SBI Bluechip Fund Direct-Growth

The targeted stocks belong to companies with a proven track record of revenue growth and market leaders in their respective industries. The scheme’s Fund Managers pursue an active investment philosophy which is a blend of growth and style to achieve the desired objective.

The SBI Bluechip Fund-Growth is ideally suited for investors who resolutely pursue wealth creation for meeting life goals like children’s education, other milestones, and finally, retirement in contentment. The Growth plan delivers the desired corpus in the long-term horizon decided by the investors to meet their preferences. The investment objective is achieved by allocating up to 80% assets in large-cap equity and equity-related instruments, including derivatives in large capitalized companies with the potential to deliver higher yields. 

The investment pattern in the diversified portfolio reveals the strategy’s efficacy. Thus the top-holding stocks of the following expressed in the percentage of AUM are HDFC Bank (9.21), ICICI Bank (6.91), Infosys (5.29), HCL Technologies (4.64), Larsen & Toubro (6.83), among many others. The portfolio classification by industry allocation in the percentage of AUM is equally revealing in Financial Services (34.84), IT (10.75), Automobile (10.17), Pharma (7.60), Construction (6.72), Oil & gas (6.23), and Consumer Goods (6.05) occupying pride of place. 

The SBI Bluechip Fund-Growth offers the following options to the investor to choose from:

• SBI Bluechip Fund Regular-Growth Option:
• SBI Bluechip Fund Direct-Growth Option:

There is no fundamental difference between the SBI Bluechip Fund Regular Growth and the SBI Bluechip Fund Direct-Growth options other than the subscribing facility. However, it is essential first to understand what the Growth Option implies. In simple terms it signifies reinvestment of profits to help create wealth in the long run through cumulative compounding. Let us now check what regular and direct are:

• Regular: The investor subscribes to the broker or the distributor intermediary. The financial implication of the Regular option is that the Expense Ratio is higher, translating into a lower NAV.

• Direct: The investor chooses to subscribe to the scheme at the Fund House for a higher NAV due to a lower-Expense Ratio. 

Fund Details

Investment Objective

The SBI Bluechip Fund-Growth provides opportunities to the investors to see their investment grow in a long time horizon through a sustained asset allocation predominantly in large-cap equities and equity-related instruments. While these constitute a minimum 80% of the portfolio, the remaining 20% comprises equities other than large-cap, debt, money market instruments, and units issued by REIT and InvITs. The Fund Managers explore other avenues in compliance with SEBI Regulations to create a basket with diverse stocks in a portfolio with the potential to deliver higher yields. The Fund Managers leave no stone unturned to make the fund objective successful. Yet, there is no guarantee the fund will achieve its objective to sustain higher yields in the future. However, the large-cap stocks can withstand market volatility better and beat inflation to create wealth still.  

Fund Summary

1. SBI Bluechip Fund Regular Growth Plan

   • Risk Level: Very High
   • NAV: Rs.53.4603 as of 25 May 2021. 
   • Expense Ratio: 1.79% as of 30 April 2021.
   • Fund Started On: 14 February 2006.

2. SBI Bluechip Fund Direct-Growth Plan

   • Risk Level: Very High
   • NAV: Rs.57.4996 as of 25 May 2021. 
   • Expense Ratio: 0.98% as of 30 April 2021.
   • Fund Started On: 1 January 2013.

Fund Returns Summary Table: Performance as of 31 March 2021

SBI Bluechip Fund Regular Growth Plan

SBI Bluechip Fund Direct-Growth Plan

Cumulative Pros and Cons Table

Benefits of SBI Bluechip Fund Direct-Growth

The SBI Bluechip Fund-Growth is designed for long-term capital appreciation through well-orchestrated active investment management in a blend of growth and style regardless of the chosen plan. It has already been explained that whether it is Regular or Direct, the Growth Option grows wealth through the reinvestment of shareable profits instead of periodic pay-outs as dividends. It enjoys the benefit of compounding to deliver a desired hefty corpus when the units are offered for repurchase based on the applicable NAV. The critical benefits accrued from the SBI Bluechip Fund Direct are:

1. Convenience

   The investor is free to subscribe to the fund paying a lump-sum amount or initiating a convenient SIP to pay in instalments. While the minimum subscription amount in the lump-sum mode is Rs.5000, the SIP starts with a sum as low as Rs.500 per month. However, the SIP mode also comes with different payment frequency variants like weekly, monthly, quarterly, half-yearly, and yearly, all with conditions stipulating the minimum amount and investment period. 

2. Transparency

   SEBI Regulations have stipulated mandatory dissemination of information, especially the daily NAV. The NAV is compulsorily computed at the close of a business day and uploaded in the public domain at the Fund House and AMFI portals. It is crucial as the unit repurchase is based on the current NAV. In this context, it is not out of place to mention that the NAV of the SBI Bluechip Fund Direct is more than that of the SBI Bluechip Fund Regular Growth because of the differential Expense Ratio applied to them. 

3. Tax Implications

    The SBI Bluechip Fund-Growth, like all other Mutual Funds, are governed by extant tax laws. Since the option precludes periodic pay out as dividends, its rules are not applied to this plan option. The tax implications come into play only when the invested units are repurchased by the Fund House on the investors request under the rules governing Capital Gains as under:

   • Units sold within one year from the purchase date: 15%
   • Units sold after one year from the purchase date:
   • Up to Rs.1Lac: Nil.
   • Over Rs.1 Lac: 10%. 

Fund House Details

The SBI Bluechip Fund-Growth is one of the 46 schemes offered by the SBI Funds Management Pvt. Ltd., often referred to as the SBI Fund House or the SBI Mutual Fund. It is sponsored by the largest Indian bank and carries a legacy of more than thirty years. It was the second Indian Mutual Fund established after the Unit Trust of India in 1987. The company is based in Mumbai, and Mutual Fund is one of their primary services to establish it as a viable investment option for the masses. Today, it has a pan India presence through 212 branches catering to a vast clientele comprising 5.8 million retail and institutional investors. The AUM of the Fund House as of 31 March 2021 is Rs.5.05 Lac Cr. 

The sponsor SBI divested 37% of its stake in the SBI Funds Management Pvt. Ltd. by aligning with the Societe Generale of France as their joint venture partner to instill global asset management expertise in the company bid to convert it into an international brand. The Amundi Asset Management of France picked up the foreign partner’s stake in 2011 to adopt international best practices.  

As of today, the two stakeholders in the SBI Mutual fund are:

• State Bank of India holds a 63% stake in the Fund House and backs it with its overwhelming presence in the Indian banking scenario. The public sector bank has over 24000 domestic and 191 international branches and is the only Indian bank in the Fortune Global 500 list of the world’s biggest corporations. 
• The Amundi Asset Management Company holds the remaining 37% stake in the SBI Mutual Fund through its subsidiary Amundi India Holdings. After the merger of the Asset Management arms of Societe Generale and Credit Agricole France, Amundi has emerged as the second-largest company in Europe engaged in the business.   

Who Should Invest in SBI Bluechip Fund Direct-Growth?

The SBI Bluechip Fund-Growth provides the investors the scope to create wealth through a sustained superior yield from a diversified portfolio dominated by large-cap stocks. The scheme is ideally suited for investors willing to pursue higher yields on their investments regardless of the high-risk profile subject to market volatility. The list described below consists of retail and institutional investors with a matching investment philosophy. However, the list is only indicative.

• Resident adult individuals singly and jointly with a maximum of three others. 
• NRI and Individuals with similar status on repatriation and non-repatriation basis. 
• Minors with the assistance of a natural or legal guardian. 
• Karta on behalf of the Hindu Undivided Family.
• Partnership and proprietorship firms.
• Banks and Financial Institutions.
• Mutual Funds of other houses and SBI schemes.  
• Companies, Corporate Houses, PSE, and PSB. 
• Registered Associations, Societies, and Trusts. 

Conclusion:

The SBI Bluechip Fund-Growth is a popular scheme from the SBI Fund House, which is amply borne by the AUM size of Rs.26000 Cr. With its primary focus on a diversified portfolio of predominantly large-cap stocks, it has the potential to deliver higher yields to create wealth in time horizons exceeding five years. Investment in a blend of growth and style is the recipe for success used by Fund Managers. Despite the scheme’s high-risk profile, individual investors find it lucrative to achieve their life goals and milestones to support children’s education and a contented retired life.

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