What are Blue Chip Mutual Funds? Learn their Growth, Best Direct Plans, Returns & Review
In the ever-evolving world of investments, one concept has remained a steadfast beacon of reliability and resilience: Blue Chip. These renowned corporations, household names, and industry leaders have stood the test of time, weathering economic storms and consistently delivering value to their investors.
Enter Blue Chip Mutual Funds, a gateway to a world of stability and steady growth within the dynamic realm of mutual fund investments. If you’re an investor seeking a balance between reliability and returns, this blog is your comprehensive guide to understanding the allure of Blue Chip Mutual Funds.
Blue Chip Funds Meaning
Blue Chip Mutual Funds are investment vehicles that pool money from multiple investors to purchase shares in a diversified portfolio of Blue Chip Stocks. These blue chip investment are professionally managed, aiming to provide investors with exposure to well-established, financially stable companies.
What are the Key Characteristics of Blue Chip Mutual Funds?
The key characteristics of blue chip mutual funds are:
- Focus on Blue Chip Stocks: Blue Chip Mutual Funds predominantly invest in Blue Chip Stocks, which represent shares of large, well-established, and financially stable companies.
- Diversification: These funds are structured to offer diversification by holding a mix of Blue Chip Stocks from various sectors and industries.
- Professional Management: Blue Chip investment are managed by seasoned fund managers who make investment decisions on behalf of investors. These professionals conduct thorough research, assess market conditions, and select the most promising Blue Chip Stocks for the fund’s portfolio.
- Dividend Income: Many Bluechip fund distribute regular dividends to their shareholders. Bluechip Mutual Funds often pass on these dividends to their investors, making them an attractive choice for income-oriented individuals.
- Cost-Efficiency: Blue Chip Mutual Funds typically maintain lower expense ratios compared to actively managed funds. This cost-efficiency can translate into a more favourable investment experience.
How Do Bluechip Mutual Funds Work?
Blue Chip Mutual Funds operates by gathering funds from individual investors and using those funds to buy shares of Blue Chip Stocks. Fund managers make investment decisions on behalf of investors, selecting a mix of high-quality stocks to create a diversified portfolio. Investors own shares in the mutual fund, which represents a portion of the underlying Blue Chip stocks.
What are the Types of Assets Blue Chip Mutual Funds Invest In?
These Mutual Funds primarily invest in bluechip Stocks, which are known for their stability and consistent performance. However, these funds may also allocate a portion of their assets to other assets like bonds or cash equivalents to manage risk and achieve diversification.
Top Blue Chip Mutual Funds India 2024
Here is the list of the best blue chip mutual funds in India:
| Top Blue Chip Mutual Funds | AUM (In cr.) | CAGR 3Y (%) | Expense Ratio (%) | 3Y Average Annual Rolling Returns – 1Y (%) | Minimum SIP (In Rs.) |
| ICICI Pru Bluechip Fund | 49,837.78 | 19.98 | 0.85 | 25.15 | 500.00 |
| SBI BlueChip Fund | 43,272.98 | 14.08 | 0.86 | 23.61 | 5,000.00 |
| Mirae Asset Large Cap Fund | 37,903.96 | 13.34 | 0.54 | 21.44 | 0.00 |
| Axis Bluechip Fund | 32,675.27 | 11.02 | 0.66 | 16.41 | 100.00 |
| Canara Rob Bluechip Equity Fund | 11,823.30 | 15.33 | 0.51 | 21.57 | 0.00 |
| Kotak Bluechip Fund | 7,679.25 | 15.88 | 0.59 | 23.21 | 100.00 |
| Franklin India Bluechip Fund | 7,602.07 | 12.82 | 1.12 | 22.72 | 500.00 |
| Tata Large Cap Fund | 1,967.56 | 16.53 | 1.15 | 24.26 | 150.00 |
| Baroda BNP Paribas Large Cap Fund | 1,806.39 | 17.87 | 0.91 | 21.54 | 1,500.00 |
| HSBC Large Cap Fund | 1,706.01 | 14.78 | 1.21 | 20.77 | 500.00 |
Note: The list of the best bluechip mutual funds is dated 13th March 2024.
Details of top 3 blue chip mutual funds
ICICI Pru Bluechip Fund
Managed by ICICI Prudential Asset Management Company Ltd, It is a leading AMC in the country. It is also a joint venture between ICICI Bank and Prudential Plc, one of the UK’s largest players in the financial services sectors. Here are key details of the ICICI Pru Bluechip Fund:
- The fund has an expense ratio of 0.85%.
- The Net Asset Value (NAV) of the fund is ₹101.99.
- The benchmark index for the fund is NIFTY 100 – TRI
ICICI Prudential Asset Management Company, established in 1993, is one of India’s premier fund houses with a rich legacy of over two decades in asset management. However, as with any investment, conducting thorough research and considering your financial objectives before investing in the ICICI Pru Bluechip Fund ensures it aligns with your investment strategy for optimal portfolio enhancement.
SBI BlueChip Fund
The SBI Blue Chip Fund – Direct Plan – Growth is a bluechip equity fund managed by BI Funds Management Ltd. (SBIFML). They are a Joint Venture between SBI and AMUNDI (France), one of the world’s leading fund management companies., SBI currently holds a 63% stake in SBIFMPL. Here are the key details of the SBI BlueChip Direct Fund:
- The NAV of the SBI BlueChip Fund is ₹84.73.
- The SBI BlueChip Fund returns in the last 1 year equals 28.09%.
- The expense ratio of the fund is 0.86%.
- The benchmark index for the fund is S&P BSE 100 – TRI.
For those considering investing in SBI Bluechip Fund, it’s noteworthy SBI’s long-standing heritage and expertise in the financial sector backs the legivility of this. However, before investing in the SBI Bluechip Fund, it’s crucial to assess your financial goals, risk tolerance, and the fund’s alignment with your investment strategy, ensuring it complements your portfolio effectively.
Mirae Asset Large Cap Fund
Mirae Asset Financial Group manages the fund and is one of the key players in the Asian financial market. Its asset management wing, the Mirae Asset Global Investments, commenced operation in 1997 and has expanded its business globally in a relatively short span of time. Here are the key details of the Mirae Asset Large Cap Fund:
- The NAV of the fund is ₹105.22.
- The fund has an expense ratio of 0.54%.
- The benchmark index for the fund is NIFTY 100 – TRI.
With assets managed in continents, it focuses on creating long-term value. In this regard, when evaluating the Mirae Asset Large Cap Fund, investors must assess how this fund fits into their investment strategies, ensuring that it correlates with their financial goals and risk tolerance to capture Mirae Asset’s expertise and innovation in managing assets.
Bluechip Vs Large Cap Funds
| Aspect | Bluechip Funds | Large Cap Funds |
| Definition | Focus on investing in companies with a reputation for quality, reliability, and the ability to operate profitably in good and bad times, often considered market leaders. | Invest primarily in companies with large market capitalisation, regardless of their industry leadership or long-term performance history. |
| Investment Focus | Invest in well-established companies known for their stability, reliability, and solid financial foundations. | Invest in the largest companies by market capitalisation, which are not necessarily the most stable or well-known brands. |
| Risk Profile | Generally considered to have a lower risk due to the stability and established nature of the companies in their portfolios. | Risk can vary; while large-cap companies are usually more stable than smaller companies, the fund’s performance is closely tied to the market’s overall movement. |
| Returns Potential | Potential for steady, reliable returns over time, reflecting the stable earnings and growth of blue-chip companies. | Potential for high returns, especially in bullish markets, as large-cap stocks often lead market rallies. |
| Ideal For | Investors who are looking for stability and lower risk in their investment, with a preference for steady growth and possibly dividend income. | Investors seeking exposure to the country’s largest companies are willing to accept moderate risk for potentially higher returns. |
| Diversification | It may offer less diversification within the equity segment since it focuses on a select group of companies with similar characteristics. | Often provides broader diversification across various sectors represented by the top market cap companies. |
| Examples | Funds that specifically label themselves as investing in “blue-chip” stocks, like certain mutual funds named after “blue-chip” indices. | Funds that target the top segment of the market by capitalisation, such as those tracking the S&P 500 or similar large-cap indices. |
Factors to Consider When Investing in Bluechip Mutual Funds
When evaluating a Bluechip Fund for investment, it’s important to consider various aspects:
- Historical Performance: The fund’s past performance across diverse market conditions can offer insights into its ability to consistently generate returns.
- Expense Ratio: This is a measure of the fund’s operational costs as a percentage of its assets, affecting net returns. Lower expense ratios are generally more beneficial for investors.
- Fund Manager Experience: The experience and track record of the fund manager in managing investments, particularly in bluechip stocks, is crucial. A seasoned manager can significantly influence the fund’s success.
- Portfolio Composition: A well-diversified portfolio of established companies with solid financial health is indicative of a robust bluechip fund.
- Dividend Yield: For those seeking regular income from their investments, the dividend yield of the fund can be a critical factor.
- Risk Measures: Tools like standard deviation and beta help assess the fund’s volatility and risk relative to the broader market.
- Tax Implications: The tax impact on returns is an important consideration, as it affects the overall investment efficiency.
- Exit Loads: Fees charged for withdrawing investments within a certain period can reduce the total returns. Consequently, making it an important factor to consider.
What are the Benefits of Investing in Bluechip Mutual Funds?
Blue Chip Mutual Funds offer a range of advantages that make them an appealing choice for many investors. Let’s explore the benefits associated with these funds:
- Safety and Stability: Blue Chip Funds typically invest in well-established, financially stable, and reputable companies. This focus on quality assets provides a level of safety and stability in your investment portfolio, even during market fluctuations.
- Consistent Returns: These funds aim to provide investors with consistent returns over time. By investing in companies with strong track records, best Blue Chip Fund seeks to deliver steady and reliable performance. This makes them suitable for long-term goals like retirement planning.
- Lower Risk Compared to Other Mutual Funds: Blue Chip Mutual Funds are often considered lower in risk compared to other types of mutual funds. Such as small-cap or sector-specific funds. Their investments in large, well-established companies can mitigate the potential for extreme market volatility.
What are the Risks and Considerations When Investing in Blue Chip Mutual Funds?
While these Mutual Funds offer stability and potential for consistent returns, it’s essential to be aware of the risks and considerations associated with these investments. Let’s delve into these aspects to make informed investment decisions:
- Market Risk: Market risk, also known as systematic risk, is the potential for Blue Chip Funds to be affected by broader market fluctuations. Despite their stability, these funds are not immune to market downturns, and their value can decline during bear markets.
- Performance During Economic Downturns: Blue Chip Mutual Funds tend to be resilient during economic downturns. However, their performance can still be impacted. It’s crucial to assess how these funds have historically performed in challenging economic conditions. Also, whether they align with your risk tolerance.
- Expense Ratios and Fees: Investors should consider the expense ratios and fees associated with Blue Chip Mutual Funds. While they are generally lower compared to actively managed funds, these costs can eat into your returns over time. Understanding the fund’s expense structure is vital for long-term profitability.
How to Invest in Blue Chip Mutual Funds?
To start building a solid investment foundation with Blue Chip Mutual Funds, you need to understand how to invest in them effectively. Let’s explore the steps that you need to follow to invest in blue chip mutual funds:
- Research: Begin by researching different Blue Chip Mutual Funds to find the ones that align with your investment goals and risk tolerance.
- Choose a Fund: Select the specific Bluechip Fund(s) you want to invest in based on your research and financial objectives.
- Open an Account: You’ll need to open an investment account with a reputable financial institution or brokerage.
- Fund Your Account: Deposit the amount you intend to invest in the chosen Blue Chip Fund(s).
- Place an Order: Place your investment order, specifying the fund and the amount you wish to invest.
- Monitor and Review: Keep an eye on your investments, reviewing their performance periodically.
Taxation of Best Blue Chip Mutual Funds
The taxation of blue chip mutual funds, like all mutual funds in India, depends on the type of fund (equity or debt-oriented) and the duration of the investment (short-term or long-term).
- Equity-Oriented Funds: Blue chip mutual funds that invest more than 65% of their portfolio in equities are treated as equity-oriented for tax purposes. Short-term capital gains (STCG), from selling the investment before 12 months, are have their tax rate at 15%. Long-term capital gains (LTCG) exceeding ₹1 lakh in a financial year are taxed at 10% without the benefit of indexation.
- Debt-Oriented Funds: If a blue chip fund invests less than 65% in equities, it’s considered debt-oriented. For these, STCGs are added to the investor’s income and taxed according to their income tax slab. LTCGs are taxed at 20% with indexation benefits, which adjusts the purchase price for inflation, effectively reducing the taxable gain.
Who Should Invest in Best Blue Chip Mutual Funds?
Investors considering blue chip mutual funds typically seek stable returns and are inclined towards investing in companies with proven performance records. These funds are suitable for:
- Long-Term Investors: Those looking for wealth accumulation over an extended period. Blue chip funds are considered to have lower volatility compared to other equity funds. Consequently, making them suitable for long-term investment horizons.
- Risk-Averse to Moderate Risk Investors: Individuals who are risk-averse or have a moderate risk appetite might find blue chip funds appealing due to their investment in financially sound and stable companies.
- Seekers of Diversification: Investors aiming to diversify their portfolio across a variety of sectors and industries through companies known for their reliability and strong performance.
- Retirement Planning: Individuals planning for retirement may consider including blue chip mutual funds in their portfolios. Given their potential for steady growth over time.
What are the Online Platforms and Brokerage Firms for Investment?
Now that you’re familiar with the steps to invest in Blue Chip Mutual Funds, let’s explore the online platforms and brokerage firms where you can initiate your investment journey:
- Online Brokerages: Platforms like E*TRADE, Charles Schwab, and Fidelity offer easy access to Blue Chip Mutual Funds. You can create accounts, research funds, and make investments online.
- Robo-Advisors: Robo-advisors like Betterment and Wealthfront use automated algorithms to recommend and manage portfolios that may include Bluechip Fund.
- Mutual Fund Companies: Many mutual fund companies, such as Vanguard and BlackRock, allow you to invest directly in their Blue Chip Funds through their websites or apps.
- Financial Advisors: Consider consulting a financial advisor who can guide you through the investment process. Furthermore, they can recommend suitable Blue Chip Funds based on your financial goals.
Portfolio Diversification with Blue Chip Funds
When considering how to maximize the benefits of Blue Chip Funds in your investment portfolio, it’s important to explore the following two key strategies:
Combining Blue Chip Funds with Other Investments
Portfolio diversification involves spreading your investments across different asset classes and types of funds to reduce risk. When you combine Blue Chip Funds with other investments, you’re essentially creating a mix of assets in your portfolio. This diversification can include bonds, international stocks, small-cap stocks, real estate investment trusts (REIT), or other mutual funds.
Example: Suppose you have investments in Blue Chip Funds, which primarily consist of large cap stocks. However, you’re concerned about market volatility. To diversify, you may also invest in bonds or international funds. If the share market experiences a downturn, your bond or international investments may help cushion the impact on your overall portfolio.
Achieving a Balanced Portfolio
A balanced portfolio is one where your investments are allocated strategically to manage risk and achieve your financial goals. Blue Chip Funds can play a crucial role in balancing your portfolio because experts can consider them less risky. As their investments in well-established, stable companies. By including Blue Chip Funds in your portfolio, you can achieve balance by reducing the overall risk. Additionally, you may also get potentially enhanced returns.
Example: Let’s say you have a portfolio with a mix of investments, including Blue Chip Funds, bonds, and smallcap stocks. Blue Chip Funds provide stability and consistent returns, while bonds offer income and safety. Small-cap stocks have the potential for high growth but come with higher risk. By balancing these investments, you can manage risk while still having the potential for growth.
Tips for Successful Investing in Blue Chip Mutual Funds
Some of the tips for successful investing in Blue Chip MFs are as follows:
- Regular Monitoring of Investments: Keeping a close watch on your investments in Blue Chip Mutual Funds is essential. Regularly assess the fund’s performance, the companies it invests in, and its expense ratio. Adjust your portfolio as necessary to align with your financial objectives and risk tolerance.
- Setting Realistic Financial Goals: Clearly define your financial goals for your investments. Determine whether you’re investing for short-term needs like purchasing a home or long-term goals like retirement. Establishing specific goals will guide your investment decisions and strategies.
- Reinvestment and Compounding Benefits: Consider reinvesting dividends and capital gains earned from your Blue Chip Mutual Funds. Reinvestment allows your returns to compound over time, potentially increasing your overall gains. For long-term investors, this method is very beneficial.
To Wrap It Up…
As we conclude our journey into the world of Blue Chip Mutual Funds, one thing becomes abundantly clear: stability is not just a virtue; it’s an investment strategy. These funds, anchored by the solid foundation of Blue Chip Stocks, offer investors a pathway to consistency and reliability. As well as the potential for long-term growth.
In a financial landscape marked by volatility and uncertainty, Blue Chip Mutual Funds shine as a beacon of hope for those who seek to balance risk and reward. The allure of established, financially stable companies is undeniable, and their historical track record speaks volumes about their resilience.
So, whether you’re a seasoned investor or just beginning your wealth-building journey, you can consider Blue Chip Mutual Funds. As you craft your investment portfolio, remember that diversification and professional management. Furthermore, the pursuit of consistency can be your greatest allies.
FAQs
A Blue Chip Fund is a mutual fund that primarily invests in Blue Chip Stocks. These stocks represent shares of large, well-established, and financially stable companies. The primary objective of Blue Chip Funds is to offer investors exposure to reliability. As well as consistent performance associated with such corporations.
Yes, Blue Chip Funds can generally be good investments. They focus on well-established, financially stable companies, offering stability and the potential for consistent returns. However, suitability depends on your financial goals and risk tolerance.
The “best” Blue Chip stock or fund varies by individual goals and preferences. Some well-known Blue Chip stocks include Apple, Microsoft, and Amazon. The best choice depends on your investment objectives and the overall market conditions.
Experts generally consider investing in Blue Chip Stocks or Funds safer. In comparison to, many other investment options due to the stability of these established companies. However, no investment is entirely risk-free, and it’s essential to assess your risk tolerance and diversify your portfolio to manage risk effectively.
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