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SBI Equity Hybrid Fund: Fund review

Among balanced schemes, SBI Equity Hybrid is one of the most stable performers in the long term.

, ET Bureau|
Last Updated: Aug 27, 2019, 10.30 AM IST
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High valuation and a lack of visibility of near-term earnings’ growth have made equities unattractive, at least in the short term. It is quite clear that earnings growth in equities has become a little longer term story. As opposed to this, many savvy participants do not perceive grave concerns about debt markets.

Given this situation, investments in hybrid or balanced schemes which offer the best of both worlds — equities and debt— with at least a five-year time horizon must not be ruled out. When equities are volatile, debt markets provide stability to the portfolio’s returns.

Among balanced schemes, SBI Equity Hybrid is one of the most stable performers in the long term. In the past three- and five-year periods, the scheme has given 8.2 per cent and 10.1 per cent returns, respectively, while its peers in the category have given 5.4 per cent and 7.3 per cent returns, respectively, in the same period.

As regards the scheme’s debt investments, fund managers Dinesh Ahuja and R Srinivasan have given special attentions to quality. The scheme is heavily invested in government and AAA-rated securities which, moderately, offer a certain amount of stability to the portfolio.

With respect to its benchmark index, the scheme has higher exposure to debt securities than its benchmark index. This aggressive exposure shows the conviction of the fund managers. Its equity investments are also spread across good dividend-paying, superior asset-possessing multi cap growth stocks.

Portfolio Change (Past 6 months)
New Entrants Complete Exits Increase in Allocation
Chalet Hotels ICICI Securities Axis Bank
Emami Maruti Suzuki India HDFC
Hero MotoCorp NLC India Relaxo Footwears

Returns (in %)
Period CAGR Return SIP CAGR Return Aggressive Hybrid Fund - AVG CAGR (%)
1 Year 1.15 3.80 -6.34
3 Year 8.24 6.66 4.98
5 Year 10.31 8.54 7.04

Returns Peer Comparison (in %)
Scheme Name 1-Year 3-Year 5-Year
Canara Robeco Equity Hybrid Fund -2.77 7.55 9.31
DSP Equity & Bond Fund -3.67 6.37 9.85
ICICI Prudential Equity & Debt Fund -3.22 6.94 9.29
Source: Accord Fintech, Compiled by ETIG Database

Expert Take
Kaustubh Belapurkar, Director Fund Research, Morningstar India
SBI Equity Hybrid Fund is a well-managed balanced fund. The equity portion is managed as a well-diversified multi-cap portfolio of high growth stocks with a predominant large cap blas. R Srinivasan, who manages the equity portion, is an experienced manager. The fund is suitable for risk averse investors with at least 3-5 years investment horizon.

Also Read

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DSP Equity Fund: fund review

ICICI Prudential Balanced Advantage Fund: Fund Review

Motilal Oswal Midcap 30 Fund: Fund review

SBI Focused Equity Fund: Fund review

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