If you’re a risk-averse investor looking for consistent returns, blue chip funds such as the Axis Blue chip fund are great options.
This article will discuss everything you need to know about blue chip funds, including what they are, where they invest, the average returns they provide, and more.
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Table of Contents
- Can you explain what blue chip mutual funds are?
- What are the advantages of investing in bluechip mutual funds?
- How blue-chip mutual funds are taxed
- Is investing in the AXIS Bluechip Fund worth it?
- Wrapping up
Bluechip investment funds are those which put money into firms that maintain substantial market shares, renowned brand recognition, and vast amounts of experience on the market. Generally stable and providing sound returns as well as dividends, these companies may also be referred to as large-cap funds.
Primarily, bluechip mutual funds invest in the top large-cap companies. Per AMFI or SEBI guidelines, there is no exact categorization for blue chip funds; they are seen simply as large-cap funds.
Basically, the largest 100 organizations by market capitalization in a country typically make up these large-cap corporations and the bluechip investment funds invest mainly in a handful of these high-ranking companies.
These open-ended equity funds invest at least 65% of their assets in the equity and equity-related instruments of the bluechip companies.
If you’re wondering why investing in bluechip mutual funds is beneficial, there are many reasons why adding them to your portfolio makes sense –
- Reliable returns: Bluechip mutual funds focus on very secure companies. Therefore, the profits produced by these funds are also quite stable. In the equity fund sector, while there are unstable yet high returns, blue chip mutual funds offer moderate gains, but these funds can be relied upon. Rarely has it been that these funds did not provide good yields.
- Low-risk option: Equity funds can be very risky, except for Bluechip funds. The risk is decreased greatly due to the large market capitalization and brand value that come along with blue chip companies, allowing them to stay stable even during turbulent markets. Thus, blue chip mutual funds are optimal investments for investors who wish to minimize their risk.
- When it comes to long-term investments, these Bluechip mutual funds are comparable to the tortoise in the rabbit and tortoise race; slow yet reliable, which always triumphs. If you are intending to invest for a prolonged period of time, these mutual funds might be suitable for your collection. You can anticipate generating high yields with an average tenure of 7 years in such funds.
- If a fund invests in very well-known, highly capitalized companies, liquidity is practically guaranteed – making blue chip mutual funds easy to liquidate.
- Bluechip mutual funds provide a means of diversifying portfolios. Take the Axis Bluechip fund from Axis Mutual Fund, for example. This fund invests in top companies across various sectors, such as in banking and finance (ICICI Bank Ltd., HDFC Bank Ltd., Bajaj Finance Ltd.), computer/IT (Infosys Ltd.), energy/refining (Reliance Industries Ltd.), and even construction/engineering (L&T).
- A blue-chip mutual fund can help you spread out your investments without a lot of extra effort; therefore reducing your risk while increasing optimized profits from a well-diversified portfolio.
In accordance with the existing tax rules and rates, if you redeem a fund within one year of purchase, 15% short-term capital gain taxes plus surcharge and cess will
The Axis Bluechip Fund, an axis Mutual Fund provided blue-chip mutual fund, has seen a yearly return of 15.55% due to its initiation, when the category average was 13.90%. Not only that, it supplied an impressive 16.41% return per annum for the past three years.
Under current circumstances, 87.49% of its investments lie in equities and equity-related instruments with 75.04% bought up in large-cap stocks. Those looking towards a long-term investment might find this fund to be a well-suited option. The cost ratio is 0.52%, yet the subject matter is to shift contingent on the mutual fund house’s strategy.
Many investors prefer bluechip funds due to their higher returns than other equity funds, yet low-risk level. Their consistent returns make them an attractive choice for investors.
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