SWP Returns of Mutual Funds: Superb return by SBI Magnum Global Fund in last 10 years

If you had invested र 10 Lacs in SBI Magnum Global Fund - Regular Plan - Growth, 11 years back (date June 30, 2005) and started withdrawing र 8,000 per month after one year then the current value of your investment would have been र 46.19 Lacs even after withdrawing र 9.60 Lacs through 120 SWP instalments of र 8,000 each in the last 10 years (Based on June 16, 2016 NAV).

To come to this conclusion we presumed that the lumpsum investment of र 10.00 was made on June 30, 2005. We have also presumed that the monthly Systematic withdrawal of र 8,000 was started after one year on the 1^st of every month so that each and every SWP withdrawal amount becomes tax free (start date July 01, 2006). We did this study to show our readers how the SWP worked in this fund in last 10 years!

Please look at the chart below to understand how we have selected the different options in the SWP Research Tool to get the results. You can also explore our SWP Return Calculator to explore SWP returns of any fund of your choice.

Source: Advisorkhoj SWP Calculator

SWP (Systematic Withdrawal Plan) results

From the above chart you can see that you would have withdrawn a total of Rs. 9.60 Lacs in last 10 years, through 120 equal monthly SWP instalments of Rs. 8,000 each, thus, you would have got a tax free return of 9.6% every year. Even after withdrawing a tax free amount of Rs. 9.60 Lacs, the current value of your investment is amazing Rs. 46.19 Lacs! Based on June 16, 2016 NAV.

The interesting point is that when the market was hovering around its life time high during March – April 2015, SBI Magnum Global Fund - Regular Plan - Growth NAV on the SWP date of April 01, 2015 was र 136.2903 and the total value was at र 48.16 Lacs which is approximately र 2.00 Lacs more than the current value. Please note that you withdrew another 15 instalments of र 8,000 (Total र 1.20 Lacs) from the highest value point of 01/04/2015.

Download the cash flow in excel showing the details of SWP withdrawals, NAVs and values on respective dates Click here

We have analysed similar samples with other Mid Cap funds and found that SWP returns of SBI Magnum Global Fund - Regular Plan - Growth was one of the best amongst its peers.

About SBI Magnum Global Fund

SBI Magnum Global Fund is a popular Mid Cap Fund from SBI Mutual Fund stable. The Fund has an AUM of Rs. 2,783 Crores (as on May 31, 2016) and is being managed by well known fund manager, Mr. R. Srinivasan since 2009.

SBI Magnum Global Fund is one of the most consistently performing equity mutual funds in the Mid Cap Category. It is a Valueresearch 4 Star rated fund and CRISIL has given it Rank 3. CRISIL has also has given it Rank 2 in Consistent performers - Equity Funds category. This is an excellent fund to own if you are looking at diversification across Large and Medium sized companies in the Mid Cap segment. The fund manager follows bottom-up stock picking approach while selecting stocks with high competitive advantage, return on capital of 18-20 per cent and growth of 18-20 per cent.

The 66% assets of the fund are currently invested in Financial, Chemicals, FMCG, Services and Engineering and the top 5 stocks are P&G Hygiene & Healthcare, Cholamandalam Investment, Pidilite Industries, Divis Laboratories and Sundaram Finance.

The 3, 5 and 10 years annualised returns of the fund is quite impressive at 26.73%, 18.80% and 16.37% respectively (Based on NAV of June 16, 2016). The fund has beaten the Benchmark S&P BSE Mid Cap Index with very good margin.

Lumpsum returns of SBI Magnum Global Fund

SBI Magnum Global Fund – Regular Plan – Growth Option has given excellent lumpsum returns as well. The current value of investment of र 10 Lacs made on June 30, 2005, would be around र 70.00 Lacs - CAGR growth of 19.44% since inception (Based on June 16, 2016 NAV).

If you had invested the same amount in S&P BSE Mid Cap and CNX NIFTY then your accumulated amount would have been only Rs. 34.33 Lacs and र 36.66 Lacs respectively (Based on June 16, 2016 NAV). Therefore, it has beaten the return of both the Benchmarks by a huge margin.

Source: Advisorkhoj Lumpsum Return Calculator

Simply speaking your lumpsum investment in SBI Magnum Global Fund – Regular Plan – Growth has grown 7 times in 11 years!

Please check here Lumpsum Returns of SBI Magnum Global Fund – Regular Plan – Growth

To know lumpsum return of any fund, you may like to check our LUMPSUM RETURNS OF MUTUAL FUNDS - CALCULATOR

SIP Returns of SBI Magnum Global Fund

The SIP returns of SBI Magnum Global Fund – Regular Plan – Growth have also been very good! If you had started a monthly SIP of र 5,000, 11 years back on June 30, 2005, you would have accumulated a corpus of Rs. 18.14 Lacs as of June 16, 2016 whereas you had invested only र 6.60 Lacs through 132 instalments of र 5,000 each. During this period the fund has given a XIRR return of 17.44% which is one of the best amongst the peer group of schemes. Check SIP RETURN CALCULATOR

Further, if you see the chart below, you will notice that SIP in SBI Magnum Global Fund has also beaten the CNX NIFTY and S&P BSE Mid Cap Index SIP returns with a huge margin.

Source: Advisorkhoj SIP Return calculator

You may try this tool Top Performing SIP Funds to check Top Funds of any category.

What is Systematic Withdrawal Plan

In a Systematic Withdrawal Plan (SWP), you regularly withdraw a fixed amount on a fixed date or dates from a fund. The amount to be withdrawn and the frequency of withdrawal/s are decided by you. You can withdraw a fixed amount, based on your requirement, weekly, fortnightly, monthly, and quarterly or annually from your investment.

SWP withdrawals from an equity fund, after one year from the date of investment, is totally tax free as it is treated as long term capital gains. It is an ideal investment option for investors with lumpsum investible surplus and looking for regular income from their investments and at the same time want to see their investments grow in value.

Try our SWP RETURN CALCULATOR to know SWP returns of your favourite funds.

Conclusion

SBI Magnum Global Fund has given very good SWP returns since inception and may be a good choice for investors looking for regular income from their lumpsum investible surplus. The lumpsum and SIP returns of SBI Magnum Global Fund have also been stellar and it has beaten the benchmarks with huge margin.

The fund is suitable for investors for investors with moderately high risk taking appetite, looking for long term wealth creation to meet their financial goals.

Investors should note that past performance of mutual funds are no guarantees for future returns. Mutual fund investments are also subject to market risk and therefore investors must consult their financial advisors and check if investment in SBI Magnum Global Fund is suited for their investment needs based on their risk profile.

Would you like to check your risk profile? Try this

Readers interested in knowing more about SWP, should read the following –

Mutual Funds are ideal investment option for retirement planning

Mutual Fund systematic withdrawal plans are smart option for income needs