In this edition of the fund performance report, we look at SBI Equity Hybrid Fund. Launched in Dec 1995, the scheme has assets worth Rs. 50,266 Crores which is the largest among actively managed equity funds. Only SBI LIquid Fund, HDFC Liquid, SBI ETF Nifty and SBI ETF Sensex have higher AUMs as of May 31st 2022!
Disclaimer: Fund performance reports present return and risk analysis of a fund with representative benchmarks and not investment recommendations. It must be expressly understood that the data below reflect only past performance and is in no way an indication of future performance. Our investment recommendations can be found here: Handpicked List of Mutual Funds (PlumbLine).
The Market Cap allocation history of the SBI Equity Hybrid Fund is shown below. The “others” represents bonds or cash components. The fund has reduced its mid cap allocation since early 2019 perhaps because of the burgeoning AUM.
We find out how consistently the Fund has performed wrt Nifty 100 TRI and CRISIL 65:35 Aggressive Hybrid Index. We will use three metrics to analyze performance consistency versus benchmarks. Analysis such as this can be found for 350+ equity funds in our monthly mutual fund screener.
1 Rolling return outperformance consistency: the fund returns are compared with category benchmark returns over every possible 3Y,4Y, and 5Y period. Higher the outperformance consistency, the better. Suppose 876 fund returns were compared with 876 benchmark returns, and the fund has beaten the benchmark 675 times. The consistency score will be 675/876 ~ 77%.
Three years
| Metric | Crisil6535 | Nifty 100 TRI |
| No of rolling return entries Index (3 Years) | 1577 | 1577 |
| No of rolling return entries Fund (3 years) | 1577 | 1577 |
| No of times the fund has outperformed the index (3 years) | 1314 | 994 |
| rolling return outperformance Consistency Score (3 years) | 83% | 63% |
Four years
| Metric | Crisil6535 | Nifty 100 TRI |
| No of rolling return entries Index (4 Years) | 1333 | 1333 |
| No of rolling return entries Fund (4 years) | 1333 | 1333 |
| No of times the fund has outperformed the index (4 years) | 1246 | 883 |
| rolling return outperformance Consistency Score (4 years) | 93% | 66% |
Five years
| Metric | Crisil6535 | Nifty 100 TRI |
| No of rolling return entries Index (5 Years) | 1085 | 1085 |
| No of rolling return entries Fund (5 years) | 1085 | 1085 |
| No of times the fund has outperformed the index (5 years) | 980 | 726 |
| rolling return outperformance Consistency Score (5 years) | 90% | 67% |
That is reasonably consistent outperformance.
2 Upside performance consistency over every possible 3Y,4Y, 5Y: Higher the better. A score of 70% means, 7 out of 10 times, the Fund performed better than the category benchmark when the benchmark was moving up. This is a measure of reward. It is computed from rolling upside capture data (see link below).
| Metric | Crisil6535 | Nifty 100 TRI |
| upside performance consistency (3 years) | 53% | 35% |
| upside performance consistency (4 years) | 64% | 32% |
| upside performance consistency (5 years) | 59% | 33% |
The fund has reasonable upside performance wrt the hybrid index but not wrt Nifty 100.
3 Downside performance consistency over every possible 3Y,4Y, 5Y. Higher, the better. A score of 60% means, 6 out of 10 times, the Fund performed better than the category benchmark when the benchmark was moving down. This is a measure of risk protection. It is computed from rolling downside capture data. Read more: An introduction to Downside and Upside Capture Ratios.
| Metric | Crisil6535 | Nifty 100 TRI |
| downside protection consistency (3 years) | 54% | 95% |
| downside protection consistency (4 years) | 59% | 100% |
| downside protection consistency (5 years) | 59% | 100% |
The fund has reasonable downside protection wrt the hybrid index. It is not surprising the fund does better wrt Nifty 100 since this index does not hold any bonds.
The trailing return performance is also reasonable considering its bloated AUM.
Versus CRISIL 65:35 Hybrid Index
| Trailing Returns | Crisil6535 | SBI Equity Hybrid Fund |
| 1Y | 4.5% | 7.1% |
| 2Y | 21.3% | 23.9% |
| 3Y | 12.1% | 12.7% |
| 4Y | 11.9% | 12.4% |
| 5Y | 11.1% | 12.5% |
Versus Nifty 100 TRI
| Trailing Returns | Nifty 100 TRI | SBI Equity Hybrid Fund |
| 1Y | 6.2% | 7.1% |
| 2Y | 30.9% | 23.9% |
| 3Y | 12.7% | 12.7% |
| 4Y | 12.6% | 12.4% |
| 5Y | 12.3% | 12.5% |
In summary, SBI Equity Hybrid Fund has a reasonable performance consistency record. Existing investors can continue with the fund. New investors looking for an aggressive hybrid fund can perhaps consider an alternative with lower AUM like ICICI Prudential Equity & Debt Fund.
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation for promoting unbiased, commission-free investment advice.
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