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 that has shown a mixed trend in terms of outperformance and underperformance over different market phases in the past. Focusing on quality stocks, the fund has managed to generate satisfactory returns over the long run.

What is the growth of Rs 10,000 invested in SBI Bluechip Fund five years ago

Past performance is not an indicator of future returns
Data as of January 06, 2025
(Source: ACE MF, data collated by PersonalFN) 

Launched in February 2006, SBI Bluechip Fund is the second largest scheme in the Large Cap Mutual Fund category having an AUM of Rs 50,502 crore. While SBI Bluechip Fund 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, the fund’s performance hit a rough patch in 2018-2019 and 2023-24. This impacted the fund’s cumulative returns. Regardless, with a focus on creating a diversified portfolio of fundamentally sound stocks, SBI Bluechip Fund has proved its potential to bounce back with superior gains. While the fund’s credible long term performance record has come under the supervision of its erstwhile star fund manager, Ms Sohini Andani, the fund is now managed by Mr Saurabh Pant. Despite the change in leadership, SBI Bluechip Fund is expected to continue its value conscious approach to pick quality and growth-oriented stocks.

Despite the recent muted growth, SBI Bluechip Fund’s performance is competitive to the benchmark. The fund’s CAGR over the last 5 years is around 17.3%, which is nearly in line with the 17.2% 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 22,193.

How has SBI Bluechip Fund performed on a rolling return basis?

Scheme Name	Corpus (Cr.)	1 Year	2 Year	3 Year	5 Year	7 Year	Std Dev	Sharpe
Nippon India Large Cap Fund	35,313	37.84	28.60	23.89	20.62	17.13	13.55	0.33
HDFC Large Cap Fund	36,587	33.50	25.02	20.60	18.18	15.18	13.09	0.27
ICICI Pru Bluechip Fund	63,938	36.74	25.16	20.51	20.12	16.58	12.51	0.28
Aditya Birla SL Frontline Equity Fund	29,323	31.39	21.31	17.01	17.90	14.20	13.23	0.21
Kotak Bluechip Fund	9,498	31.90	21.78	16.94	19.33	15.84	13.27	0.22
Canara Rob Bluechip Equity Fund	14,824	31.56	21.27	16.24	20.02	17.25	12.82	0.22
SBI BlueChip Fund	50,502	26.05	19.84	15.82	17.83	14.42	12.70	0.20
Mirae Asset Large Cap Fund	39,555	25.31	17.40	14.19	16.69	14.70	12.93	0.16
UTI Large Cap Fund	12,860	27.11	17.51	14.10	17.35	14.61	13.53	0.13
Axis Bluechip Fund	33,547	27.63	15.87	11.26	15.49	15.53	13.76	0.09
BSE 100 – TRI		29.63	20.17	16.50	17.87	15.29	13.76	0.19

The securities quoted are for illustration only and are not recommendatory.
Returns are on a rolling basis and in %. Direct Plan-Growth option. Those depicted over 1-Yr are compounded annualised. Risk ratiosare calculated over a 3-year period assuming a risk-free rate of 6% p.a.
Data as of January 06, 2025
(Source: ACE MF, data collated by PersonalFN)
Please note, this table only represents the best-performing funds based solely on past returns and is NOT are commendation. 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. The fund witnessed a dull phase between 2018-19 and 2023-24 which has resulted in significant underperformance of the scheme compared to several prominent peers. On a rolling returns basis in the last 1 year, SBI Bluechip has trailed the category average by around 7 percentage point, but has managed to match the benchmark’s performance. Over the longer 5-year and 7-year time frames, the fund has managed to generate returns broadly in line with the category average.

SBI Bluechip Fund’s volatility is among the lowest in the category and is lower the benchmark. In terms of risk-adjusted returns, as denoted by the Sharpe ratio, the fund has fared slightly better than the benchmark and stood strong when compared to the category average.

[Read: Equity, Debt, and Gold – Performance Review and Investment Outlook for 2025]

What is the 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 also makes 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, changes 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’ approaches to pick stocks 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 in the range of 30-40% in recent months, indicating low churn in the portfolio.

What are the top portfolio holdings in SBI Bluechip Fund?

Holding in (%) as of November 30, 2024
(Source: ACE MF, data collated by PersonalFN) 

As of November 30, 2024, SBI Bluechip Fund held a well-diversified portfolio of 45 stocks. The top 10 stocks accounted for around 57% of the portfolio. HDFC Bank topped the list with an allocation of nearly 10%, followed by some other popular large-cap names like ICICI Bank, Axis Bank, Cipla, and Bharti Airtel. Notably, 6 out of the top 10 stocks in the fund’s portfolio belong to the Banking & Finance segment. The fund also invests about 10-15% of its assets in stocks of mid-sized companies for diversification.

In the last two years, SBI Bluechip Fund benefitted the most from L&T, Mahindra & Mahindra, ICICI Bank, and Divi’s Laboratories. Meanwhile, Bharti Airtel, ITC, Max Healthcare Institute, DLF, SBI, Thermax, Samvardhana Motherson International, Sun Pharma, HDFC Bank, and Godrej Properties were among the other stocks that added to its gains. However, its holdings in Axis Bank, Cummins India, Cipla, Ultratech Cement, and Bajaj Auto among others, eroded some of its gains.

Around 29% of SBI Bluechip Fund’s portfolio is exposed to Banking and Finance stocks, of which Banks currently account for around 23.5% while Finance stocks account for about 5.8%. The other core sectors in the fund’s portfolio include Consumption, Infotech, Auto, Engineering, and Pharma having allocation in the range of 6.5-10%. The top 5 sectors in the fund’s portfolio together account for nearly 60% of its assets. Though the portfolio is skewed towards cyclicals, it has fair diversification to defensives as well.

Is SBI Bluechip Fund suitable for my investment goals and risk tolerance?

While SBI Bluechip Fund has shown a mixed trend in terms of outperformance and underperformance over various 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.

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. While the fund’s erstwhile star fund manager, Ms Sohini Andani, has recently quit, the current fund manager Mr Saurabh Pant too comes with a reasonable experience and has been associated with the AMC since 2007. Backed by 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.

Watch this video to explore the best performing Large Cap Funds to watch out for in 2025:

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. Registration granted by SEBI, Membership of BASL and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.

The securities quoted are for illustration only and are not recommendatory.

This article first appeared on PersonalFN here