SBI: Magnum Institutional Income Fund

Investment Objective

The investment objective of the scheme will be to provide attractive returns to the Magnum holders either through periodic dividends or through capital appreciation through an actively managed portfolio of debt and money market instruments. Income may be generated through the receipt of coupon payments, the amortization of the discount on the debt instruments, receipt of dividends or purchase and sale of securities in the underlying portfolio.

Scheme Highlights

1.Plan for investment Savings Plan; Growth and Dividend Options.

2.The scheme to invest only in debt instruments such as Government Securities, Corporate Bonds and Debentures and Money Market instruments.For the Savings Plan, investment in Corporate Bonds and Debentures will be in securities with maturity not exceeding 5 years.

3.The Dividend option under the Savings Plan will endeavour to declare dividends on a daily basis while the Dividend option under the Investment Plan will endeavour to declare dividends on a quarterly basis subject to the availability of distributable surplus and at the discretion of the Fund Manager. The returns under the Growth Plan will be through capital appreciation only.

4.Daily NAV. NAV will be disclosed on weekends and holidays in the case of the Savings Plan.

5.Switchover facility will be available for switchover between various options and also between this scheme and other schemes of the Fund at NAV related prices.

6.Tax benefits:Tax benefits to the unit holders: The tax benefits that will be available to the scheme investors will be as per the prevailing laws thus:Tax benefit is available under sections 48 & 112 on capital gains for resident Indians. The Magnum holders will have the option to pay the long term capital gains tax @ 10% (plus applicable surcharge) without the cost inflation index benefit or @ 20% (plus applicable surcharge) with the cost inflation index benefit, whichever is more beneficial. I)Dividends distributed under the scheme will be subject to a dividend distribution tax of 12.5% (plus applicable surcharge) and will be tax free in the hands of the investor.ii)Magnums held under this scheme will not be liable to wealth tax and gift tax.

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