Welcome to PersonalFN’s weekly analysis on diversified equity mutual funds! In this issue, we have analysed SBI Bluechip Fund, highlighting its performance, peer comparison, investment strategy, fundamentals, portfolio, and suitability.

SBI Bluechip Fund is a popular Large Cap Mutual Fund known for its multi-bagger bets. It has currently found a spot among top quartile performers in the category after witnessing a prolonged phase of underperformance.

Growth of Rs 10,000 if invested in SBI Bluechip Fund 5 years ago

Graph 1

Past performance is not an indicator of future returns
July 11, 2023
(Source: ACE MF) 

Launched in January 2006, SBI Bluechip Fund is the second largest scheme in the Large Cap Mutual Fund category. While SBF has shown a mixed trend in terms of outperformance and underperformance over different market phases in the past, the fund has managed to generate satisfactory returns over the long run. The fund’s bias towards quality large-cap stocks, along with strategic allocation to mid-caps, has enabled it to record reasonable risk-adjusted returns for its investors. SBI Bluechip Fund prefers to stay away from momentum-driven bets, which could result in underperformance in the short term. Notably, SBI Bluechip Fund’s performance hit a rough patch in 2018-2019 and 2021. This impacted the fund’s cumulative returns. Regardless, with a focus on creating a diversified portfolio of fundamentally sound stocks, SBI Bluechip Fund managed to bounce back in the last couple of years with superior gains. The fund now stands among the top performers in the category across time frames and also stands strong compared to the benchmark. SBI Bluechip Fund’s CAGR over the last 5 years is around 14%, slightly higher than the 13.6% CAGR delivered by its benchmark S&P BSE 100 – TRI index. An investment of Rs 10,000 in SBI Bluechip Fund 5 years back would now be worth Rs 19,281.

SBI Bluechip Fund’s performance vis-á-vis category peers

Scheme Name Corpus (Cr.) 1 Year 2 Year 3 Year 5 Year 7 Year Std Dev Sharpe
Nippon India Large Cap Fund 14,769 29.31 19.81 30.41 15.35 15.67 16.13 0.42
HDFC Top 100 Fund 24,819 25.02 16.21 26.52 14.20 13.91 15.56 0.37
SBI BlueChip Fund 38,338 23.04 13.66 25.16 14.02 13.54 15.00 0.37
ICICI Pru Bluechip Fund 38,734 22.63 15.09 25.07 14.38 14.53 13.99 0.39
Tata Large Cap Fund 1,557 21.27 12.32 24.32 13.21 13.05 14.77 0.36
Edelweiss Large Cap Fund 501 26.04 13.81 24.16 13.82 14.60 14.21 0.37
IDBI India Top 100 Equity Fund 655 20.92 12.40 24.14 14.58 13.36 14.97 0.36
Aditya Birla SL Frontline Equity Fund 23,273 21.12 12.52 24.10 12.80 12.89 14.64 0.36
Mahindra Manulife Large Cap Fund 255 19.19 11.49 23.76 14.57 0.35
Kotak Bluechip Fund 6,081 20.56 11.51 23.60 14.40 13.83 14.32 0.36
S&P BSE 100 – TRI 21.44 12.72 23.84 13.56 14.08 14.97 0.35

The securities quoted are for illustration only and are not recommendatoryReturns are point to point and in %, calculated using the Direct Plan-Growth option. Those depicted over 1-Yr are compounded annualised.
Data as on July 11, 2023
(Source: ACE MF)
Please note, this table only represents the best-performing funds based solely on past returns and is NOT a recommendation. Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not an indicator for future returns. The percentage returns shown are only for indicative purposes.

SBI Bluechip Fund has managed to keep pace with the benchmark and outperformed many of its peers in the long run. After witnessing a dull phase between 2018-19 and 2021, SBI Bluechip Fund registered strong growth in the last couple of years. In the last 1-year and 2-year period, SBI Bluechip Fund has generated a lead of around 1.5-3.5 percentage points over the benchmark and around 2 percentage points over the category average. Over the longer time period of 3 years, 5 years, and 7 years, even though SBI Bluechip Fund has trailed some of its peers, it has done well compared to the category average and the benchmark.

SBI Bluechip Fund’s volatility is reasonable when compared to its benchmark and the category average. In terms of risk-adjusted returns, as denoted by the Sharpe ratio, SBI Bluechip Fund has fared better than the benchmark and some of its prominent large-cap peers.

[Read: Are Large Cap Mutual Funds Falling Out of Favour?]

Investment strategy of SBI Bluechip Fund

Categorised under Large Cap Fund, SBI Bluechip Fund is mandated to invest a minimum of 80% of its assets in large-cap stocks. While the fund’s portfolio remains biased towards large-caps, it does make opportunistic allocations to mid-caps, but within the mandated limit. The fund manager aims to invest in large-sized companies having an established business presence, good reputation, solid brand equity, and which are possibly market leaders in their industries with less uncertainty in the top-line and bottom-line growth. The investment team also aims to keep an eye on consistency in management performance, change in leadership, and key management decisions, that can affect the outlook of the business.

SBI Bluechip Fund follows a blend of growth and value style of investing. The fund follows a combination of the top-down and bottom-up approach to stock-picking and choose companies across sectors.

SBI Bluechip Fund usually holds about 50-60 stocks in its portfolio and follows a buy-and-hold investment strategy, which reflects the strong long-term conviction the fund management has while picking stocks for the portfolio. Notably, the turnover ratio of the fund has been less than 20% in the last couple of years, indicating low churn in the portfolio.

Top portfolio holdings in SBI Bluechip Fund

Graph 2Graph 2

Holding in (%) as of June 30, 2023
(Source: ACE MF) 

As on June 30, 2023, SBI Bluechip Fund held a well-diversified portfolio of as many as 48 stocks. The top-10 stocks accounted for around 48.4% of the portfolio. HDFC Bank topped the list with an allocation of around 8.2%, followed by some other popular large cap names like ICICI Bank, ITC, L&T, Infosys, and Reliance Industries. Notably, the top portfolio holdings contain a good mix of stocks belonging to different sectors.

In the last two years, SBI Bluechip Fund benefitted the most from its prominent holdings in ITC, ICICI Bank, and L&T. Mahindra & Mahindra, Cummins India, Cholamandalam Investment & Finance Co., Bharti Airtel, HDFC Bank, and SBI were among the other stocks that added to its gains. However, Samvardhana Motherson International, Infosys, Divi’s Laboratories, Mahindra & Mahindra, and Shree Cement were among the stocks that eroded some of its gains.

About 34% of SBI Bluechip Fund’s portfolio is exposed to Banking and Finance stocks, of which Banks account for around 20.6% while Finance stocks account for 13.4%. The other core sectors in the fund’s portfolio include Engineering, Consumption, Auto, Pharma, Petroleum, Infotech, Textiles, and Cement, having allocation in the range of 3-10%. The top 5 sectors in the fund’s portfolio together account for around 69% of its assets. Though the portfolio is skewed towards cyclicals, it has fair diversification to defensives as well.


SBI Bluechip Fund holds a commendable performance track record over longer time periods. The fund focuses on maintaining a well-diversified portfolio of well-established large-cap stocks across sectors. The fund’s strategic minor allocation to mid-caps helps it generate significant growth during mid-cap rallies, leaving many other large-cap funds behind. Though the mid-cap allocation can expose the fund to a higher risk, the fund management makes sure that the risk is kept within limits.

SBI Bluechip Fund is completely benchmark agnostic, and its allocation to certain sectors may significantly deviate from the benchmark. Thus, the returns of the fund may not always be in line with the benchmark. However, with an experienced fund manager at the helm (Ms Sohini Andani) and sound risk-management techniques at the AMC level, SBI Bluechip Fund has the potential to show market-beating performance and create wealth for its investors in the long run.

SBI Bluechip Fund is suitable for long-term investors looking for stability as well as steady growth potential of Large Cap Funds.

Note: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

This article first appeared on PersonalFN here

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