SBI Bluechip Fund

The SBI Bluechip Fund is an equity scheme that predominantly allocates its assets in large-cap equity and equity-related instruments in blue-chip companies. The SBI Bluechip Fund follows a combination of top-down and bottom-up investment strategies to select stocks across sectors to build a diversified portfolio.

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In their quest for a blend of growth and value-style investment, the Fund Manager allocates a minimum of 80% of assets in large-cap stocks in select companies with high revenue growth business models. Simultaneously, assets up to 20% are invested in stocks other than large-cap, and debt and money market instruments to diversify the basket in the portfolio. 

The SBI Bluechip Fund portfolio holdings, as of 30 April 2021, bears testimony to the fund’s focus on large-cap blue-chip stocks expressed in a percentage of the total AUM. Accordingly, some of the top stocks in the portfolio are HDFC bank (9.21), ICICI bank (6.91), Infosys (5.29), HCL Technologies (4.64), L & T (3.83), among many others. The same percentage allocation sector-wise in the portfolio shows Financial Services (34.84), IT (10.84), Automobile (10.17), Pharmaceuticals (7.81), Construction (6.82), Oil & Gas (6.23), to name a few. The stated figures amply testify to the SBI Bluechip Fund’s investment philosophy to generate investor confidence. 

The SBI Bluechip Fund offers the following options to the investor to choose from:

SBI Bluechip Fund Regular:

  • Growth Option
  • IDCW Option

SBI Bluechip Fund Direct:

  • Growth Option
  • IDCW Option

There is no fundamental difference between the Regular and Direct SBI Bluechip fund plans, except where the investor has chosen to subscribe. If the subscription has been made at the intermediary, the plan is termed Regular and the other at the Fund House is Direct. The visible difference between the two is the higher NAV for the Direct plan than the Regular plan. The higher Expense Ratio causes for the Regular plan due to commission paid by the Fund House. 

**Growth: As already stated, the shareable profits are reinvested in the growth option for a cumulative capital appreciation in longer time horizons. 

**IDCW: The full form of IDCW is Income Distribution-Capital Withdrawal. The investor can exercise this option to either receive a Payout or Reinvest in the fund. 

Fund Details

Parameters  Particulars
Fund Name  SBI Bluechip Fund Regular and Direct Plan Options.
Fund House  SBI Funds Management Pvt. Ltd. It is also known as   SBI Mutual Fund.
Launch Date 14 February 2006
Scheme Category Equity Fund
Scheme Type  Open-ended equity scheme predominantly investing in Large-cap stocks.
AUM  Rs. 26468.35 Cr as of 30 April 2021
Benchmark S&P BSE 100 Index
Application Investment  Minimum: Rs.5000 Additional: Any amount in multiples of Rs.1000 after that.
Lock-In  No Lock-in
Entry Load  Not applicable 
Exit Load For exit within twelve months from the purchase date: 1% For exit after twelve months from the purchase date: Nil 
Risk Grade  Above Average
Return Grade Average
Risk Level  Very High 

Investment Objective

The SBI Bluechip Fund scheme aims to provide the investor’s opportunities in long-term capital growth through a diversified basket of large-cap equities in the portfolio employing an active asset allocation management in a blend of growth and value style investments. While the fund’s primary focus is targeted at large-cap stocks, diversification is achieved by resorting to asset allocations involving 20% of the net assets. 

As per SEBI Regulations with risk profiles hovering between the low and high, other avenues are also open to the fund to achieve the fund objective for higher yields in a long horizon. Despite the continuous effort, the fund may not realize the objective successfully in market volatility. Thus, the fund does not guarantee sustained returns to the investor. The silver lining is that large-cap stocks are the most traded instruments endowing them with high liquidity. As a result, they are least likely to be affected by market fluctuation to deliver higher yields. 

Fund Summary

SBI Bluechip Fund-Growth Regular Plan

  • Risk Level: Very High
  • NAV: Rs.53.4603 as of 25 May 2021. 
  • Expense Ratio: 1.79% as of 30 April 2021.
  • Fund Started On: 14 February 2006.

SBI Bluechip Fund-Growth Direct Plan

  • Risk Level: Very High
  • NAV: Rs.57.4996 as of 25 May 2021. 
  • Expense Ratio: 0.98% as of 30 April 2021.
  • Fund Started On: 1 January 2013.

Fund Returns Summary Table: Performance as of 26 May 2021

    1. SBI Bluechip Fund Growth Regular Plan

      Period  Annualized Return % Absolute Returns %
      Last 1 year 70.99 70.99
      Last 2 years 15.10 32.62
      Last 3 years 12.04 40.73
      Last 5 years 12.83 82.92
      Last 10 years 14.48 287.14
      Since Inception 11.41 436.18
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
  1. SBI Bluechip Fund-Growth Direct Plan

    Period  Annualized Return % Absolute  Returns %
    Last 1 year 72.26 72.26
    Last 2 years 15.99 34.70
    Last 3 years 12.94 44.17
    Last 5 years 13.88 91.61
    Since Inception 15.79 242.67

Cumulative Pros and Cons Table

Pros  Cons
The predominant portfolio equity asset class can help capital grow, beating inflation.

Liquidity in the open-ended scheme is ensured.

The primary target is to outperform the benchmark. 
Fluctuations in equity markets may lead to investment value erosion.

High AUM at Rs.26468.35 Cr tends to slow down returns.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Benefits of SBI Bluechip Funds

The SBI Bluechip Fund’s investment focus on large-cap stocks helps realize the investor’s aspiration for long-term capital appreciation to meet various life goals and milestones, including children’s education and comfortable retired life. Despite the fund being tagged as high-risk, it suits investors with a similar philosophy to earn superior returns on investment in a time horizon exceeding five years. Moreover, the diversified equity-laden portfolio is the best bet to beat inflation and still create wealth. Some of the critical benefits accrued from the fund are:

  1. Potential Earning

     The SBI Bluechip Fund managers pursue an active investment strategy to blend with capital growth and style to ensure capital appreciation over time. The targeted large-cap stocks belong to companies with a proven track record of high revenue growth in business models most likely to deliver higher yields.

  2. Transparency

    The high-risk open-ended SBI Bluechip Fund scheme complies with the SEBI Regulations regarding NAV computation and information dissemination. Accordingly, the daily NAV computed at the business day’s end is uploaded at the Fund House and AMFI portal.  The investor can track the portfolio movement daily and initiate informed steps to safeguard investment integrity. 

  3. Convenience

     The investor has an abundant choice to subscribe to the fund at the intermediary or the Fund House directly either in lump sum or by initiating a SIP. The minimum investment is Rs.5000 in a lump sum and Rs.500 in SIP. In the SIP mode, the investors have the following options:

    • Weekly: Rs.1000 minimum for 6 weeks.
    • Monthly: Rs.500 minimum for 12 months or Rs.1000 for 6 months.
    • Quarterly: Minimum Rs.1500 for at least 1 year.
    • Semi-Annual: Rs.3000 minimum for at least 1 year.
    • Annual: Rs.5000 minimum for at least 4 instalments. 

Fund House Details

The Fund House managing the SBI Bluechip Fund is a joint venture named SBI Funds Management Pvt. Ltd.  It is commonly referred to as the SBI Mutual Fund with a thirty-year legacy backed by the SBI and Amundi of France as the shareholders. SBI Mutual Fund operates through its headquarters in Mumbai and manages 46 schemes in varied flavors with an impressive AUM valued at Rs.5.05 Lac Cr as of 31 March 2021. It was incorporated in 1987 to become India’s first Non-UTI Mutual Fund. Today, it has a complement of 6 million strong clientele served through its 212 branches across India. 

SBI, the sponsor bank, divested 37% of its holding in the Mutual fund arm to France’s well-known asset management company, Societe Generale, in July 2004 for US$ 35 million. The entire stake of Societe Generale was transferred to the Amundi Group in June 2011 to develop the SBI Mutual Fund into an international brand.

As of today, the principal shareholders in the SBI Funds Management Pvt. Ltd. are:

  • State Bank of India (63% Stake): It is a premier public sector bank and the only Indian bank listed in the Fortune Global 500   largest corporations in 2020. It has a massive network of 24000 domestic branches and 191 international branches spread in 36 countries. It commands a dominating presence in the banking industry as the largest public sector bank.
  • Amundi (37% Stake): It is the second-largest asset management company in Europe formed by the merger of Credit Argicole and Societe Generale’s asset management arms on 1 January 2010. It operates in the SBI Mutual Fund through its wholly-owned subsidiary Amundi India Holding introducing global best practices of international standards.   

Who Should Invest in SBI Bluechip Fund?

The SBI Bluechip Fund is ideally suited to investors who have the appetite to aggressively pursue market risk with a concentrated focus on capital appreciation in a long time horizon exceeding five years.  The fund’s investment focus on large-cap equities matches this mutual interest of long-term capital appreciation to create wealth. It helps the investor plan for life goals involving children’s education, future, and retirement in a long timescale. The following indicative list describes the investors who can benefit from the fund’s success. 

  • Indian Residents.
  • Minor assisted by a natural or legal guardian.
  • NRIs , whether repatriated or non-repatriated 
  • The HUFs, through its Karta. 
  • Corporations, Companies, PSUs, and Enterprises. 
  • Partnership & proprietorship firms
  • Banks and Financial Institutions. 
  • Mutual Funds 
  • Registered Associations, Societies, Trusts, and Body of Persons. 

Conclusion

The SBI Bluechip Fund is an open-funded high-risk equity scheme with an investment objective primarily focused on large-cap stocks in blue-chip companies in the top bracket with a proven track record of revenue growth. The Fund Managers allocate assets up to 20% of its value in other equities, debt, and money market instruments to diversify the portfolio further. However, the most significant advantage of large-cap investments is their ability to absorb market volatility and sustain higher yields. It suits investors who pursue the fund regardless of the inherent risk for wealth creation as the best bet to beat inflation with continued capital appreciation.

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