Dear Investor,

The year 2004-05 has been a year of successful events for us with our schemes receiving a warm response from our investors. The new year has begun on positive note too. You will be pleased to know that the SBI Bluechip Fund has mobilized over Rs 2800 Crores from more than 7,30,000 investors. This is a record for any open ended equity scheme in the history of the Indian mutual fund industry and we would like to heartily thank all the investors who have reposed their faith on us. Needless to say, this would not have been possible without the support of the distribution fraternity.

The sensex has crossed record levels with the economy being on a robust growth path and it is our belief that the year 2006 will be a very good year for India. Mutual Funds now are becoming a preferred investment destination for the investors in India as fund houses offer not only the expertise in managing funds but also a host of other services.

It is now the season for all of us to make suitable investments to get tax benefits. The Central Board of Direct Taxes clarified that all investments in equity-linked savings schemes (ELSS) made on or after April 1, 2005 are eligible for tax breaks under Section 80C of the Income Tax Act. This makes the ELS schemes more attractive to investors as they would get equity linked returns as well as tax exemption upto Rs 1 Lakh.

We take this opportunity to offer one of our top performing schemes - Magnum Taxgain Scheme, an Equity Linked Savings Scheme to our investors. This scheme has been ranked CPR 1 by CRISIL, which indicates ‘Very Good Performance. Magnum Taxgain Scheme has recently bagged two Gold Awards for its performance in the 1 year and 3 year category in the ICRA Online Awards out of all the existing ELSS schemes in the industry. We have consistently given dividends to our investors and the last dividend given for Magnum Taxgain was 102% in June 2005. Please read the offer document of the scheme carefully before investing.

To cater to the information, investment and servicing needs of our valuable investors we have a large and dedicated sales force located across the country in Investor Service Centers and Investor Service Desks. Please feel free to call us in these locations or on our toll free number 1600 22 3040 for any assistance. With best wishes for the New Year.

Deepak Chawla

Managing Director