Blue Chip Stocks and Blue Chip Funds are widely used in the stock market terminology. You might have also heard about blue-chip funds. Blue Chip funds invest money in the stock of well-established and financially sound companies that have given very good performance in the past.
Blue Chip funds are becoming an attractive investment option. Blue Chip Funds are comparatively safe investment options that can yield returns higher than fixed deposits. If you are new to the stock market and interested to make money with low risk you can opt for blue-chip funds.
What is Blue Chip Fund?
Blue Chip Funds means large-cap funds that invest their corpus in well-established and cash-rich companies. In the Indian context, names like Tata Group, HDFC Bank, SBI, Reliance, Hindustan Unilever, etc are classified as a blue chip.
The primary category of blue chip funds is large cap however as they primarily invest in blue chip companies. Many large-cap mutual funds also include blue chips in their names such as Axis Blue Chip, SBI Blue Chip, ICICI Pru Blue Chip, Kotak Blue Chip, or Franklin Blue Chip.
These types of funds face less volatility. Staying invested in blue chip funds for the long term could help mitigate risks and help generate inflation-beating returns for the long run.
Benefits of Investing in Blue Chip Funds
Blue chip funds offer the following benefits to the investors.
#1 Stable returns
Blue chip companies are typically well-established, financially sound, and have a proven track record of delivering consistent returns over the long term. This makes blue chip funds a relatively safe investment option that can provide stable returns over time.
#2 Diversification
By investing in blue chip funds, investors gain exposure to a diverse range of industries and sectors. This can help reduce the risk of losses that may occur if one industry or sector experiences a downturn.
#3 Long-term growth potential
Many blue-chip companies have a long history of steady growth and innovation. By investing in blue chip funds, investors can potentially benefit from the long-term growth potential of these companies.
#4 Professional management
Blue chip funds are managed by experienced professionals who have a deep understanding of the market and the companies they invest in. This can provide investors with peace of mind knowing that their money is being managed by experts.
#5 Dividend
Most of the blue-chip stocks are high dividend and consistent dividend-paying stocks and that works in favor of the fund holding these stocks. This means these types of funds are likely to generate a better return for the investors.
Top Blue Chip Funds For Investment 2023
#1 SBI Blue Chip Fund
SBI Blue Chip Fund is one of the best-performing funds in 2023. SBI Blue Chip Fund has 93.98% investment in domestic equities of which 67.08% is in Large Cap stocks, 8.79% is in Mid Cap stocks, and 0.81% in Small Cap stocks.SBI Blue Chip Fund has generated 18% returns for the investors in the last 1 year. It is 4 stars rated fund by CRISIL.
This fund is suitable for investors who are looking to invest money for at least 3-4 years and looking for high returns.
- Expense Ratio: 1.59%
- AUM: ₹35770 Cr
- Minimum Investment: ₹5000
- Minimum SIP Investment: ₹500
- Annualised 3-Year Returns: 27.2%
- Annualised 5-Year Returns: 11.03%
#2 Kotak Blue Chip Fund
Kotak Blue Chip Fund is the next-performing fund in the blue-chip category. Kotak Blue Chip Fund makes 98.53% investment in domestic equities of which 74.16% is in Large Cap stocks, 9.1% is in Mid Cap stocks, and 4.04% in Small Cap stocks. Kotak Blue Chip Funds has given 14.5% returns to the investor in the last 1 year. CRISIL has given a 4-star rating to this fund.
- Expense Ratio: 1.8%
- AUM: ₹5633 Cr
- Minimum Investment: ₹1000
- Minimum SIP Investment: ₹100
- Annualised 3-Year Returns: 25.4%
- Annualised 5-Year Returns: 11.52%
#3 ICICI Prudential Blue Chip Fund
ICICI Prudential Blue Chip Fund is next on the list of best-performing blue-chip funds. This fund has given 15.2% returns to the investors in last 1 year. This fund has 89.13% investment in domestic equities of which 79.09% is in Large Cap stocks, 4.78% is in Mid Cap stocks, and 0.33% in Small Cap stocks.
- Expense Ratio: 1.63%
- AUM: ₹35876 Cr
- Minimum Investment: ₹100
- Minimum SIP Investment: ₹100
- Annualised 3-Year Returns: 27.25%
- Annualised 5-Year Returns: 11.75%
#4 Canara Robeco Blue Chip Equity Fund
Canara Robeco Blue Chip Equity Fund is one of the top-performing blue-chip funds. This fund has 95.91% investment in domestic equities of which 75.13% is in Large Cap stocks, and 5.48% is in Mid Cap stocks. This fund has generated 14.1% returns for the investor in the last 1 year. CRISIL has given a 3-star rating to this fund.
- Expense Ratio: 1.74%
- AUM: ₹9277 Cr
- Minimum Investment: ₹5000
- Minimum SIP Investment: ₹1000
- Annualised 3-Year Returns: 22.97%
- Annualised 5-Year Returns: 13.2%
#5 Baroda BNP Paribas Large Cap Fund
Baroda BNP Paribas Large Cap Fund has given very good returns to investors in the past. This fund has 94.43% investment in domestic equities of which 72.34% is in Large Cap stocks, 10.28% is in Mid Cap stocks, and 1.94% in Small Cap stocks. In the past 1 year this fund has generated 14.68% returns for the investors.
- Expense Ratio: 2.15%
- AUM: ₹1407 Cr
- Minimum Investment: ₹5000
- Minimum SIP Investment: ₹1000
- Annualised 3-Year Returns: 22.55%
- Annualised 5-Year Returns: 11.64%
Over to you
Did you invest your money in blue-chip funds or blue-chip stocks? If you need any help with stock market or mutual fund investment you can get in touch with me at sk@moneyexcel.com.
