State Bank of India (SBI) is one of the largest asset management companies in India managing assets worth over Rs. 4 lakh crore across different funds. On the equity side, SBI MF offers various schemes that cater to the diverse needs of investors. This includes funds focused on large caps, mid caps, small caps as well as hybrid funds. In this article, we will discuss one of their core equity offerings – the SBI Blue Chip Fund. But before that, let’s understand SBI MF’s balanced sbi equity hybrid fund that invests in both equities and fixed income.
1. About SBI Equity Hybrid Fund
Launched in 2005, the SBI Equity Hybrid Fund aims to provide long-term capital appreciation by investing in a mix of equity and debt instruments. As per its scheme mandate, it maintains an asset allocation of 65-80% in equities and 20-35% in debt. This balanced approach makes it suitable for investors looking for participation in equity upside along with some downside protection. Over the last 10 years, the fund has delivered an annualized return of 9.5% compared to the category average of 8.5%.
2. Investment Objective of SBI Blue Chip Fund
The primary goal of the SBI Blue Chip Fund is to generate long-term capital appreciation by investing in a portfolio of large-cap stocks. As per SEBI norms, at least 80% of the total assets are invested in the top 100 companies by market cap. The fund focuses on large established businesses with strong competitive positions, brands, and balance sheets. This helps capture the upside potential of industry leaders while providing stability in volatile markets.
3. Investment Approach
The fund manager follows a bottom-up stock selection process with a focus on quality, growth, and valuation. Companies are analyzed based on parameters like return ratios, industry leadership, earnings visibility, and management quality. Sectors/themes are identified based on their long-term prospects, demand-supply dynamics, and impact of policy reforms.
4. Performance of SBI Blue Chip Fund
Since its launch in 2003, the fund has consistently delivered superior returns compared to its benchmark Nifty 50 TRI and category averages. Over the last 3 years, it has given an annualized return of 16% versus the benchmark return of 13%. The 5 and 10-year returns were 14% and 13% respectively, outperforming broader markets. The fund was rated 5-star by Value Research, highlighting its ability to generate alpha over long periods of market cycles.
5. Comparison with other large-cap funds
While most large-cap funds have a similar investment mandate, SBI Blue Chip Fund stands out due to its focus only on the top 100 companies. This concentrated approach helps generate alpha by identifying hidden gems within the large-cap space. However, it also carries higher stock concentration risk.
Conclusion
In summary, the SBI Blue Chip Fund is a suitable investment for investors looking to build wealth over the long term through a portfolio of high-quality large-cap stocks. One can consider investing in this fund through 5paisa to benefit from low-cost transactions and systematic investment options. Backed by a seasoned fund manager and consistent track record, it has successfully delivered its objective of generating superior risk-adjusted returns.
