SBI Monthly Income Plan

The falling interest rates in the traditional deposit investments in banks and post offices have drawn the conservative investors towards Mutual Funds for a regular income. Moreover, the market-linked asset portfolio with the primary aim of earning inflation-beating returns well above the traditional makes Mutual Funds attractive.

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Accordingly, the Magnum Income Fund and the Conservative Hybrid Fund from the SBI Funds Management Ltd fit the bill for all individuals. Let us explore the two funds here in detail. 

SBI Monthly Income Plan 

The retirees, homemakers, and first-time investors in Mutual Funds have a common goal – to earn consistent monthly returns to beat inflation and secure the investment. The SBI Magnum Income Fund and SBI Conservative Hybrid Fund have portfolios comprising mainly of debt assets with a marginal equity exposure for stable growth.

However, market volatility affects the delivery of a steady income. Consequently, the best option is a suitable SWP (Systematic Withdrawal Plan) for a stable monthly income stream regardless of the fund’s performance and the disbursal surplus. 

The following grid illustrates the critical highlights and salient features of the SBI Monthly Income Plan. 

Scheme Parameters  SBI Magnum Income Fund SBI Conservative Hybrid Fund
Category Debt - Medium to long-duration fund Hybrid 
Type  Open-ended Open-ended
Launch Date 25 November 1998 9 April 2001
Available Plan  Regular and direct Regular and direct
Available Options 
  • Dividend 

  • Growth

  • Dividend

  • Growth

Benchmark  Nifty medium to long-duration Debt index NIFTY 50 hybrid Composite Debt 15:85 Index
Load Structure Entry Load: NA Exit Load: 10% within one year and 1% for remaining Entry Load: NA Exit Load: 10% within one year and 1% for remaining
Minimum Amount Rs.5000 and multiples of Rs.1 SIP: Rs.500 to Rs.5000 Rs.5000 and multiples of Rs.1 SIP: Rs.500 to Rs.5000
Risk Moderately  high Moderately high 
AUM (31 March 2022) Rs.1667.19 Cr  Rs.5795.54 Cr
NAV (6  May 2022) Rs.55.87 (Growth) Rs. 52.63 (Growth)
Fund Manager Mr. Dinesh Ahuja  Mr. Saurabh Pant Ms. Manasi Saleja  Mr. Mohit Jain

SBI Monthly Income Plan – Highlights

  1. Fund Type

    • SBI Magnum Income Fund: An open-ended medium to long-term scheme mainly investing in instruments with a Macaulay duration of 4 to 7 years. The portfolio bears a relatively high-interest rate and credit risk.

    • SBI Conservative Hybrid Fund: An open-ended hybrid scheme where debt instruments dominate the portfolio composition. 

  2. Product Labelling

    • SBI Magnum Income Fund: The scheme suits investors searching for:

      • Regular income for medium to long term horizons

      • Investments primarily in debt and money market instruments

    • SBI Conservative Hybrid Fund: The product suits investors looking for the following:

      • Regular income with capital growth

      • The primary investment is in debt and money market instruments, while the second is in equity and equity-related instruments. 

  3. Investment Objective

    • SBI Magnum Income Fund:  The scheme offers investors the opportunity to generate a regular and steady income through primary asset allocation in debt and money market instruments. The fund manager focuses on investments with a Macaulay duration of 4 to 7 years. However, the scheme does not guarantee returns as there is no assurance of achieving the objectives.

    • SBI Conservative Hybrid Fund: The fund manager focuses on providing the investors an opportunity to invest predominantly in debt and money market instruments. On the other hand, the second investments are in equity and equity-related instruments. However, there are no guaranteed returns as there is no assurance of achieving the objectives.  

SBI Monthly Income Plan – Eligibility

After learning about the SBI Monthly Income Plan fundamentals, you must consult the offer document and satisfy that you are eligible to invest. Accordingly, the below listed qualified investors are only indicative. 

  1. SBI Magnum Income Fund and SBI Conservative Hybrid Fund

    • Resident Indian adult individuals in a single or joint capacity with a maximum of three members

    • NRI’s, PIO, and OIC

    • Minors with parents or legal guardian

    • Karta, on behalf of the HUF

    • Companies, Corporate bodies, Public Sector Undertakings 

    • Partnership firms 

    • Registered societies, Association of persons, or body of individuals

    • Private, religious, endowments, and charitable trusts 

    • Banks and other financial institutions

    • Army, Navy, Air Force, and other Para-military Organizations

    • Foreign Institutional and Portfolio Investors as also International Multilateral Agencies permitted by the Government and RBI  

    • Other Mutual Fund Schemes, including SBI Mutual Fund Management Ltd. 

    The investment objectives of the two plans vary, but the common goal is to ensure a steady income flow through prudent investments and portfolio composition. Since you have chosen to invest in Mutual Funds, you are not short on the professional expertise of the fund managers focusing on maximizing returns. 

    Accordingly, the following qualifications to invest:

  2. SBI Magnum Income Fund

    • Retirees, homemakers, and first-time investors looking for  inflation-beating steady income

    • Investments dominating the debt instrument

    • The investment horizon of 4 to 7 years

  3. SBI Conservative Hybrid Fund

    • Conservative investors are not averse to marginal equity exposure  after investing mainly in debt instruments

    • While the debt investment provides the fixed return component, the equity investment provides higher yields for a stable income. 

SBI Monthly Income Plan – Investment Strategy

The fund manager plays a crucial role in devising the investment strategy in harmony with the scheme’s objectives. Therefore, the main focus is on maximizing returns for the investors and meeting their aspirations for a regular income stream. 

Let us study the strategies individually.

  1. SBI Magnum Income Fund

    After continuous evaluation, the fund manager considers the investment’s economic factors and market dynamics. Accordingly, the entire asset allocation is in debt and money market instruments for risk-adjusted returns through active management. In addition, the fund manager adheres to the Macaulay Duration of 4 to 7 years defined in the scheme objective. 

    The grids below represent the SBI Magnum Income Fund’s asset allocation on two critical factors. 

    SBI Magnum Income Fund – Asset Allocation 
    Instruments  Minimum  Maximum  Risk Profile 
    Debt  0% 100% Low to medium 
    REITs and InVITs  0%  10% Medium to high 
    Securitized Debt  0% 20% Medium to high

    SBI Magnum Income Fund – Sector Based Asset Allocation
    Industry  Percentage of Net Asset 
    Financial services  34.74%
    Sovereign  33.47%
    Construction  7.89%
    Services  6.70%
    Power  6.56%
    Automobile  4.25%
    Metals  2.72%
    Cash, Cash Equivalents, and Others  3.67%
    Grand Total  100.00%
  2. SBI Conservative Hybrid Fund

    The scheme’s fund manager allocates assets in a mix of debt, equity, and money market instruments in harmony with the fund objectives. Market dynamics, macro-economic factors, and issuer-specific factors help evaluate the portfolio composition to earn maximum returns for the investors. As a result, the equity cap is 25%. 

    The grids below represent the SBI Conservative Hybrid Fund’s asset allocation on two critical factors. 

    SBI Conservative Hybrid Fund – Asset Allocation 
    Instruments  Minimum  Maximum  Risk Profile 
    Debt  75% 90% Low to medium 
    REITs and InVITs  0%  10% Medium to high 
    Equity and Related   10% 25% Medium to high

    SBI Conservative Hybrid Fund – Sector Based Asset Allocation
    Industry  Percentage of Net Asset 
    Financial Services  40.89%
    Sovereign  16.88%
    Construction  5.87%
    Services  4.39%
    Consumer Goods  3.94%
    Automobile  3.55%
    Telecom  2.83%
    Textiles  1.74%
    Power  1.62%
    Chemicals  1.61%
    Consumer Services  1.49%
    Cement and Cement Products  1.12%
    Miscellaneous 2.28/%
    Cash, Cash Equivalents, and Others  11.79%
    Grand Total  100.00%

About SBI Funds Management

The Asset Management Company (AMC) is a joint venture between SBI and Amundi of France. While the former is the largest Indian holding 63% of the stake in the company, the latter provides strategic support by introducing international best practices and standards. 

The AMC has been operating in India for over thirty years, actively endeavoring to outperform the benchmarks through well-researched and focused investments in the equity market. 

In Conclusion

Mutual Funds have opened up the Indian investment market with consistent inflation-adjusted returns compared to the traditional deposit schemes. Moreover, the investments reap higher yields from market instruments providing flexibility and liquidity that makes it an attractive vehicle. 

The SBI MF Magnum Income Fund and Conservative Hybrid Fund are two options eminently suited to conservative investors searching for a steady income to supplement their regular income.

FAQ's

  • How can you redeem the SBI Mutual Fund Monthly Income Plan units?

    You can redeem the units fully or partially in the SBI Monthly Income Plans on any business day, receiving the value based on the applicable NAV. 
  • What is the CAGR in the SBI Monthly Income Plans under discussion?

    The CAGR of Magnum Income Fund since its inception on 25 November 1988 is 7.7%. On the other hand, the CAGR of the Conservative Hybrid Fund since its inception on 9 April 2001 is 8.28%. 
  • What do you understand by debt funds as the primary investment vehicle in SBI Monthly Income Plans?

    Debt funds are investment vehicles where the primary asset allocation in fixed income securities like government securities, treasury bills, corporate bonds, and other money market instruments has a lower risk profile.
  • Is any lock-in period applied to SBI Monthly Income Plans?

    Mutual fund lock-in signifies the period you have to stay invested in a fund without the facility to redeem, making your investment illiquid. On the other hand, there is no lock-in provision for SBI Monthly Income Plan units. 
  • What is a SIP mandate for SBI Monthly Income Plans?

    You must submit the mandate if you choose the SIP route for investing in the SBI Monthly Income Plan. The SIP mandate allows recovery of the defined investment amount from your account per your selected period.
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SBI Monthly Income Plan Reviews & Ratings

4.3 / 5 (Based on 22 Reviews)
(Showing Newest 10 reviews)
Kishore
Dalpur, September 23, 2016
Traditional Policy
The sbi life provided me the best traditional insurance policy in very low premiums. The investment is low but the paybacks are high. Coverage is good and claims can be cleared easily by taking executives and staff members services.
Bhupesh
Mumbai, August 24, 2016
Trustable
Friend of mine shown me a very fine insurance policy, after seeing the great benefits of the plan i purchased the traditional insurance plan from sbi life insurance. Policy coverage is ~90% and the premium is less. Easy renewals through online portal service which can be handled by anyone.
Tarun
Pune, April 21, 2016
Awesome
I own sbi insurance traditional plan. Plan is good and premium is low. Policy coverage is high and payback returns too. Claiming amount is Rs.39 L. Service is fast like super sonic. The daily updates are mailed to me time to time. Overall, perfect policy plan.
Umakant
Ludhiana, April 21, 2016
Perfect
My sbi life traditional policy plan is good in services. The policy coverage is good ~89% and the premiums are low. Claiming process is easy due to fast service provided by the executives and the staff members. The payback amount is ~Rs.39 L. I like the terms and conditions of the policy plan.
Gurpreet
Mohali, April 21, 2016
Great Policy
The policy i have is sbi traditional policy plan which is very good and the premiums are low with high in policy coverage 91%. The claiming part is very easy because the service is very fast with good response from the staff members. Nice future investment with tax savings.
Yuvraj
Kota, April 21, 2016
Fantastic Plan
I finally buy sbi life insurance traditional policy plan. Policy covers almost all cases and the amount of returns is around 45 L. Service provided is fast and on time. Good future investment which save taxes. Nice services facilitate by executives and staff members.
Seraj
Varanasi, March 02, 2016
i want this
it's good opertuunit for sbi cousmer
Kamal
Lucknow, February 25, 2016
above average.
I have traditional policy plan from sbi life insurance. The policy is provides good coverage with low premiums. Claims are around Rs.19 lakhs. Service always on time. Satisfactory policy plan, nice work.
Plan Name: eWealth Insurance
Agent Code: BBE04411
Amit
Delhi, February 24, 2016
Perfect Plan.
I own sbi life insurance traditional plan. Policy coverage is good returns are better. Claims are high and premiums are low. Services are fast and on time. I must say power pack policy. I'm happy and fully satisfied with it.
Plan Name: eWealth Insurance
Agent Code: BPW00249
CHIRAG
Indore, February 20, 2016
Service is good.
My traditional policy plan is with sbi life insurance. Policy coverage is fine but the premium is bit high. Claims are high ~Rs.26 lakhs. Service is the best and always on time, even daily updates are mailed to me. Okay policy plan.
Plan Name: eWealth Insurance
Agent Code: BBE04737
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