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What are bluechip funds?

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Last Updated: Jun 12, 2020, 04.08 PM IST
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Summary As per Sebi norms on mutual fund categorisation, there is no official bluechip mutual fund category.

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Thanks to the bleak economic scenario and prevalent risk-aversion among market participants, many mutual fund investors want to know about bluechip funds these days. They are posting their queries on various mutual fund forums on these funds. Some investors are also calling mutual fund advisors for information. What exactly are bluechip funds? It is not an official category approved by Sebi.

As per Sebi norms on mutual fund categorisation, there is no official bluechip mutual fund category. Most mutual fund advisors and some companies use bluechip as a synonym for large cap funds. Several large cap mutual fund schemes contain bluechip in their name. For example, Axis Bluechip Fund, ICICI Prudential Bluechip Fund, SBI Bluechip are prominent large cap schemes that use bluechip in their names.

There are some schemes that use bluechip in their name, mostly preceded by the word emerging. For example, Mirae Asset Emerging Bluechip Fund and Principal Emerging Bluechip Fund. Please note that these are two large & mid cap schemes that have bluechip as part of their name. ICICI Prudential US Bluechip Fund is an international scheme.

Be careful. Do not simply pick a scheme only because it contains bluechip in its name and assume that it has to be a large cap mutual fund.

A bluechip is a very large, easily recognized, financially stable company with a large distribution network. These companies typically sell high-quality products and services that are widely accepted across the country, or sometimes abroad. Because of these qualities such companies are more resilient to economic downturns. They may continue to grow or operate profitably even in adverse market conditions – that is why their stocks are less volatile in a rough market.

As per Sebi norms, large cap mutual funds have the mandate to invest at least 80% of their corpus in stocks of top 100 companies by market capitalsaton. These top 100 companies mostly meet the definition of bluechip companies. So, it is safe to assume that you are investing bluechip schemes.

Bluechip or large cap mutual funds are typically recommended to investors with a conservative risk profile to meet their long-term goals that are at least five to seven years away. As said earlier, they are ideal for conservative investors to grow their wealth over a long period without exposing themselves to lots of risk and volatility.

If you find their investment premise appealing, you may consider investing in the following large cap schemes:

  • Axis Bluechip Fund
  • ICICI Prudential Bluechip Fund
  • Nippon India Large Cap Fund
  • Canara Robeco Bluechip Equity Fund
  • HDFC Top 100 Fund
  • Mirae Asset Largecap Fund
If you want to be updated about the performance of these schemes, you may follow our recommendation lit: Best large cap mutual funds to invest in 2020. We usually update the list in the first week of every month.

Also Read

Axis Bluechip Fund: Fund review

Should I do STP from Mirae Asset Emerging Bluechip Fund?

Should I sell my investments in SBI Bluechip Fund?

Should I continue to invest in ICICI Prudential Bluechip Fund?

Mirae Asset Emerging Bluechip Fund review: A mutual fund that outshone peers for years

Can I invest in Axis Bluechip Fund to make Rs 25 lakh?

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