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SBI Blue Chip Fund: Well suited for conservative investor
Mon, Sep 22, 2014
Source : Citrus Interactive

SBI Blue Chip Fund invests in stocks of Blue chip companies i.e. in stocks of companies with market capitalization equal or more than the least market capitalized stock of BSE 100 Index. The Fund comprises of a well diversified portfolio of predominantly large cap companies, with steady growth potential opportunity. The fund was launched on January 2006 and it has been benchmarked against the S&P BSE 100. SBI Blue Chip is an equity diversified fund with monthly average assets under management at Rs 1090.39 crores, as on August 31, 2014.

Performance:
The fund has lagged against category average in the YTD, one year and five year time horizon. However, it has consistently beaten the benchmark index in the last 5 years.

Scheme Name

YTD

1-Year

3-Years

5-Years

Since Inception

SBI BlueChip Fund

34.74

59.76

22.58

13.59

10.71

S&P BSE 100

26.71

47.17

16.58

10.95

12.76

Category Average

38.2

68.45

20.19

14.99

NA

Rank

78/144

79/144

33/137

78/121

NA

Figures are in % as on Aug 31, 2014;


SBI Blue Chip Fund has had a mixed performance over the years. While the fund’s performance was better than the benchmark as well as the category average in 2012 and 2013 it has significantly underperformed in 2010. The fund performance was in line with the benchmark & category returns in 2009 & 2011.

Scheme Name

2009

2010

2011

2012

2013

SBI BlueChip Fund

87.9

11.89

-24.23

38.23

7.58

S&P BSE 100

85.04

15.66

-25.73

29.96

5.87

Category Average

88.06

19.44

-24.11

34.47

4.62

Rank

63/120

115/127

76/134

39/138

36/142

Figures are in % as on Aug 31, 2014;


Portfolio Characteristics:

Sector Concentration:  The fund concentration in the Top 3 sector is slightly higher than the category median but in case of the Top 5 and Top 10 the fund concentration is below the category median.

Scheme Name

Top 3

Top 5

Top 10

SBI BlueChip Fund

38.04

47.95

66.33

Category Median

36.55

48.57

68.33

Company Concentration:  The company concentration of the fund is fairly diversified and is line with its category median.

Scheme Name

Top 3

Top 5

Top 10

SBI BlueChip Fund

17.08

25.88

41.75

Category Median

16.92

25.36

42.53


Risk Measures:
  The fund has a Standard Deviation lower than the category median due to its focus on large cap stocks which are less volatile. However, the Beta (measured over last three years) of the fund is almost same as the category median.

Scheme Name

Standard Deviation

Beta

SBI BlueChip Fund

0.895

0.829

Category Median

0.9403

0.8291

 Risk adjusted Returns:  The risk adjusted return for the fund in terms of Sharpe and Treynor ratios (measured as average of last three years), is higher than the category median.

Scheme Name

Sharpe

Treynor

SBI BlueChip Fund

0.0932

0.0979

Category Median

0.072

0.0786

 
Process:

SBI Blue Chip Fund is an open ended growth scheme which is a pure equity diversified fund. This fund invests in equity stocks of companies whose market capitalization is at least equal to or more than the least market capitalized stock of BSE 100 Index. This fund has a mandate to invest a minimum of 70% of its portfolio into Indian equities and has the flexibility of investing up to 30% of its portfolio in debt & money market securities.

The fund has an expense ratio of 2.24% which is lower than the category average of 2.54%. The minimum investment size for this fund is Rs.5000 and has an exit load of 1% for exit within 1 year from the date of allotment.

Portfolio:
SBI Blue Chip Fund currently holds 50 stocks in its portfolio which is slightly higher than the category median of 47 stocks in the diversified equity segment. The fund has on an average held 48 stocks in its portfolio for the last three years. The fund largest exposure is in the financial services sector amounting to 24% of its portfolio. Out of 50 stocks 31 stocks are from cyclical categories. The fund has 10 stocks from the service sector which accounts for about 20% of the fund. The fund currently has cash and cash equivalents at 3.5%. The top five holding accounts for 26% of the portfolio comprising HDFC Bank, Tata Consultancy Services, Motherson Sumi Systems, Maruti Suzuki and ICICI Bank.

Fund Manager:
Sohini Andani has been managing SBI Blue Chip Fund since September 2010. She has more than 18 years of experience in the field of financial services having joined SBI Funds Management Pvt. Ltd. as the Head of Research in October 2007 and appointed as Fund Manager in May 2010. Prior to joining SBI Funds Management she was with ING Investment Management Pvt. Ltd. as a senior analyst. She has also worked with ASK Raymond James &Associates Pvt. Ltd, LKP Shares & Securities Ltd, Advani Share Brokers Pvt. Ltd, CRISIL & K R Choksey Shares & Securities Pvt. Ltd. handling primarily equity research responsibilities. She is currently managing SBI Blue Chip and SBI Magnum Midcap schemes.

View:
SBI Blue Chip Fund has had a mixed performance over the years with periods of above average performance in CY 2012 and 2013 and relatively subdued performance in CY 2010 and CY 2014 YTD. This fund suits the need of low risk appetite investors as the fund’s focus is mainly investing into companies with large market cap that holds steady growth potential. In a rising market, the mid cap funds end up outperforming the large cap funds. However, many investors do not have the appetite for volatility in the NAVs of these funds and will be more comfortable with the steady performance of a large cap fund which manages to consistently beat the benchmark. If the portfolio of the fund is made of good quality stocks from the performing sectors of the market it’s an added comfort. SBI Bluechip scores on both these counts and is therefore a good choice for such investors.

 
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