What is Blue Chip Fund Meaning & Advantages of Blue Chip Mutual Fund

Outperforming its peers, the Axis Blue-chip fund is a promising one in the category. The fund has given 15% annualized returns in the last 5 years and 19% in the last 10 years. With these numbers and a consistent rating of 5 with Value research, ICICI Pru is a good Blue-chip fund to invest in. The numbers bluechip fund meaning are quite evident in the fund’s performance over the years. This fund is known to outperform other funds in its category and has maintained a value research rating of 5 since inception. Blue chips have typically proven track records like most Tata Companies have been around for over 100 years.

However, many mutual fund houses and advisors use blue chip funds as a synonym for large cap funds. There are many large cap mutual funds in India with the word blue chip in their name. For example, SBI Bluechip Fund, ICICI Prudential Bluechip Fund, Axis Bluechip fund, etc.

Please note that these are two large & mid cap schemes that have bluechip as part of their name. The term risk-averse describes the investor who prioritizes the preservation of capital over the potential for a high return. Stalwart is a description of companies that have large capitalizations and provide investors with slow but steady and dependable growth prospects. While a blue-chip company may have survived several challenges andmarket cycles, leading to it being perceived as a safe investment, this may not always be the case. Blue-chip funds invest in top companies from various sectors, thereby mitigating your investment risks.

A blue chip stock typically has a market capitalization in the billions, is generally the market leader or among the top three companies in its sector, and is more often than not a household name. For all of these reasons, blue chip stocks are among the most popular to buy among investors. Some examples of blue chip stocks are IBM Corp., Coca-Cola Co., and Boeing Co. A blue-chip mutual fund invests most of the corpus in blue-chip stocks.

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A simple withdrawal enables investors to encash their investments in moments of uncertainty without burdens of debt. The returns on this scheme are consistent enough that even in unplanned redemption, the investor does not suffer losses. As befits the sometimes high-risk nature of stock picking, the term “blue chip” derives from the card game poker. The simplest sets of poker chips include white, red, and blue chips, with American tradition dictating that the blues are highest in value. Update your mobile numbers/email IDs with your stock brokers/Depository Participant.

bluechip fund meaning

Since blue-chip companies are well-established, you feel considerably assured that you will earn steady and guaranteed returns. Investors can rely on metrics like the past performance of funds, performance during bullish and bearish market trends, etc., to base their investments. Please read all scheme related documents carefully before investing. Just upload your form 16, claim your deductions and get your acknowledgment number online.

The mutual funds investing in bluechip stocks or shares are also known as Bluechip Fund. Companies that have established their mettle in the market are popular and are generally preferred by investors. As such, their stock prices have the potential to grow even as they offer stability in volatile market conditions. This growth in the stock prices of blue chip companies affects the portfolio of blue chip mutual fund schemes that invest in such stocks. Hence, the schemes also have the potential to give good returns to investors.

Advantages of BlueChip Fund

Sytematic filtering of mutual funds across asset classes and criterias to suit your investment needs. Bluechip funds allow investors to benefit from the financial growth of bluechip companies. While a blue chip company may have survived several challenges and market cycles, leading to it being perceived as a safe investment, this may not always be the case. Capital generation and distribution are two main USPs of ICICI Pru Blue-chip fund. The portfolio is diversified across large-cap funds majorly in equity and equity-related securities. Buying shares in an index fund is similar to purchasing shares in a passive investment that does not seek to outperform the market but rather seeks to achieve the same return as the index it tracks.

  • Blue-chip funds are a good investment option if you are looking for diversification in your investment portfolio and want to balance risk with higher corpus development.
  • The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy.
  • It is to provide investors with the opportunity to earn returns through the financial growth achieved by bluechip companies.
  • Bluechip funds of both ULIPs and mutual funds are launched with the specific intent of allowing investors to profit from the financial growth of bluechip companies.
  • The blue chip industrials, which include Apple , Microsoft , Coca-Cola , McDonald’s , Disney and 25 other giants of the American economy, are still down nearly 14% this year, though.

Bluechip funds should ideally be a part of the portfolio but not a complete portfolio. China’s blue-chip stocks hit four-month low as Fed rate hike loomsThe CSI 300 Index ended down 0.7%, hitting the lowest level since May 9, while the Shanghai Composite Index edged down 0.2%. The Hang Sang Index fell 1.8%, and the Hang Seng China Enterprises Index declined 2.2%. Other Asian stocks fell, following a sell-off on Wall Street overnight. The yuan also weakened to a new 26-month low against a rising dollar right ahead of the Fed policy settings. The list is based on upside estimated by the analysts, with the highest potential stock coming on the top of the list.

Horizon for the Duration of Investments

One reason for this is that the broad market indices are mostly composed of blue chips. Bluechip funds are known for taking market downfalls better than lesser-known companies. When faced with unfavorable market conditions, the Bluechip can perform considerably better. These companies are able to operate profitably and better than average market performance even in adverse markets. So the investors should understand the valuation of those funds before investing in them. While dividend payments are not absolutely necessary for a stock to be considered a blue chip, most blue chips have long records of paying stable or rising dividends.

bluechip fund meaning

Individuals looking for short term investments can invest in debt funds. These types of mutual funds are invested in bluechip stocks of large stable corporates. These funds can be invested in mid-cap stocks, in bonds, or in money market instruments. You must have often come across fund names like RST Bluechip Fund or XYZ Large-cap Fund while looking for information on mutual funds, their performance, NAVs, and rankings. The fund name ‘Bluechip fund’ and ‘large-cap fund’ are used interchangeably because they both refer to those equity mutual funds that invest in stocks of large-cap companies listed on the stock exchanges. These are typically large, well-established, and financially sound companies that have operated for many years and that have dependable earnings, often paying dividends to investors.

What are Blue Chip funds?

You may invest in expert-curated mutual fund plans consisting of top-performing Blue Chip funds by downloading the BLACK by ClearTax app. Oliver Gingold, an employee at Dow Jones, coined the phrase ‘Blue-Chip’ in the year 1923. This term came into practice after Gingold, while standing near the stock ticker at a brokerage firm, noticed that several stocks traded at $200 or more per share. Since then the term has been used to refer to highly-priced stocks, but now it is used more commonly to refer to high-quality stocks. A BlueChip Fund is an equity plan that aims to provide possibilities for investors to create wealth to assist them to achieve their economic objectives.

Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month. They boast of superior and sustainable cash flows indicative of past performances. Block deal is a single transaction, of a minimum quantity of five lakh shares or a minimum value of Rs 5 crore, between two parties. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years. Her expertise covers a wide range of accounting, corporate finance, taxes, lending, and personal finance areas.

The years of profitability of blue-chip funds make them a sound investment scheme, which is why a lot of investors wish to get them in their portfolio. These mutual funds come with an investment horizon of over 7 years. As a result, blue-chip funds are ideal for achieving long-term financial goals such as post-retirement planning.

Financing such goals can be best done with the help of blue-chip funds. The returns are attractive, the risk is relatively lower and the compounding is consistent over time. There are several reasons for the investors to https://1investing.in/ be interested in such blue chip stocks. Here are a few popular reasons why investors prefer such blue chip stocks. By virtue of their performance, blue-chip fund companies enjoy high credit-worthiness in the market.

Financial consultants and fund companies in India frequently use the term “bluechip” to refer to large cap funds. The term “bluechip” is frequently include in the strategy category name of large-cap mutual funds. The Axis Bluechip Funds, the ICICI Prudential Bluechip Fund, and the SBI Bluechip funds are examples of well-known large cap plans with the word “bluechip” in their titles. However, it must be understood that blue chips are typically high market companies. That would logically also mean that due to the high demand, such blue chips tend to be expensively valued in terms of PE ratios.

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