SBI MAGNUM TAXGAIN tax-saving fund has lagged behind its peers across different time periods. Much of this stems from its preferred large-cap tilt compared to peers, who have benefited from a higher mid-cap exposure.

Its portfolio average market capitalisation is lower than its category average by `20,000 crore. The fund has recently been handed over to a new fund manager who maintains a strict value bias and insists on higher margin of safety in his stock picks. Besides, the portfolio takes healthy exposure in its top bets as the fund manager prefers compa nies that provide cushion against a downside.

SBI MAGNUM TAXGAIN approach may lead to sharp bouts of underperformance, but may reward conservative investors in the long term.