SBI Mutual Fund (SBI MF) has announced the launch of its Magnum Equity Ex-Top 100 Long Short Fund, marking its second offering under the Specialized Investment Fund (SIF) framework. This new fund aims to provide investors with opportunities in companies outside India's top 100 by market capitalization, while employing a long-short strategy to mitigate market volatility.
The New Fund Offer (NFO) for the Magnum Equity Ex-Top 100 Long Short Fund will be available to investors from August 7, 2026, to August 20, 2026.
Understanding the Magnum Equity Ex-Top 100 Long Short Fund
This open-ended Specialised Investment Fund (SIF) primarily invests in equity and equity-related instruments of companies ranked beyond the top 100 by market capitalization. Unlike traditional equity funds, it incorporates limited short positions through derivatives. This dual approach allows the fund manager to pursue long-term capital appreciation while potentially reducing the impact of market downturns.
Why Focus Beyond the Top 100 Companies?
SBI Mutual Fund states that this strategy is designed to tap into a broader investment universe, including mid-cap and small-cap companies, along with businesses in emerging sectors. These companies often present higher growth potential compared to well-established large-cap firms. However, they can also experience greater price volatility, which the fund's long-short approach intends to balance with robust risk management.
How the Fund Will Invest
The fund's investment strategy will allocate 65% to 100% of its assets to companies outside the top 100 by market capitalization, including REITs. Up to 35% may be invested in top-100 companies, debt and money market instruments, overseas securities, and units of other mutual funds, including Gold and Silver ETFs, all within regulatory guidelines. Investments in InvITs can account for up to 20% of the portfolio, while overseas exposure may reach up to 35%.
Minimum Investment and Tax Implications
The minimum investment for new investors is set at ₹10 lakh, aligning with the eligibility norms for Specialized Investment Funds. Existing Magnum SIF investors can invest ₹1 lakh per application, provided their cumulative investment across Magnum SIF strategies totals at least ₹10 lakh.
Regarding taxation, long-term capital gains on investments held for over 12 months will be taxed at 12.5%. Gains up to ₹1.25 lakh in a financial year are exempt, subject to applicable surcharge and cess.
Fund Management and Benchmark
The Magnum Equity Ex-Top 100 Long Short Fund will be managed by Gaurav Mehta, CFA, who serves as the Head – SIF Equity at SBI Mutual Fund. Mehta also manages the Magnum Hybrid Long Short Fund. The strategy's performance will be benchmarked against the BSE 500 Total Return Index (TRI).
SBI Mutual Fund's Perspective
Debasish Mishra, Managing Director and CEO of SBI Funds Management Ltd., commented on the launch, stating, "This launch further expands our Specialized Investment Fund platform and underscores our commitment to research-driven investment solutions. The combination of investing beyond the top 100 companies and employing a systematic long-short approach is tailored to meet the evolving needs of investors seeking differentiated equity strategies."
SBI Mutual Fund has also issued a caution, reminding investors that Specialized Investment Funds involve relatively higher risks, including market volatility, liquidity risk, and the potential loss of capital. Investors are advised to carefully read all investment documents before making any investment decisions.