Sundaram Bluechip Fund Review


Sundaram bluechip fund, which the NFO period closed yesterday. After so many articles on IPO’s in September thought of shifting our sight toward the mutual fund.

We always say, does an investor start from the share market? No, they should learn about equity with the help of mutual funds. Which, bluechip comes under the best 100 stocks in the Indian share market.

The advantage of bluechip stocks are one which is,

  • Well established.
  • Performed across any market condition.
  • Steady fundamental and business growth.
  • Healthy Market Capital.
  • Will have high Excess liquid cash
  • Low debt
  • High Dividend or Bonus paying companies.

It will be difficult for an investor to pick bluechip stocks, but need a steady and comfortable return. In such a case, blue chip funds will be a perfect option.

Earlier, we have written an article about axis bluechip fund vs ICICI bluechip fund. Kindly have on the same for better understanding of

·       What is the bluechip fund?

·       How they perform when compared to the Nifty Index

·       How much volatile they have compared to Nifty Index

Sundaram Blue Chip Fund:

Sundaram Mutual Fund Asset Management company has come up with many equity and debt funds in a recent time frame. Recently, they launched the Sundaram Balanced Advantage Fund during the COVID-19 Crash as NFO. The fund is currently performing well with low volatility.

In the same way, they have launched a best fund plan on bluechip stocks in India. The fund is an Open-Ended equity scheme, which strategies,

·       Predominant diversification in large cap stocks.

·       Investing in Mid Cap Stocks of up to 20%.

·       More diversified about 45-50 stocks.

This type of funds are a useful investment material for long term investors who looks for,

·       Conservative return about 10-14% returns per year.

·       Who looks for investing in dominant large cap funds.

·       Low volatility than the index and moderate risk in investment.

Plan Model of Sundaram Blue Chip Fund:

·       The funds have taken its benchmark as NIFTY 100 TRI.

·       The funds have both Growth and Dividend Options. Also, Direct and regular plans.

·       Minimum SIP (Systematic Investment Plan) to invest is Rs. 100 per month.

·       Quarterly SIP can be started by investing a minimum of Rs. 750.

·       Entry Load – 0%.

·        Exit Load – 1%, if redeemed within 1 year of investment.

·       The SWP (Systematic Withdraw Plan) can be started with Rs. 1000.

·       The STP (Systematic Transfer Plan) can be started with Rs. 100 per month, Rs. 750 per quarter, and Rs. 1000 weekly.

·       The allocation of funds will start by 8th October 2020. During the NFO period you will be getting 1 Unit of NAV for Rs. 10.

Industry Average – Blue Chip Funds

·       Expense Ratio for Direct plan – 1.22%

·       Expense Ratio for Regular plan – 2.24%

·       The Category average of bluechip funds returns are

§  1 years – (1.43%) negative return

§  2 years – 3.15%

§  3 Years – 4.06%

§  5 Years – 7.69%

§  7 years – 11.23%.

· Category average Risk Management

§  Standard Deviation – 18.33

§  Beta – 0.87

§  Sharp Ratio – 0.05

§  Treynor’s Ratio – 0.01

§  Jension’s Alpha – (1.51)

·       Number of holding (category average) – 43.53 stocks.

·       Category average turnover ratio is 167.46%.

Fund Manager History:

1. Mr. Rahul Baijal

 Rahul joined Sundaram mutual fund in July 2016. He works as Senior Fund manager in Equity section. Prior to Sundaram mutual funds, he worked with Bharti AXA life insurance, TVF Capital, HSBC Securities, Credit Suisse Securities, and standard chartered bank.

In the journey with Sundaram mutual fund, apart from Sundaram bluechip fund, he also takes care of

·       Sundaram Select Focus Fund

·       Sundaram Equity Hybrid

Both these funds have performed a CAGR of 8.9% in 5 years which is above the category average.

As a fund manager, he has done a good job in maintaining the performance over the benchmark and category average.

2. Mr. Krishna Kumar S

He joined Sundaram Mutual Fund in 2002, and working as Chief Investment Officer.

He also manages other funds. Such as

·       Sundaram Mid Cap Fund

·       Sundaram large and Midcap fund

The midcap fund has performed at a CAGR of 5.8% in 5 years. Large and Midcap Fund has performed at a CAGR of 9.6%.

Both the funds are well managed by the fund manager to beat the category average and nearly 9% return is decent for investors who look for mid and long term.

Insights for Investors:

·       The Expense ratio has not yet been revealed we can expect to be somewhere around 0.8-1.3%

·       This fund is completely focused for long term investor.

·       You should be conservative in expecting the return. Over a long period of more than 7 -10 years, many bluechip funds have performed more than 14%.

·       So, your expectation should be 10-12% which is a good one for the long term like more than 20 years.

·       When you have a conservative approach to your expectation, you won’t bleed at the end.

This is the launch period of the fund. After 1 year, we will try to come with the performance and risk management review.