How SBI Magnum Children's Fund compares with small-cap peers on long-term SIP returns

The SBI Magnum Children's Benefit Fund – Investment Plan is a hybrid mutual fund designed to help parents invest in their child’s long-term financial goals, such as education or marriage. While the name suggests a child-specific fund, it operates much like any diversified hybrid fund, blending equity and debt allocations to balance growth with stability.

In a recent social media post, B. Padmanaban, a Certified Financial Planner, noted that when the SBI Magnum Children’s plan was launched, a detailed benchmarking exercise was carried out to assess its relative performance against the broader small-cap segment. As part of this evaluation, a comprehensive list of small-cap mutual fund schemes available in the market at that time was compiled, representing a broad spectrum of investment styles and risk-return profiles within the small-cap universe.

The historical performance of these small-cap funds was thoroughly analyzed across multiple timeframes — 1-year, 2-year, 3-year, 4-year, and since the inception of the SBI Magnum Children’s Plan. This enabled a clearer understanding of how these small-cap funds had fared under different market cycles, economic conditions, and investment periods.

"When SBI Magnum Children's Investment Plan was launched, a comprehensive list of available small-cap options was compiled. The performance of these small caps was analyzed over various periods: the last 1 year, 2 years, 3 years, 4 years, and since the inception of the plan," Padmanaban wrote on X.

In addition to absolute returns, a Systematic Investment Plan (SIP) return comparison was undertaken. This involved assessing the XIRR (Extended Internal Rate of Return) from regular monthly SIPs in each small-cap fund, alongside the SIP performance of the SBI Magnum Children’s Investment Plan since its inception. This offered a more realistic and investor-centric view, capturing both market volatility and the benefits of rupee-cost averaging over time.

The analysis served as a valuable illustration of how the SBI Magnum Children's Investment Plan stacks up against pure-play small-cap funds — both in terms of long-term wealth creation and risk-adjusted consistency. It also highlighted how a hybrid or thematic fund like the SBI plan, though not a dedicated small-cap fund, could align with or diverge from small-cap trajectories depending on market dynamics and fund management strategies.

However, it is important to stress that this evaluation is intended solely for illustrative and educational purposes. Past performance is not indicative of future results, and fund dynamics — including asset allocation, fund manager strategy, and market conditions — can change over time. Investors are strongly advised to conduct independent research, consult financial advisors, and consider their risk tolerance before making any investment decisions.

Fund Overview

Net Assets (AUM): Rs 3,014.82 crore (as per latest available data)

Expense Ratio: 1.92%

Fund Type: Hybrid (Equity-oriented)

Ideal For: Long-term investors looking to build wealth for children's future needs, especially education

Top Holdings

Thangamayil Jewellery Ltd.

Hatsun Agro Products Ltd.

HDFC Bank Ltd.

Muthoot Finance

Ajax Engineering

Renew Energy Global

Bajaj Finserv

K.P.R. Mill

Sanathan Textiles

Kotak Mahindra Bank

Performance Snapshot

3-Month Returns: -11.47%

6-Month Returns: -8.34%

1-Year Returns: 19.82%

3-Year Returns (CAGR): 18.45%

5-Year Returns: Not available (possibly due to scheme restructure or a shorter track record)

The fund’s recent short-term returns show a dip over 3 to 6 months, likely reflecting broader market volatility or sector-specific corrections in its portfolio. However, its 1-year and 3-year returns remain strong, indicating solid long-term growth potential. The 18.45% CAGR over 3 years reflects consistent medium-term performance despite short-term headwinds.

Expense Consideration
At 1.92%, the fund carries a relatively high expense ratio, typical for actively managed hybrid schemes. Investors should weigh this cost against the fund’s historical performance and consider lower-cost alternatives if expense efficiency is a priority.

Peer comparison

Source: Value Research