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SBI BlueChip Fund: Consider for betting on bluechips
Mon, Nov 02, 2015
Source : Khyati Shah, Citrus Interactive

SBI BlueChip Fund is a large cap equity diversified fund.  The scheme invests in a diversified basket of 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 universe of stocks is referred to as bluechips. The fund was launched in January 2006 and is benchmarked against the S&P BSE 100 Index. The fund has an AUM of Rs. 2,717 crore as on September 30, 2015 which has gone up by Rs. 40 crore as compared to August 31, 2015 (2,677 crore).

Performance:

The fund has performed reasonably well across different time horizons as seen in the table given below. In the time horizon of 6 months, year-to-date (YTD), 1, and 3 years the fund has outperformed its category average and its benchmark. In the 2 year time period it outperformed the benchmark but not the category average. The outperformance margin vis-à-vis its benchmark has been substantially high.

 

6 Months

YTD

1 Year

2 Years

3 Years

Since Inception

SBI BlueChip Fund

-1.99

5.54

15.81

35.97

24.26

11.22

S&P BSE 100 Index

-9.71

-2.97

1.3

22.07

15.64

10.93

Category Average

-3.17

2.27

14.74

38.12

23.82

NA

Rank

59/160

35/158

64/157

70/149

56/146

NA

 Figures are in % as on Aug 31, 2015; Returns above 1-year in Compounded Annual Growth Rate

 

When we look at the calendar year returns it’s quite clear that this fund has substantially beaten its benchmark in each of the last five calendar years. The only year when it lagged behind was 2010, when it underperformed by 377 basis points. The outperformance margin vis-à-vis its category average is substantially high in 2012, 2013 and 2014. The fund provided downside protection to its investors in the declining market of 2011, beating its benchmark by 151 basis points.

 

 

2010

2011

2012

2013

2014

SBI BlueChip Fund

11.89

-24.23

41.89

11.89

97.6

S&P BSE Small-Cap Index

15.66

-25.33

29.96

5.87

32.28

Category Average

19.54

-24.07

34.15

5.26

54.2

Rank

121/132

82/139

40/143

45/147

83/150

 All figures in %

 

Portfolio Characteristics:

Risk: In terms of measures of risk such as Standard Deviation and Beta (measured over last three years), the fund has taken slightly lower risk compared to the category median.

 

 

Standard Deviation

Beta

SBI BlueChip Fund

0.88

0.86

Category Median

0.94

0.88

 

Risk-adjusted Returns: In terms of measures of risk such as Treynor & Sharpe (measured over last three years), the fund has taken slightly higher risk compared to the category median.

 

 

Treynor

Sharpe

SBI BlueChip Fund

0.09

0.09

Category Median

0.08

0.08

 

 

Sector concentration: The concentration of the fund in the top three, five and 10 sectors is much higher than the category median.

 

 

Top 3

Top 5

Top 10

SBI BlueChip Fund

40.53

56.1

77.66

Category Median

36.9

50

70.69

 

Company concentration: The fund’s concentration in top three, five and ten companies in its portfolio is much higher than the category median.

 

 

Top 3

Top 5

Top 10

SBI BlueChip Fund

20.24

30.42

48.17

Category Median

18.87

27.39

44.88

 

Processes:

SBI BlueChip Fund invests in stocks of bluechip companies, that is, in stocks of companies with market capitalization equal to or more than the least market capitalized stock of S&P BSE 100 Index. These companies have large business presence, good reputation and are possibly market leaders in their industries. The fund comprises a well-diversified portfolio of predominantly large-cap companies, with steady growth potential opportunity. The investments are limited to stocks with market capitalization equal to or more than the least market capitalized stock of S&P BSE 100 Index. SBI BlueChip Fund generally invests in large reputed Indian companies.


Number of equity holdings: The fund currently holds 51 stocks in its portfolio (August 31, 2015). This is much higher than the median for the diversified-equity category, which currently stands at 47. Thus, the fund holds a more diversified portfolio than its peers in terms of number of stock holdings.

Over the past five years the fund has always had a diversified portfolio with the number of equity holdings over this period averaging 38.07.

 In the month of August 2015, stocks of Mahindra & Mahindra Ltd. and Sadbhav Engineering Ltd. were brought whereas the stock of HCL Technologies Ltd. was sold. The top 5 sectors in the portfolio had an allocation of 56.10% which is higher than the category average of 50.00%. The fund’s exposure to cyclical stocks currently is 56.28% followed by Defensives with 16.86% & Services with 10.07%. The Top five holding are HDFC Bank Ltd., Maruti Suzuki India Ltd., Infosys Ltd., Reliance Industries Ltd. and Sun Pharmaceutical Industries Ltd.

 

The fund’s expense ratio of 1.95% is significantly lower than the category average of 2.36%. Like most equity funds the fund has an exit load of 1 per cent on or before one year from the date of investment. Minimum investment in the fund is Rs 5,000.

 

Fund Manager:

Sohini Andani has been managing SBI Bluechip Fund since September 2010. She has qualifications of B.Com and CA. Ms. Sohini has more than 18 Years of experince in Financial Services. She has been working with SBI funds Management Pvt. Ltd as Head of Research for 2 years. Prior to joining SBI Funds Management Pvt. Ltd. Ms. Sohini was with ING Investment Management Pvt. Ltd., where she worked as Senior Analyst and was responsible for contributing to Fund Managers and the CIO on their equity investments. Before that she worked with many organizations viz: 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. Presently she is also fund manager of SBI Magnum Midcap Fund & SBI Banking and Financial Services Fund.

 

View:

SBI BlueChip Fund constructs its portfolio with bluechip stocks and benefits investors who want relative stability and lower volatility in their equity portfolio. It has shown consistency in beating its benchmark and its peer set.

 
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