Blue-chip funds are basically large-cap funds that invest a major portion of their assets in stocks of well established companies listed in the Indian stock market. These funds are considered to be one of the safest equity investments and have a strong record of paying dividends.
Check out the 10 best blue chip mutual funds to invest in 2023 for stable, long-term returns. Let’s dive in!
The table below provides the details of the top blue chip funds in our country:
|Blue Chip Funds||Features|
|Canara Robeco Bluechip Equity Fund-Direct Plan-Growth||NAV: ₹45.66|
Expense Ratio: 0.48%
AUM: .₹8,672.96 Cr
|Axis Bluechip Fund-Direct Plan-Growth||NAV: ₹46.7|
Expense Ratio: 0.59%
AUM: ₹33,049.77 Cr
|DSP Flexi Cap Fund-Direct Plan-Growth||NAV: ₹67.52|
Expense Ratio: 0.81%
AUM: ₹7,725.75 Cr
|Kotak Bluechip Fund-Direct Plan-Growth||NAV: ₹415.91|
Expense Ratio: 0.64%
AUM: ₹5,259.24 Cr
|Edelweiss Large Cap Fund-Direct Plan-Growth||NAV: ₹61.19|
Expense Ratio: 0.93%
AUM: ₹399.36 Cr
|UTI Mastershare Unit Scheme-Direct Plan-Growth||NAV: ₹199.37|
AUM: ₹10,312.04 Cr
Expense Ratio: 0.95%
|Nippon India Large Cap Fund-Direct Plan-Growth||NAV: ₹59.06|
Expense Ratio: 1.01%
AUM: ₹12,524.53 Cr
|Baroda BNP Paribas Large Cap Fund-Direct Plan-Growth||NAV: ₹158.06|
Expense Ratio: 0.94%
AUM: ₹1,347.24 Cr
|Mirae Asset Large Cap Fund-Direct Plan-Growth||NAV: ₹84.47|
Expense Ratio: : 0.53%
AUM: ₹32,910.58 Cr
|ICICI Prudential Bluechip Fund-Direct Plan-Growth||NAV: ₹73.20|
Expense Ratio: 1.06%
AUM: ₹34,198.52 Cr
This fund is suitable for investors who are looking to invest for at least 3-4 years and generate higher returns. At the same time, these investors should also be ready for the possibility of moderate losses in their investments.
Axis Bluechip Fund has 87.41% investment in domestic equities out of which 72.2% is in large-cap stocks and 3.08% in mid-cap stocks.The fund also has 0.81% investment in debt, of which 0.81% are invested in Government securities.
This blue-chip fund invests flexibly across carefully selected companies of different sizes; large, mid or small. Investors with moderate risk-appetite looking to capture the growth of top blue-chip companies can invest in this scheme.
This is an open-ended equity fund that invests in leading companies with large market capitalisation across various sectors which have the potential to give stable returns. This scheme is ideal for investors looking to invest in India’s leading bluechip companies’ stocks.
This scheme could be ideal for investors who have just started out on their investment journey and want to invest in pure equity. This fund demands a long-term investment horizon of 7 years or more.
UTI Mastershare Unit Scheme invests in leading businesses of large market capitalisation following Growth at Reasonable Price (GARP) investment style. The fund takes a top down view for sector active weights and then uses a bottom up approach for stock selection.
The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly into equity and equity related instruments of large cap companies. The secondary objective is to generate consistent returns by investing in debt, money market securities, REITs and InvITs.
This fund has 96.51% investment in domestic equities out of which 73.8% is in large-cap stocks, 10.21% is in mid-cap stocks and 1.12% in small-cap stocks. The fund has 0.36% investment in debt, of which 0.36% is in Government securities.
Mirae Asset Large Cap fund has the flexibility to invest across sectors and themes. This scheme tries to identify companies which have sustainable competitive advantage – stocks which have strong pricing power and are sector leaders.
The primary investment objective of this scheme is to generate long-term capital appreciation via a portfolio that is predominantly invested in equity and equity-related securities of large-cap companies.
Disclaimer: All data updated as of March 31, 2023
Blue chip funds invest a majority of their corpus in stocks of large-cap or established companies. Large cap or blue chip companies are generally the largest 100 companies in terms of market capitalisation, making them relatively safe investments. Also known as large cap funds, bluechip funds offer better stability than mid-cap and small-cap funds because they primarily invest in companies that are well-established. Staying invested in blue chip funds for the long-term could help mitigate risks and help generate inflation-beating returns.
Let’s take Canara Robeco Bluechip Equity Fund as an example. The fund has 96.3% investment in domestic equities of which 73.65% is in large-cap stocks, 7.2% is in mid-cap stocks. As you can see, a large portion of the corpus is allocated to large-cap stocks while a small percentage is allocated to mid-cap stocks. This diversification offers investors long-term capital growth while mitigating the risk of equity market volatility via exposure to large cap stocks.
Expected return rate (p.a)
Time Period (Years)
The following are some of the benefits of investing in the best bluechip funds:
As an investor, you would want to build a decent corpus for the future. Bluechip funds could help you grow your wealth slowly but consistently, and they can survive market headwinds. This makes it easy to achieve your financial goals.
Blue chip companies are well-established brand names, which makes sure that your investment keeps growing. These companies have proven track records of strong corporate governance and commitment for many decades.
While not offering the highest potential returns, bluechip funds carry fewer risks than many other equity investments. By investing in them, you can improve the quality and reduce the risks of your portfolio.
Due to their stability and creditworthiness, blue chip stocks are among the most frequently traded stocks on the market. As a result, you can easily redeem the fund units whenever you need cash.
The best bluechip funds are known for offering excellent returns over the long term. So, you must stay invested for a long duration (at least 5 years) for high returns. Although bluechip funds carry less risk than many other equity investments, you need to have a high-risk appetite to invest in them.
Many experts recommend these funds to first-time investors as it adds to their portfolio. If you are a young investor, you can also take an aggressive approach and invest a substantial part of your portfolio in these funds. It will help you grow your wealth at a steady pace and fulfill your long term financial goals.
Consider the following factors to select best blue chip funds:
Though a fund’s historical performance shouldn’t be considered a benchmark while selecting funds, however, looking at the fund’s historical performance over a period of at least 3-5 years to see how it has performed could help you get a fair idea about the fund.
Select a fund that’s aligned to your investment goal. Check if the fund’s investment objective matches your risk appetite. You can always take the help of a wealth advisor to make an informed investment decision.
Research the fund manager’s investment philosophy and track record to see if they have a consistent and successful history of managing blue chip funds.
Consider the fund’s expense ratio, which is the annual fee that the fund charges to cover its operating expenses. A lower expense ratio can mean more of your money is going towards investments.
Look into the fund’s portfolio diversification. It should have a good mix of different sectors and industries to reduce the risk of heavy losses if any particular sector underperforms.
Bluechip funds are taxed the same way as equity mutual funds depending on their holding period, meaning both LTCG (Long Term Capital Gains) and STCG (Short Term Capital Gains) are applicable.
Large cap equity mutual funds that are held for more than 12 months, fall under a tax bracket of 10% (Long Term Capital Gains). However, gains up to Rs.1 lakh are not taxable. Tax of 15% is applicable on short-term capital gains (STCG), when the mutual fund units are held for less than 1 year.
Blue chip funds have the potential to deliver consistent and solid returns to investors over a long period. Moreover, they carry low volatility and risks despite paying such good profits. Investors must check and compare the valuations, risk factors, exit load and expense ratio before investing in a blue chip fund.
In case you’re looking to invest in the equity market, start investing in index funds. Index funds are low-cost, offer exposure to the equity market without human bias, and have the potential to generate inflation-beating returns in the long-term. Start exploring and investing in index funds with Navi Mutual Fund starting at Rs.10 and capture the growth of various sectors across geographies.
Ans: The term ‘blue chip’ denotes high quality. The term is derived from the game of poker, where bluecoloured chips denote the highest value. This word was first used by Oliver Gingold to describe high-value stocks in 1923. Today the word ‘blue chip stocks’ refer to the shares of large and well-established companies that have consistently performed well financially.
Considering that blue chip or large-cap funds are equity funds, they are taxed like equity mutual funds. The capital gains that one earns from these funds are subject to tax depending on the holding period.
If an individual holds his investment for less than a year, it is seen as STCGs or short term capital gains and attracts a tax rate of 15%. But, if the holding period is one year or more, the capital gains earned are considered as LTCGs or long term capital gains. LTCGs are tax-exempt to Rs. 1 lakh. The long term capital gains above Rs. 1 lakh are taxed at 10% with applicable cess and surcharge.
Blue chip funds are equity schemes that primarily invest in large-cap stock. A blue chip index consists of blue chip stocks which are lucrative investment options that generate good returns.
There might be certain mutual funds whose underlying indices also feature blue chip companies.
Bluechip funds carry lower risks than mid-cap and small-cap funds, however, since these funds invest in equities, there’s always a certain degree of risk involved. However, you can mitigate this risk by staying invested for the long-term.
The first thing you need to do is check whether the scheme is aligned to your investment goals. You can consider other factors like fund performance, expense ratio and diversification while selecting a bluechip fund.
A bluechip fund is a large-cap fund that invests a majority of its corpus in the stocks of large-cap or top 100 companies in a bid to generate capital growth in the long-term.
Bluechip funds could be ideal for beginner investors seeking to invest in pure equity. Since bluechip funds largely comprise stocks of well-established companies, the investment risks are a bit lower than mid-cap or small-cap funds. However, you should invest in a bluechip fund(s) only if it matches your investment goals and risk appetite.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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