Moneycontrol
Last Updated : Sep 25, 2018 03:32 PM IST | Source: Moneycontrol.com

MF Review: How has SBI Bluechip Fund performed and does it suit you?

SBI Blue Chip Fund can provide an opportunity for investors for long-term growth by getting their money invested in the denoting companies.

Navneet Dubey @imNavneetDubey
Large-Cap Funds | Large-cap funds are less risky equity mutual funds as they consist of stocks of blue-chip companies having large market capitalisation. The returns may be lower than other equity mutual fund categories, nonetheless, the returns usually beat inflation when one invests money over a longer period of time. Hence, these funds should be a core part of one’s portfolio.
Large-Cap Funds | Large-cap funds are less risky equity mutual funds as they consist of stocks of blue-chip companies having large market capitalisation. The returns may be lower than other equity mutual fund categories, nonetheless, the returns usually beat inflation when one invests money over a longer period of time. Hence, these funds should be a core part of one’s portfolio.

SBI Bluechip Fund scheme was launched on 20th January 2006. The AUM of the scheme as on 31st August 2018 is Rs 20702 crore.

The investment objective of the scheme is to provide investors with opportunities for long-term growth in capital through an active management of investments in a diversified basket of large cap equity stocks (as specified by SEBI or AMFI from time to time).

Fund Manager

Sohini Andani is the Fund Manager managing the scheme. She also manages SBI Magnum Midcap Fund and SBI Banking and financial services Fund. She joined SBIFM as Head of Research in 2007.

Investment Strategy

SBI Blue Chip Fund is an open-ended growth scheme. The scheme can provide an opportunity for investors for long-term growth by getting their money invested in the Blue Chip Companies. Investments are made in stocks of companies whose market capitalisation is at least equal to or more than the last stock of BSE 100 index and is a blue chip stock. Along with equity and equity-related instruments, under this scheme, money is invested in a diversified mix of debt and money-related instruments.

The scheme invests almost 70 percent of its assets in equity and its related instruments and the remaining 30 percent is invested in a mix of money market instruments, fixed or floating rate debt instruments and foreign securities. The scheme has a good mix of equity and equity-related instruments along with derivatives and foreign securities which come under high risk profile. On the other hand, the remaining is categorized into low to medium risk profile. Blue chip companies normally have a history of successful growth, high visibility and reach, good credit ratings and widespread interest among investing public.

Portfolio composition in the present scenario

Sohini Andani has invested most of the funds in financial and banking sector companies, which gives clarity as to how a company will perform in a given sector in the long term. However, from last few months right after the demonatisation banking sector witnessed high volatility in the market. Over the long term perspective, the scheme has given a good dividend to investors and will deliver a decent return last years, the fund gave 29.7 percent while its benchmark index S&P BSE 100 has also delivered 8.4 percent returns in last year time period. The scheme is having a decent exposure in well-established and emerging companies which have a sizeable market share in their respective sectors.

The top overweight sectors in the fund are banking & finance and automotive and is underweight on oil & gas and food & beverage. The major exclusions from the fund are utilities and telecom sectors.

The fund is allocating 70%–100% in Equity and equity related instruments including derivatives, 0% - 10% in Foreign Securities/ADR/GDR, 0%-30% Fixed/Floating rate debt instruments and Money Market instruments. The scheme has invested around 80% in large-cap and remaining portfolio in mid-cap companies.

Top Sectors as on August 2018

1

Top 10 companies as on 31st August 2018

2

Performance of SBI Bluchip Fund

4
Note: 1. Past performance may or may not be sustained in future.

2. Benchmark: S&P BSE 100

Performance of other schemes managed by the Fund Manager

6

*Returns as on 31st August 2018
Note: 1. Past performance may or may not be sustained in future.

Benchmark: - Nifty Financial Services for SBI Banking & Financial Services Fund and - Nifty Midcap 150 for SBI Magnum Mid Cap Fund

Peer comparison

3

One should also keep a note that it has underperformed some of its peers in the past one year performance for example Reliance Large Cap Fund - RP (G) which gave 11.4 percent in one year and ICICI Pru Bluechip Fund - D (G) which gave 11.8 percent whereas SBI bluechip gave only 7.1 percent of returns. In 3 years performance, ICICI Pru Bluechip Fund (G) gave 14.7 percent and HDFC Top 100 Fund - D (G) gave 14.8 percent returns whereas SBI bluechip fund gave 10.2 percent returns in last 3 years of return. However, in the last 5 years track record, the fund has considerably performed very well while comparing it with several other funds.

Growth in the invested amount

The current value of an investment of Rs 10,000 in the scheme Vs Benchmark

4

Should you invest now?

“SBI Bluechip Fund is regarded as one that provides stability to one’s mutual fund portfolio. Investors wishing to have a large-cap exposure for long term horizon can consider this fund, preferably through the SIP mode,” said Manish Kothari, Director & Head of Mutual Funds, Paisabazaar.com

Key takeaway from financial expert

SBI Bluechip Fund is mandated to invest in large cap stocks, i.e top 100 companies in terms of full market capitalisation. It follows a combination of value and growth style of investing, which can prove to be effective in a current scenario of stretched valuations in the large-cap category and in case of any major future correction in the segment.

Kothari told Moneycontrol that the cautious investment style of this fund has led it to underperform its benchmark indices and peer funds over the last 3 years, the fund has outperformed them over the last 5-year and 7-year period by a modest margin. SBI Bluechip fund has also outperformed its benchmark indices during bearish market conditions.

“Hence, this fund is best suited for those wishing to benefit from the growth of top corporates of India, and at the same time contain their downside risk,” he said.
First Published on Sep 24, 2018 11:00 am
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