gains. The new budget introduces these key changes to the LTCG:
- Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
- Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
- Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation was a method that allowed investors to adjust the purchase price of assets for inflation. This adjustment reduced taxable profits when selling assets like property or gold. Previously, these long-term capital gains were taxed at 20%. The new rule imposes a flat 12.5% tax on all long-term capital gains but eliminates any indexation benefits.
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 15% | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 10% | 12.50% |
Debt Mutual Funds
- Short-Term Capital Gains (STCG): If you sell your debt fund units within a period of 36 months, the gains are classified as short-term capital gains. The STCG will be taxed according to your income tax slab rate.
- Long-Term Capital Gains (LTCG): For debt funds held for a period over 36 months, the gains are classified as long-term capital gains. The new budget outlines a few changes on the LTCG for debt funds, including:
- Tax Rate: A flat 12.5% tax rate applies to these gains.
- No Indexation Benefit: The previous benefit of adjusting the purchase price for inflation is removed. Now, the entire gain after three years is taxable at 12.5%.
- Change in Holding Period for Specified Mutual Funds: Previously, debt mutual funds with a holding period of over 36 months were taxed based on the investor’s tax slab, classified as Long-Term Capital Gains (LTCG). Now, for specified mutual funds where over 65% of the investment is in debt, the holding period for taxation has been reduced to over 24 months. These funds will still be taxed according to the investor’s tax slab as either LTCG or STCG.
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 36 months | Taxed according to your income tax slab | Taxed according to your income tax slab |
| Long-Term Capital Gains (LTCG) | More than 36 months | 10% | 12.50% |
Hybrid Mutual Funds
Short-Term Capital Gains (STCG)
The tax on short-term capital gains depends on the fund’s asset allocation when it comes to hybrid mutual funds. Here is a breakdown of STCG tax rates according to their asset allocation in hybrid funds:
- Equity-Oriented Hybrid Funds (more than 65% in equity): The gains from units sold within 12 months are taxed at 20%.
- Debt-Oriented Hybrid Funds (less than 65% in equity): The gains from units sold within three years are taxed according to your income tax slab.
Long-Term Capital Gains (LTCG)
The long-term capital gains tax applies to hybrid mutual funds when they are held for longer than the specified period—12 months for equity-oriented funds or 36 months for debt-oriented funds. The tax treatment under this condition is as follows:
- Equity-Oriented Hybrid Funds: The gains from units held for over a period of 12 months are taxed at 12.5%. The gains up to Rs. 1.25 lakh are tax-free.
- Debt-Oriented Hybrid Funds: The gains from units held for over a period of 36 months are taxed at 12.5% without indexation benefits. This means the entire gain is taxed at this rate, without adjustment for inflation.
| Type of Hybrid Fund | Short-Term Capital Gains (STCG) | Long-Term Capital Gains (LTCG) | Indexation Benefit |
| Equity-Oriented Hybrid Funds | 20% for holdings less than 1 year | 12.5% for holdings over 1 year, with gains up to Rs. 1.25 lakh tax-free | Not available |
| Debt-Oriented Hybrid Funds | Taxed as per income tax slab for holdings less than 3 years | 12.5% for holdings over 3 years | Not available |
Note: Mutual fund schemes where neither the equity nor debt orientation exceeds 65% will now be classified as long-term investments after 24 months. The previous holding period for these funds was 36 months. These will be taxed at the revised LTCG tax rate of 12.5%.
Factors to Consider Before Investing in SBI Mutual Funds
When you’re thinking about investing in SBI Mutual Funds, it’s important to evaluate several factors to ensure your decision aligns with your financial goals. Here are key aspects to consider:
Fund Objectives and Strategy
Different funds cater to diverse financial objectives. Before investing, you should analyse whether your goals align with the SBI mutual fund you have chosen. This alignment helps ensure that the fund matches your specific financial goals.
Performance History
When evaluating a fund, it’s essential to look beyond recent trends and examine its performance over various market conditions. By analysing the historical performance, you can gauge the fund’s reliability and resilience. This can give you a better understanding of how the fund might perform in the future.
Risk Profile
You need to assess the risk of the fund to ensure it aligns with your risk tolerance and timeline. For example, equity funds generally carry higher risks compared to debt funds. Your choice should match your comfort with potential fluctuations in value.
The expense ratio of a fund affects your overall returns. Generally, lower expense ratios are more favourable as they reduce the cost of investment, potentially enhancing net returns. Evaluating the expense ratio will help you understand how much you will pay for fund management and its impact on your returns.
Fund Manager Expertise
Researching the experience and track record of the fund manager is crucial. The fund manager’s expertise and decision-making skills can significantly impact the fund’s performance. A seasoned manager with a strong track record can better navigate market fluctuations, which may benefit your investment.
Assets Under Management (AUM)
Looking at the AUM provides insights into the fund’s popularity and trust among investors. A higher AUM can indicate stability and investor confidence. However, it’s also important to ensure the fund’s size aligns with its investment strategy to avoid potential inefficiencies.
To Wrap It Up…
Exploring SBI Mutual Funds sheds light on a diverse range of investment options offered by one of India’s prominent financial institutions. The analysis emphasised the significance of aligning investment choices with individual financial goals, risk tolerance, and time horizon. By staying informed about fund categories, historical performance, and market trends, investors can make well-informed decisions tailored to their unique needs.
It is crucial to continually monitor and reassess investments in the context of changing economic conditions. SBI MFs provide a gateway to navigate the intricacies of the financial market, empowering investors with the knowledge needed to make strategic and informed choices in their pursuit of financial objectives.
Most Popular Mutual Funds:
As an investor to have a diversified mutual funds portfolio, you might also like to know more about these different types of funds for investing –
Frequently Asked Questions (FAQs) on SBI Mutual Funds
You may invest freely for any amount of time in SBI mutual funds. The open-ended funds offered by SBI have no exit loads, but the ELSS funds have a lock-in period of 3 years.
SBI Mutual Funds invest in a diversified portfolio across various asset classes, including equities, debt instruments, and money market instruments.
SBI Mutual Fund returns vary based on market conditions and the specific fund chosen. Our list of SBI mutual Funds have 1 year returns ranging from 18-41.2%. Check the latest performance reports or consult a financial advisor to get accurate and up-to-date information.
Experts recommend considering purchasing mutual funds when their Net Asset Value (NAV) is below the unit price, optimising returns. Investing during market downturns allows buying shares at reduced prices.
ELSS investments have a mandatory 3-year lock-in period, during which investors can benefit from a tax deduction of up to Rs 1.5 lakh.
Here is a list of the top 5 SBI mutual funds, sorted according to their 10-yr CAGR:
1. SBI Magnum Midcap Fund
2. SBI Infrastructure Fund
3. SBI Contra Fund
4. SBI Large & Midcap Fund
5. SBI Flexicap Fund
Note: The data on this list was taken on 11th October 2024 and is meant for educational purposes only.
