SBI Blue Chip Fund Direct Growth

As an investor, you can choose a large-cap mutual fund such as the SBI Blue Chip Fund Direct Growth. It was incorporated by SBI Mutual Funds in January 2013.

The fund is benchmarked against the S&P BSE 100 India TRI and holds the moderately low risk and expense ratio among the categories.

SBI Blue Chip Fund has completed 10 years from inception and currently holds an AUM of Rs. 43272.98 crore. The direct-growth plan has yielded 15.63% CAGR per year since its inception.

If you had invested 1 lakh in 2013, your fund would have grown to 4.0 lakhs in 2024.

The minimum lump sum to start investments in this fund is Rs. 5,000 and the minimum SIP (systematic investment plan) is Rs. 500 per month.

SBI Blue Chip funds comprise 4 plans,

• • Direct Growth Plan (We speak about this plan in this article)

• • Regular Growth 

• • Direct – IDCW (Dividend Plan)

• • Regular – IDCW (Dividend Plan)

Here we are sharing the complete details of this bluechip fund that could make any investor make the right decision before investing.

SBI Blue Chip Fund Direct Growth NAV:

The current NAV of SBI Blue Chip Fund direct growth is 84.50 (as of February 9, 2024).

The NAV of other plans of the same blue chip funds is

• • Regular Growth – 77.03

• • IDCW – Regular Plan – 43.82

• • IDCW – Direct Plan – 54.83

During the NFO period, all 4 plans had a NAV of Rs. 10. By the above distinction, you could find the Direct-Growth plan helps grow your funds at higher rates than other plans.

Regular plans are best if you need a professional to manage your fund.

SBI Blue Chip Fund Direct Growth Performance:

Blue Chip Mutual Funds is an open-ended scheme that invests in large-cap companies there are two options Direct and Regular Fund (Top 100 companies in the Indian share market per share of market capital).

This fund’s objective was to outperform the benchmark (S&P BSE 100 TRI) with comparatively low risk.

The fund has performed at a CAGR of 15.63% per annum since inception vs. 12.83% to S&P BSE 100 (benchmark). The category average has performed at a CAGR of 15.66%.

 

SBI Blue Chip Fund has underperformed its category average in the last 2 years of performance and outperformed its category average in the last 5 years of performance.

The fund has grown 51.2% higher than the Nifty 50 index since its inception (January 2013).

A short comparison of the fund’s performance with the benchmark and category average follows.

The fund has performed in 2 and 5 years returns with a CAGR of 13.42% and 16.92%, respectively.

In the past 2 years of performance, the SBI Blue Chip Direct Growth Fund has performed 1.27% lower than the benchmark and 1.24% lower than the category average.

In the last 5 years of performance, the SBI Blue Chip Direct Growth Fund has performed 0.08% higher than the benchmark and 0.19% higher than the category average.

Over the past year, this particular fund has shown lower performance compared to both its benchmark and category.

Once again, the performance calibration proves that this fund should be invested if your goal is mid or long-term to outperform the category average or benchmark.

Fundamental Analysis Ratios:

• • P/B – 4.72

• • P/E – 30.32

SBI Blue Chip Fund Portfolio:

The portfolio of this scheme includes Equity (95.7%), Debt (0.1%), and Cash (4.2%).

Equity Holdings (95.69% of total portfolio):

The fund holds 49 company stocks and is subdivided into three types of classes (as per market capital),

• • Large Cap Companies – 67.46%

• • Mid Cap Companies – 7.97%

• • Small Cap Companies – 1.86%

• • Others – 18.4%

Debt Holdings (0.12% of total Portfolio):

• • T-Bills – 0.12%

Fund Portfolio across Industries:

• • Financial – 27.1%

• • Automobile – 14.5%

• • Construction – 12.4%

• • Consumer Staples – 10.4%

• • Healthcare – 7.6%

• • Others – 28.0%

Top 20 Holdings:

• • HDFC Bank Ltd – 8.45%

• • ICICI Bank Ltd – 7.62%

• • Larsen & Toubro Ltd – 5.96%

• • ITC Limited – 5.00%

• • Infosys Ltd – 4.57%

• • Bajaj Finance Ltd – 4.47%

• • Reliance Industries Ltd – 4.20%

• • Britannia Industries Ltd – 2.88%

• • Page Industries Ltd – 2.73%

• • Divis Laboratories Ltd – 2.32%

• • Bharti Airtel Ltd – 2.28%

• • Eicher Motors Ltd – 2.23%

• • Sun Pharmaceuticals Industries Ltd – 2.10%

• • Hindustan Unilever Ltd – 2.06%

• • Cholamandalam Investment and Finance Co Ltd – 2.00%

• • Kotak Mahindra Bank Ltd – 1.98%

• • Mahindra & Mahindra Ltd – 1.91%

• • Shree Cement Ltd – 1.81%

• • Hindalco Industries Ltd – 1.74%

• • DLF Ltd – 1.67%

The Top 5 securities of this scheme cover 31.6% of the overall portfolio, and the Top 20 securities cover 67.98%

SBI Blue Chip Fund Direct Growth Risk Ratios:

Before investing in a mutual fund, it’s essential to analyze its risk ratio.

Standard deviation, Alpha, Beta, and Sharpe ratio are the parameters we usually calculate to predict the volatility and risk on returns.

Here are the details of the 3-year risk factors of the fund vs. category average.

• • Standard Deviation – 13.8 vs. 13.92

• • Alpha – (-) 0.69 vs (-) 0.26

• • Beta – 0.94 vs 0.94

• • Sharpe Ratio – 0.75 vs 0.75

The fund has moderately low risk compared to the category average and benchmark.

It also provides better risk-adjusted returns compared to the category average.

SBI Blue Chip Fund Expense Ratio:

The expense ratio plays a crucial role and impacts the performance of any mutual fund scheme.

The expense ratio or TER of SBI Blue Chip Fund Direct Growth is 0.85%.

The TER of the category average is 1%. This is an important reason why the fund has outperformed both the category average and benchmarks in the long term (5+ years).

Here is the expense ratio detail of the same fund with different plans,

• • Regular – Growth – 1.54%

• • Regular – IDCW – 1.54%

• • Direct – IDCW – 0.85%

So, the best plan to choose from this scheme is direct growth. The fund has zero exit loads when redeemed post 1 year and 1% if redeemed within 365 days.

Funds Similar to SBI Bluechip Funds:

Every mutual fund investor must know about the fund manager and their history.

Two managers manage this fund. Sohini Andani and Pradeep Kesavan.

Sohini Andani has been managing this fund since January 2013. Before joining SBI AMC, he worked at ING Investment Management Pvt. Ltd., ASK Raymond James & Associates Pvt. Ltd., LKP Shares & Securities Ltd., Advani Share Broker Pvt. Ltd., CRISIL, and K R Choksey Shares & Securities Pvt. Ltd. Apart from this fund, he manages 2 more schemes at Axis AMC.

Pradeep Kesavan has been managing this fund since December 2023. Before joining SBI AMC, he worked at Elara Capital, Accenture Strategy, Morgan Stanley, and 3i Infotech. Apart from this fund, he manages 40 more schemes at SBI AMC.

Most of the funds managed by these two gentlemen have a good track record of performance.

Conclusion:

• • The expense ratio of this fund is lower than the category average.

• • This fund is one of India’s top picks in large-cap mutual funds.

• • The SBI Blue Chip Fund is designed for investors with long-term goals like a dream home, retirement planning, a child’s higher education, and marriage.

• • Maintain moderately low-risk and better risk-adjusted returns compared to the category average.

• • Portfolios are well diversified within 49 equity securities and a few cash components.

• • The last five years’ performance are high compared to the benchmark and category average.

• • The fund manager has an outstanding track record