Seeing your financial assets grow over time is something that most of us aspire. But until and unless you take some actions or invest your money in the right instruments, it probably isn’t going to happen. Fortunately, we now have access to a large number of avenues where one can invest their capital and see it grow. One such popular investment option is a mutual fund.
Mutual funds are easy to understand, buy and redeem. These factors, along with the transparency that they provide, make them a compelling option to consider. Yet, the presence of various mutual funds in the market can be a bit confusing and put some people off. For individuals or investors who are looking to invest in a mutual fund from a long-term perspective, SBI Bluechip Fund is a great option.
SBI Bluechip fund makes your life easier by investing in only Blue-Chip companies or in other words, the most established ones out there. The inclusion of these companies ensures a lot of stability and steady growth in your portfolio. However, one must be cognizant of the fact that the fund works best when set for a long-term.
The SBI Blue Chip Fund is an open ended large cap mutual fund. It, being an open ended fund, gives the investors an opportunity to continue accumulating as many units as they can. An open ended mutual fund usually does not have any restrictions on the number of units that the fund house can allot to investors. The market size of a company is calculated on the basis of market capitalization and SBI utilizes the same to pick up companies to invest in.
Though the fund primarily scans through all the large cap companies listed in BSE, it invests only in the ones that qualify as Blue Chip companies. The fund managers have managed to do a good job of diversifying the assets. The assets are split into money related and debt instruments along with equity based instruments and direct equity investments.
The fund was launched on the 20th of January, 2006. It follows the benchmark of S&P BSE 100. The fund invests close to 70% of its assets into equity-based instruments or directly into equity. Whereas, the remaining 30% goes into fixed or floating rate instruments and money market instruments. It must be noted that equity accounts for higher risk factors, whereas the money market instruments bring the risk down.
It almost defeats the purpose if one doesn’t invest with certain goals or objectives. Just like life goals, investment goals call for better investment. You can track your goals and make changes as and when needed. Thus, it should not come as a surprise that fund houses also have strategies and objectives for their funds.
Before investing in a fund, you can go through these investment objectives and strategies. If you feel that these objectives or strategies are in line to your goals, the fund might be a great fit. SBI Blue Chip fund work on the central goal of helping investors see their capital grow. Any investment for SBI Blue Chip undergoes rigorous analysis and research. If and only if they meet certain criteria will the fund manager give the green flag for investment.
To ensure maximum returns without taking a lot of risks, SBI Blue Chip follows a bottom-up strategy and focuses on sector dynamics. Since they focus on specific sectors, the aim is to buy the move valuable stocks at cheap prices which would naturally yield good returns. To ensure that they select the best, here are some of the criteria that they follow to select stocks.
Take a closer look at the leadership of a company and related changes.
The decisions taken by management as far as strategy is concerned.
Of course, the growth potential of a company along with the proper allocation of capital.
To strike a balance between healthy and consistent returns, about 80% of the assets allocated towards equity goes into buying large cap stocks or Blue Chip stocks. Mid cap companies make up the remaining 20% of the investment. This strategy has worked well for the company over the last few years and has helped them constantly beat the indices when it comes to performance.
The presence of many options to choose from is what makes Mutual Funds lucrative as an investment option. You can either time the market accurately and do lumpsum investments or take a more balanced approach with the help of SIPs, the option is all yours. Here are the two distinctive flavours in which you can buy SBI Blue Chip Fund.
A regular mutual fund is one where you buy the policy from an advisor, distributor or a broker. Since they are the ones who lead you to the fund, the AMC pays them some commission for it. The expense ratio of the plan covers these costs. Thus, the regular plans have a slightly higher expense ratio.
As the name suggests, a direct plan is something that you can buy from an AMC or asset management company directly. Since there is no involvement of intermediaries, AMCs do not have to pay any commissions. This results in slightly lower expense ratios. The following are the different SBI Blue Chip Fund plans that you can buy.
This fund type is a regular fund that you can buy from your advisor, distributor or broker. Any gains or profits that the fund makes over a period of time is reinvested in the fund. This allows the fund to benefit from the power of compounding. And you stand to receive the gains only on redeeming the units.
You will be able to buy the Direct Growth plan only from SBI and a limited number of other distributors. Since it is a growth plan, any gains from the fund are reinvested. It is this reinvestment that helps investors compound and maximize their returns.
When you opt for a regular dividend plan, any gains are passed on to the investors in the form of dividends. It then depends on the investor if they wish to invest the money back into the funds or use it for other purposes.
The direct dividend fund is pretty similar to regular dividend fund when it comes to functioning. It can serve as a source of income. The only difference being the expense ratio. The direct dividend funds have lower expense ratios as compared to regular dividend funds.
A crucial role that separates normal mutual funds from the great ones is a fund manager. The person is responsible for taking all the major decisions related to the fund. Though they have an entire team of analysts and researchers to aid with their decisions, the final call lies with the fund manager.
For SBI Blue Chip Fund, Ms. Sohini Andani is the fund manager. She has been handling the fund since 10th September 2010. Ms. Sohini has more than 23 years of experience under her belt and she brings all of them to SBI Blue Chip Fund. She had joined SBI Mutual Fund as the head of Research in the year 2007. Her promotion as the fund manager has been instrumental in turning the Mutual Fund profitable.
Her prior experience involves working for brands such as LKP Shares and securities, Adani Share Brokers, ASK Raymond James and KR Choksey Shares. Under her guidance and able leadership, the mutual fund enjoys a healthy influx of funds and is one of the top performing large cap funds.
As an investor, if you are willing to take a moderately high risk, SBI Blue Chip fund is for you. The following are some of the risks that are associated along with this plan.
According to some clauses, the scheme can invest in other markets as well. This opens up the risks related to currency, political tensions and sovereign risks.
Since it is an equity based fund at its core, any changes in the company dynamics or the market will impact the NAVs and eventually, your portfolio.
The increase or decrease in the interest rates of the money market instruments will impact the NAV and your portfolio directly.
The trustees of the fund hold the discretion of limiting, or in extreme cases, suspend redemption of units in dire situations.
As a part of equity based investments, the fund invests in derivates as well. As derivates get their values from the underlying assets, any changes to them or counterparty risks or interconnections risks are always on the cards.
There might be uncertainties that there would be enough cash flow in the future for reinvestment, thereby making way for reinvestment risks.
Knowing the holding of a mutual fund can be more than helpful to decide if the fund is ideal for you or not. If you are someone who takes keen interest in the capital market, being aware of the holdings will help you decide better
| Holding | Percentage Allocation |
|---|---|
| HDFC Bank Limited | 8.65 |
| Cash and Cash Equivalents | 7.58 |
| ITC Limited | 5.10 |
| Larsen & Toubro Limited | 5.00 |
| Mahindra & Mahindra Limited | 4.05 |
| Nestle India Limited | 3.46 |
| Infosys Limited | 2.72 |
| Sun Pharmaceutical Industries Limited | 2.70 |
| State Bank of India | 2.52 |
| ICICI Bank Limited | 2.42 |
Here are the top 5 sectors in which the fund invests heavily along with its distribution pattern.
| Sector | Percentage Allocation |
|---|---|
| Financial Services | 30.93 |
| Automobile | 10.75 |
| Automobile | 10.26 |
| Energy | 7.61 |
| Construction | 6.38 |
| Asset Under Management | INR 19103.2 cr |
| NAVs | - SBI Blue Chip Regular (G) Fund = 36.3677.
- SBI Blue Chip Regular (D)Fund = 20.6890 - SBI Blue Chip Direct (G) Fund = 38.3616. - SBI Blue Chip Direct (D) Fund = 24.9033. |
| Returns | 1 Year 3 Year 5 Year
SBI Fund 2.25% 9.72% 18.11% S&P BSE 100 10.97% 12.84% 15.83% |
Investors who are willing to add SBI Blue Chip fund to their financial portfolio, have two options to do it. You can either opt for online mode or go the old school way and buy the fund offline.
For online mode, you have the option of either directly buying it from SBI Mutual Fund’s website or from a distributor/advisor account. In either case, you need to submit the KYC form along with all the supporting documents. Once the KYC is approved, you can proceed with the payment and units will be allotted to you.
You can either reach out to a representative of SBI Mutual Fund or any local branch office. You would need to complete your KYC by filing the form and providing with necessary documents. Along with the documents, you would need to write a cheque for the amount you wish to invest in the fund. On the approval of KYC, SBI would allot the units to you.
How can I invest in mutual funds online SBI
You can either visit SBI Mutual Fund’s website or use the websites of distributors/advisors/brokers to buy the fund online. To be able to buy the fund, your KYC form needs to be filled up. Post that, you can opt for a lumpsum deposit or SIP
How can I invest in SBI Bluechip fund?
To invest in SBI Blue Chip, you can either opt for the online or offline mode. In either mode, you would need to get your KYC done, post which you can invest in the mutual fund.
Is it good to invest in SBI Bluechip?
The fund has performed well over the years when compared to the benchmark when you consider a long term horizon. The balanced approach of the fund makes it ideal for long term investment.
Is SBI Blue Chip Fund Tax Saver?
No. You cannot claim the investments made towards SBI Blue Chip Fund for tax saving purposes.
