Investor Education
What are Blue chip mutual funds : Explore Top Funds, Type & Benefit
You must have heard about blue chip mutual funds from many fund managers, advisors, and even from your investors.What is the blue chip fund? Why everyone around you is interested in the Bluechip fund? To get all your questions answered and know more about what is bluechip fund, how it works, types of bluechip funds, and why most investors are interested in this particular fund.
What is a Bluechip Mutual fund?
An equity scheme which provides investors with a portfolio of stocks that offer stability and the best performance in all aspects. Such funds won't make a lot of cash in a bull market but additionally don’t lose an excessive amount in a better marketplace. Hence they may be beneficial in an emergency, provide a great portfolio, and reduce risk in every situation. The shares of a blue-chip fund are in agencies which have generated strong and solid yields for their investors for a long period of time. The risk aspect with such funds is quite low and returns are high in this respect.
This blue-chip fund has less risk as compared to other companies as this fund invests in the stocks of big companies which has less probability of failing and provides the best returns on your investment. These big companies consist of McDonald’s, Nike, and Microsoft, which are at the top of this industry.
Type of Bluechip Mutual Fund
The blue-chip fund is categorized into two types:
These two types are the ones which provide you best returns with low risk as these two funds in particular invest in big companies who have bigger corpus and high growth rates is high.
Here is a brief about large cap funds and index funds.
Top Large cap Mutual fund
A Large-cap mutual fund is a fund which typically invests in top 100 companies stocks. These funds protect the investors from the mid-size and small-sized fund’s risk. Large-cap mutual fund has the ability to provide high returns with low risk.
| Fund Name | 3 Yrs | 5 Yrs | 10 Yrs |
| Nippon India Large Cap Fund - Growth | 24.67 | 15.39 | 16.8 |
| Mirae Asset Large Cap Fund Regular Growth | 15.27 | 13.21 | 16.38 |
| SBI Bluechip Fund Regular Growth | 16.99 | 14.51 | 15.46 |
| ICICI Prudential Bluechip Fund Growth | 19.9 | 15.47 | 15.46 |
| HDFC Top 100 Fund Growth | 22.05 | 14.3 | 14.82 |
Top Index Mutual Fund
The same assistance provided by the Index mutual fund as an index mutual fund is a passive fund which doesn’t try to beat the market. This particular fund provides an immense portfolio with high returns and low risk.
| Fund Name | 3 Yrs | 5 Yrs | 10 Yrs |
| UTI Nifty 50 Index Fund Regular Plan Growth | 16.83% | 14.05% | 13.46% |
| Bandhan Nifty 50 Index Fund Growth | 16.43% | 13.91% | 13.43% |
| ICICI Prudential Nifty 50 Index Plan Regular Growth | 16.60% | 13.77% | 13.11% |
| HDFC Nifty 50 Index fund | 16.67% | 13.83% | 13.38% |
| Tata Nifty 50 Index Fund | 16.42% | 13.61% | 12.88% |
Why investors are interested in the blue-chip Mutual fund?
- Most of the blue chips are also available in Futures & Options so it is also possible to hedge these positions using futures or options to reduce equity risk.
- There are several reasons for the investors to be interested in such blue chip stocks. Here are a few popular reasons why investors prefer such blue chip stocks.
- Most blue chips have established brand names and that ensures much better standards of corporate governance and commitment to the business.
- Blue chips may not be high return generators like the mid-caps and small caps but they are lower on the risk scale compared to mid-caps and small caps.
- It logically follows that those blue chips have a tendency to assist in diversifying the portfolio and reduce the chance within the portfolio by way of introducing balance.
- Blue chips have usually demonstrated track records like most Tata Companies have been around for over one hundred years.
- Most of the blue chips have a solid dividend charge policy which makes them extra predictable in terms of shareholder return expectations.
- Blue chips are extremely liquid within the marketplace and subsequently, those blue chips may be sold and sold in massive portions which makes MFs and FIIs inquisitive about them.
- Since most of those blue chips are closely tracked via the analysts and fund managers, there's more experience of cause and performance in them.
Advantages of blue chip funds
- Capital improvement: You can expand considerable capital over the long haul by investing in blue chip finances. Investing in an agency with a robust music document creates the scope for creating a stable portfolio. Additionally, it gives stability at some point of unpredictable stock marketplace conditions.
- Monetary intention: Investing in a blue chip fund fulfills the objective of undertaking lengthy-term financial dreams.
- Economic moat: Blue chip corporations may additionally gain from a monetary moat in light of their scale. The competitive gain of blue-chip agencies over different corporations equates to a big percentage marketplace and enables the accomplishment of lengthy-term profits that beat inflation.
- Liquidity: Blue chip price range can be redeemed each time you need to get out of the economic litter. You also can follow for a loan in opposition to blue chip fund gadgets.
How do blue chip funds work?
Blue chip businesses have a robust economic track record, which permits buyers to take advantage of them. Most of the blue chip price range's holdings are stocks of the pinnacle-a hundred market-cap groups. These finances also can be invested in bonds and coins equivalents to diversify the portfolio. Blue chip agencies have an extended spectrum for funding. Thus, the cost of the blue-chip mutual fund is much better.
Who should invest in blue chip Mutual funds?
Before investing in a fund you should always see whether it is suitable for you or not. Will you be able to tolerate its risk and is this fund able to fetch your goals?
Investors who wish to invest in India’s top companies:
Large Cap groups are said as market leaders with successful business models. These are typically professional, trustworthy, and nicely hooked-up firms inside the marketplace. So when you invest in a Large Cap Fund, you come to be a part-owner in numerous top organizations in India.
Investors who want to invest in less volatile funds:
Large cap Funds spend money on well-installed and frontline businesses across exclusive sectors.These groups have robust and resilient enterprise models, great marketplace percentages, stable supply chains, and so on. So huge-cap corporations are higher positioned to withstand market corrections and challenging financial situations as compared to mid-cap or small cap groups.Thus, Large Cap Funds are suitable for you in case you want to benefit from the boom in equity but do not want to witness too much volatility.
Investors who have a desire to build a good portfolio.
You can have Large Cap Funds because the middle a part of your portfolio. While those funds will offer barely much less returns than smaller organizations all through marketplace rallies, they are able to still offer double-digit returns with surprisingly much less fluctuations.
Taxation on blue chip Mutual fund
Blue chip funds acquire equal tax treatment as other equity assets. Capital gains earned at the protecting length of much less than a year are said as short-term capital gains (STCG). This entice is 15% tax. On the other hand, profits made on investments held for more than a year are tagged as long-time period capital profits (LTCG). According to the prevailing tax rate, there may be no tax on LTCG till? 1 lakh in a financial year. The amount exceeding this restriction is taxed at 10% without indexation gain.
How to invest in blue chip Mutual fund on funds?
Investing in ZFunds is quite easy, just follow some steps and get your investments in Zfunds:
- To invest in Zfunds, the best mutual fund app! you need to install the particular app.
- After installation, you need to log in to the Zfunds app with your credentials
- Once your login is done, you can select your desired fund.
- As soon as you have selected your desired fund, you can start your SIP or lumpsum whatever you feel is more favorable to your financial goals.
- Then with some steps, you can start investing and build your portfolio with ZFunds
In any case, if you need any assistance, you can immediately Whatsapp us. We provide a personalized assistance to our valuable customers.
Last few words
Investing in India's best blue chip mutual funds is sensible for investos looking for balance, boom capacity, and publicity to financially robust businesses. To make discerning judgments, do significant observation before investing and considering non-public economic goals. The investment strategy can be stepped forward in addition by consulting with the mutual fund advisor, who can help it healthy with particular goals and risk tolerance.