Indiabulls Blue Chip Fund - Growth Option: Great Returns in Last 3 Years

Indiabulls Blue Chip Fund - Growth Option: Great Returns in Last 3 Years

Apr 10, 2018

The purpose of investments in mutual funds varies depending on the feasibility of investment and the expectation of the investor. Various types of mutual funds help to cater these varied requirements. For few, the expectation from investment is to get short term and higher dividends while others prefer investing in funds which provide a lesser but stable dividends over a sustained period of time. Equity large cap funds are better options for anyone looking at longer and sustained returns on investment.

Equity Large cap funds, as the name suggests invests a major share of the corpus in companies which have large capital. These companies, apart from having larger capital have resources and policies in place which helps them to deliver consistent growth as well as have the ability to tide over the market fluctuations. The major drawback of investing in large cap funds is that the dividends are in general not as high as small or medium cap funds. However the consistency of providing dividends over a sustained period of time make them a good choice for those investors who are looking at investing in less risk options irrespective of the lower dividends.

Indiabulls Blue Chip Fund - Growth Option – Overview

India Bulls Blue Chip Fund – Growth option is a Equity Large cap fund which was launched on 10-02-2012. The minimum investment in the mutual fund is Rs. 500 with a further minimum of top up Rs. 500. The objective of the fund is to have a long term appreciation by investing in a portfolio which largely comprise of large capital and blue chip companies.

Banks, Petroleum products, Auto and Finance are the major sectors into which most of the corpus of the India Bulls Blue Chip Fund are invested into. These sectors contribute to nearly 44 % of the total investment with each of these sectors occupying a share of around 11 % each. Cement, consumer durables, gas and construction projects are the other sectors which have a good share of investments with these four sectors forming more than 20% of the investment. In line with the objective the fund has its investments in few of the major large capital blue chip companies. Reliance Industries ltd, Maruti Suzuki India, HDFC Bank, Housing Development Finance Corp, L&T are few of the major companies into whose equity this fund has invested in. Other large cap company equities into which the fund has invested includes NBCC (India) ltd, Indian Oil Corporation Ltd, Avenue Supermarts Ltd etc. Nearly 50% of the corpus is invested in other large cap companies which enables the distribution of risk as well as earn dividends from a wide range of companies.

Performance of Indiabulls Blue Chip Fund - Growth Option

The fund is considered to be higher on the risk in the Equity Fund Large Cap category, however has ensured to deliver consistent high dividends in comparison to the average performance of the category.

Source: Swaraj Wealth Research

The 3-year returns of 9.2 % are considerably higher than the 6.85% returns of the Equity Fund Large Cap category and the 5.68% returns of CNX Nifty. The 1-year return offered by this fund is also marginally higher than the returns of the category and CNX Nifty.

The year one year performance of the fund has been consistent and over the last three years has been performing better than the average performance of the category.

Source: Swaraj Wealth Research

The fund showed a strong performance especially in 2017 with a performance growth of 33.26% which is higher than the growth of CNX Nifty as well as the average growth of the category.

Rolling returns are good way to ascertain the frequency as well as the magnitude of the investments over a period of time. The periods of higher performance as well as lean periods can be identified by studying rolling returns. It helps to have a more holistic understanding of the fund and not being influenced by the recent performances.

Source: Swaraj Wealth Research

The performance of Indiabulls Blue Chip Fund over the period of March 2015 – Mar 2018 is at 9.20% which is much higher than the Equity fund large cap Category’s performance of 6.82% over the same period of time.

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