 "Fund pick: SBI Blue Chip Fund")
Launched in February 2006, SBI Blue Chip Fund is classified under the large-cap category of the CRISIL Mutual Fund Ranking. It has been ranked in the top 30 percentile since December 2012.
The fund aims to provide opportunities for long-term growth in capital through active management of investments in a diversified basket of equity stocks of companies whose market capitalisation is at least equal to or more than the least market capitalised stock of the S&P BSE 100 index. The fund is being managed by Sohini Andani since September 2010. It had quarterly average assets under management of Rs 4,100 for the quarter ended March 2016.
Superior performance
SBI Blue Chip Fund has outperformed the category (funds ranked under the large-cap category in December 2015 CRISIL Mutual Fund Rankings) and the benchmark - S&P BSE 100 - across time frames, except over 10 years when it marginally underperformed its peers. In the 10 years period, it delivered a compounded annual growth rate of 9.9 per cent versus 10 per cent for the benchmark and 8.30 per cent for the category.
In the past year, the fund managed to generate positive returns in a challenging economic scenario against the category's and the benchmark's negative returns.
Since the European crisis (2010-13), the fund has outplayed the category and the benchmark. During the European crisis and Chinese slowdown (Match 2015-now), the fund managed to generate positive alpha against the category's and the benchmark's negative returns. However, during and after the subprime crisis, the fund marginally underperformed the benchmark.
An investment of Rs 1,000 in the fund since inception would have grown to Rs 2,865 (compounded annualised returns of 10.9 per cent) on April 22. A similar investment in the category and the benchmark would have grown to around Rs 3,099 (11.7 per cent) and Rs 2,597 (9.8 per cent), respectively.
In terms of investment through the systematic investment plan (SIP) route, the fund has scored well over the benchmark. An investment of Rs 1,000 per month in the fund since inception via an SIP would have grown to Rs 2.50 lakh by April 22 at 13.3 per cent annualised returns. A similar amount invested in the benchmark would have returned Rs 1.93 lakh at 9.03 per cent (annualised).
Portfolio analysis
In the past three years, the fund held 91.8 per cent of its portfolio in equities and remaining in fixed income instruments and cash and cash equivalents.
In the past three years, the fund had exposure to 109 stocks. It held 50 stocks, on average, in any given month, of which 17 were held consistently. Among the consistently held stocks, HDFC Bank had the highest allocation (7.04 per cent) followed by Tata Consultancy Services (4.05 per cent) and Motherson Sumi Systems (3.5 per cent). As of March, the fund had 51 stocks in its portfolio. HDFC Bank (6.2 per cent), Reliance Industries (5.6 per cent) and Infosys (5.06 per cent) were the top three.
In the past three years, the fund had exposure to 27 sectors, with the top five sectors constituting 54.7 per cent of the portfolio. Banking had the highest exposure of 17.2 per cent, followed by software (IT) (11.7 per cent), pharmaceuticals (10.01 per cent), consumer non-durables (7.6 per cent) and auto (6.4 per cent).
