SBI Mutual Fund has launched the Magnum Equity Ex-Top 100 Long Short Fund, a specialized investment scheme requiring a minimum entry of Rs 10 lakh. The fund focuses on stocks outside the top 100 by market size and uses derivative hedging to manage market volatility. The NFO period begins August 7, 2026.
SBI Mutual Fund has launched its second offering under the Specialized Investment Fund (SIF) framework, the Magnum Equity Ex-Top 100 Long Short Fund. The New Fund Offer (NFO) for this scheme will be open for subscriptions from August 7, 2026, through August 20, 2026. This fund is primarily aimed at investors looking for a strategy that combines growth-focused equity investments with risk management through derivatives.
The investment strategy is distinct from standard equity mutual funds. The scheme will invest 65% to 100% of its assets in equity and equity-related instruments of companies ranked outside the top 100 by market capitalization. By focusing on this segment, the fund intends to capture growth opportunities in mid-sized and smaller companies that may be less covered by institutional investors than the top 100 companies. To manage the inherent volatility often found in these stocks, the fund will use derivative strategies, specifically taking limited short positions to hedge against potential market downturns.
This fund is part of the SIF framework, which sets it apart from traditional mutual fund products available to retail investors. A key feature is the high entry barrier, with a minimum investment requirement of Rs 10 lakh for new investors. This structure is typically designed for high-net-worth individuals and institutional investors who are comfortable with the risks associated with more complex, non-traditional strategies.
Investors should be aware of the specific risks involved. While the "long-short" strategy aims to reduce the impact of market swings, the use of derivatives involves risks, including the potential for losses if the derivative positions do not perform as expected. Additionally, the fund’s heavy tilt toward companies outside the top 100 means the portfolio may be more sensitive to market corrections than a large-cap focused fund. The fund will be managed by Gaurav Mehta, who oversees SBI Mutual Fund’s SIF equity strategies.
For tax purposes, the fund is treated as an equity-oriented scheme. Gains held for more than 12 months are subject to a long-term capital gains tax rate of 12.5% on gains exceeding Rs 1.25 lakh in a financial year. Investors should also note the exit load structure, which includes a 1% charge for any redemptions or switches made within three months from the date of allotment. The key monitorable for potential investors will be the fund manager’s ability to balance the growth potential of the non-top-100 stocks with the defensive hedging provided by the short positions in volatile market conditions.