SBI Long Term Equity Fund

The SBI Long Term Equity Fund is a diversified Equity Linked Saving Scheme (ELSS), a type of mutual fund that offers tax benefits to investors. Formerly known as the SBI Magnum Taxgain Scheme, it was launched by SBI Mutual Fund on 31st March 1993.

The SBI Long Term Equity Fund distributes the majority of its investments across the financial services, IT, automobile and auto components, capital goods, healthcare, and oil, gas & consumable fuels sectors. It is managed by Dinesh Balachandran.

The scheme’s objective is to provide investment benefits by investing in a diverse portfolio of equity shares while offering tax deductions under section 80C of the Income Tax Act, 1961. The scheme also intends to distribute income periodically based on the available surplus.

The SBI Long Term Equity Fund invests at least 80% of its assets in equities, cumulative convertible preference shares, fully convertible debentures, and bonds. It has the flexibility to invest up to 20% of its assets in money market instruments. The scheme requires a 3-year statutory lock-in to avail of section 80C tax benefits.

Pros & Cons

How to invest in SBI Long Term Equity Fund?

5paisa makes it simple and convenient for users to invest in the SBI Long Term Equity Fund Direct-Growth. The procedure is straightforward, can be finished quickly, and does not include any paperwork at any point. Invest a few minutes in carrying out the steps listed below:

Step 1: Log in to your 5Paisa Account. If you do not have one, click the link to register and create a new 5Paisa account in 3 easy steps. Alternatively, you can download the 5Paisa app on your smartphone for Android or IOS and log in from your device. 

Step 2: Search for the SBI Mutual Fund scheme that you want to invest in

Step 3: Select the option that is apt for your requirement and risk appetite

Step 4: Select the investment type – SIP (Systematic Investment Plan) or Lumpsum 

Step 5: Input the amount that you’d like to invest and proceed with payment by clicking on the ‘Invest Now’ button

That’s it! This sums up the investment process. Once your payment is successful, you can see the SBI Mutual Fund reflected in your 5Paisa account in 3-4 working days. If you have selected the SIP option, the chosen amount will get deducted every month starting from the date you have made the payment. 

What is the expense ratio of the SBI Long Term Equity Fund?

When referring to the SBI Long Term Equity Fund Direct-Growth or any other mutual fund, the word “Expense Ratio” refers to the fund’s annual operating expenses as a percentage of its total assets, which can impact a scheme’s returns for investors. A lower expense ratio usually means the fund is less costly and may generate higher returns for the investors.

Who should invest in SBI Long Term Equity Fund?

The SBI Long Term Equity Fund is suitable for investors having a long-term investment horizon and seeking capital appreciation through exposure to equities. The scheme’s portfolio consists predominantly of equity shares that provide an opportunity for the investor to participate in the stock market.

Furthermore, investments made in the scheme qualify for a tax deduction under section 80C of the Income Tax Act, 1961, making it a tax-efficient investment option.

The scheme is a respected investment option in the Equity-Linked Saving Scheme (ELSS) category, recognised for its consistent performance and cost-effectiveness. The scheme has outperformed the S&P BSE 500 TRI Index and its category average over the past three years. In addition, it has a notable track record with a 13.7% Compound Annual Growth Rate (CAGR) since inception, representing its annualised growth rate over time.

The SBI Long Term Equity Fund is appropriate for investors with a long-term investment horizon of at least 3 years and a very high tolerance for risk. However, if your investment goals do not align with these characteristics, it may be more suitable to consider alternative investment options.

What are the benefits of investing in the SBI Long Term Equity Fund?

● Investing in the SBI Long Term Equity Fund offers tax deductions of up to 1.5 lakhs yearly under section 80C, making it a compelling investment option for those seeking both capital appreciation and tax benefits.
● The scheme has a mandatory lock-in period of 3 years, promoting long-term investing and discouraging short-term speculative behaviour.
● The SBI Long Term Equity Fund has outperformed its benchmark and category average for the last 3 years.
● The scheme invests in a diversified portfolio of stocks, reducing the risk associated with investing in individual stocks.
● Its large Assets Under Management (AUM) represent a significant level of investment interest, contributing to the scheme’s stability, lower operational costs, and a positive perception among investors.
● The absence of an exit load in the SBI Long Term Equity Fund allows investors to redeem their units without incurring additional charges.