SBI Bluechip Fund: Fund review

Earnings growth being restricted to only few sectors has restricted the scope for new investment ideas across market capitalisations. The difficulties are compounded by the not-so-encouraging improvement in private capital expenditure in recent years. In such a situation, it makes sense to focus on large-sized companies, which offer stability to the portfolio.

Dominant market share, high return ratios, steady cash flows, consistent dividend paying record and relatively better balance sheets ensure consistency in earnings. For conservative investors, these factors are important as they ensure that share prices of large-sized companies is not as volatile as mid and small-sized companies.

Among large-cap schemes, investors can consider SBI Bluechip with an investment horizon of at least five years. A key characteristic of the scheme is that it stays away from momentum stocks and focuses on themes which do well only in the long-term.


Besides its low expense ratio, the scheme’s fund manager Sohini Andani has been focusing on companies that have certain distinct advantage even among large-sized companies. For instance, Andani has invested in Shree Cement due to its cost efficiency even if it is not the largest cement manufacturer.

In the past five-year and ten-year periods, the scheme has given 13% and 12% returns, respectively while peers in the same category have given average returns of 10% and 11% returns, respectively.

Portfolio Change (Past 6 months)

Complete Exits	Increase in Allocation
The Ramco Cements Tata Steel	Cummins India
Bharti Airtel Solara Active Pharma Science	Axis Bank
Indusind Bank Titan Company	Interglobe Aviation

Returns (in %)

Period	CAGR Return	SIP CAGR Return	Market Cap Fund - Average CAGR Return (%)
1 Year	5.21	15.31	6.00
3 Year	10.39	9.22	11.54
5 Year	13.20	10.80	9.91

Returns Peer Comparison (in %)

Schemes	1-Year	3-Year	5-Year
Aditya Birla Sun Life Focused Equity	7.17	11.63	10.67
JM Core 11 Fund	6.20	15.30	12.13
Mirae Asset Large Cap Fund	10.87	15.77	14.88

Source: Accord Fintech, complied by ETIG database

Expert Take
Harshvardhan Roongta,CFP, Roongta Securities
The scheme follows a combination of value and growth style of investing. Its conservative investment decisions has led to its under performance during sustained bull runs when compared to its peers and benchmarks in the recent past. However, it has been an outperformer over longer periods of time when markets complete two to three cycles.