Why SBI Bluechip Fund is suitable for long term investment


The SBI Bluechip Fund is an open-ended, equity mutual fund that mainly invests in the equity and equity-related instruments of large-cap corporations. The fund is actively managed and can dynamically change its asset structure to match current market conditions. The fund seeks to provide long-term capital appreciation and regular dividends to investors while minimizing the risks associated with investing in the market. SBI Mutual Fund House introduced SBI Bluechip Fund in February 2006.

Performance of the scheme

SBI Bluechip Fund direct Plan (G) Fund is a solid performer within its category. The fund was launched in February 2006, and on several occasions, improved its benchmark and category. The fund was not able to beat its benchmark or category in investment cycles of 3 years or less, but the fund outperformed both its benchmark and category in investment cycles of 5 years or more. Historically, the fund has performed well in bullish cycles, and the fund delivered its best performance between March 2009 and March 2010, outperforming both its segment and benchmark by a significant margin.

Scheme investment philosophy

The SBI Bluechip Fund implements a combination of investment growth and value styles, which gives the best returns for finding overvalued stocks as well as undervalued stocks. Often, the scheme uses a combination of a top-down approach and a bottom-top approach to select stocks of companies in the markets. The fund has a large-cap bias, i.e., the fund mainly invests in large-cap trading stocks. SEBI defines large-cap companies as the top 100 companies in terms of absolute market capitalization.

SBI Bluechip Fund Portfolio

SBI Bluechip Fund is a highly diversified mutual fund with a big-cap scheme. The fund invests mainly in stocks of companies operating in the finance sector of the economy. The SBI Bluechip fund direct Plan (G) Fund distributes its assets across 53 stocks, with its top 10 stocks comprising around 43 per cent of the fund overall.

The fund invests 88% in large-cap stocks and the remainder in mid-cap stocks. The fund makes very modest investments in small-cap stocks. The fund currently invests in the finance, FMCG, automobile, construction, and energy sectors of the economy.

Asset allocation

SBI Bluechip Fund is a large-cap fund but invests moderately in stocks of midcap small-cap companies to increase returns. The fund makes small investments in debt and other money market instruments to provide good liquidity to debt and regular income investors, and stability rates during volatile market cycles.

Suitability for investment

SBI Bluechip Fund is an equity mutual fund, it bears risk due to exposure to equity, but as the fund mainly invests in large-cap stocks, it is relatively compared to mid-cap small-cap funds. The fund is suitable for investors who have a high-risk appetite and long investment horizon of at least three years.

Conclusion: The SBI Bluechip direct (G) Fund aims to provide long-term capital appreciation and regular income for its investors primarily through systematic investments in large-cap companies in equities and equity-related instruments. The fund is actively managed, so it can adjust its risk to match current market conditions.